This is the Biggest Obstacle to Illinois Online Poker in 2024 This is the Biggest Obstacle to Illinois Online Poker in 2024
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Proponents of legal, regulated real money online poker in Illinois are certain to face skeptics in the General Assembly when they try to get a bill legalizing poker and online casinos across the finish line this year.

Whether or not detractors of expanded igaming prevail (again) remains to be seen. For starters, consider that the state generated a record $2 billion from all gaming sources during the 2023 fiscal year — and has only shown interest in making more.

Two nearly identical igaming expansion bills are making their way through various committees, one in the House and one in the Senate. Both bills would let qualified licensees (land-based casinos and horse racetracks) have three skins for poker and casino, taxed at 15%.

The bills have bipartisan support — but there’s opposition, too. And it’s a safe bet that most of the phone calls and emails lawmakers are receiving are from thousands of businesses that invested in video gaming terminals (VGTs).

VGT Marketplace is Large, But Under Pressure

Illinois has nearly 46,000 VGTs in non-casino locations, the most for any state by that metric, by far. Machines can be found in bars, convenience stores, gas stations, restaurants, truck stops, and other small businesses all over the state — 8,854, by the government’s last count.

Some truck stops were recently allowed to add more VGTs. And VGTs account for an ever-increasing share of overall gaming revenue $814 million of the aforementioned $2 billion in tax revenue the state got last year — over 40% — came from VGTs. Only the state lottery made more with $872 million (a further 44%).

By comparison, analysts with Morgan Stanley projected in June 2022 that Illinois would generate $868 million from online poker and casino in 2024, but that projection was based on igaming expansion being enacted in 2023.

While VGTs are growing, the marketplace for them is also under pressure, and expectations are that online poker and casino gaming will squeeze them even more. How much the two verticals would impact VGTs wasn’t included in a recent analysis by a state bipartisan advisory panel.

But the panel, the Commission on Government Forecasting and Accountability, did say “the construction of new casinos may reduce video gaming revenues by providing alternative venues for wagering.

“While the impact that these new casinos will have on video gaming locations is not expected to mimic the impact that new video gaming machines had on existing casinos (due to the convenience of local establishments), some cannibalization in video gaming figures is possible.”

Could VGTs be the Loser if Regulated Gambling Expands?

The panel also found signs that the VGT market was getting oversaturated, especially in the Chicago area. “As more gambling opportunities arrive in the form of new casinos, the competition for the gaming dollar in this area will be larger than ever and 'winners’ and 'losers’ should be anticipated,” the state panel said in its September 2023 analysis.

“How much gaming can this area handle? That remains to be seen,” it added.

That same month, a separate analysis conducted by the Daily Herald also found signs of VGT oversaturation. The newspaper reported that some businesses that had invested in VGTs were rethinking their plans.

Although serious opposition to the bills has yet to materialize, when it does, the primary fuel for the naysayers will likely be the small businesses that have invested in VGTs — and are nervously watching as land-based casinos inch closer to expansion in their own right.

Lawmakers will ultimately have to decide whether the benefits from adding online poker and casino gaming outweigh additional pressure placed on the VGT marketplace.