The latest revision of Illinois’ proposed online gambling legislation now has provisions to allow existing casinos and horse racing interests to operate affiliate “skins” on a network controlled by the state lottery.
Under the newly proposed legislation, licensed affiliates may offer internet games to authorized players. The Illinois lottery itself will only operate the network and not compete against the affiliates. The Lottery may also expand the network by entering into multi-state or other such agreements as allowed by state and federal law.
As the proposed legislation stands now, only current riverboat casino licensees and racetrack/off-track betting operators are eligible to become licensed affiliates. With the license application fee set at $5m, the state stands to generate as much as $80m if all 16 potential licensees apply and over $100m should the state approve legislation to expand the number of B&M licenses. Specific rules governing the procedure for issuing licenses will need to be established within 30 days of the law taking effect.
As the network operator, the Illinois lottery’s Division of Internet Gaming will have the authority to control what games are spread—including game types, stakes and the tables available—as well as rule on the forms of acceptable payment and set responsible gaming measures. And, perhaps most importantly, it will set the rake structure.
A vendor will be sought to provide the platform software. In addition, the Division will be responsible to seek vendors to provide software for the verification of participant’s identity, age and location.
The proposed legislation was originally introduced by Senate President John Cullerton nearly two weeks ago as an amendment to an existing bill to allow it to be passed before the General Assembly adjourns for the spring session on May 31.
Several states are looking to regulate internet gambling since the US Department of Justice responded to Illinois’ request for clarification of the Wire Act by stating that only wagering on sporting events and contests violate Federal law. Nevada has already enacted legislation to allow online poker and both New Jersey and California are expected to follow suit.
With this legislation, Cullerton is aiming to make Illinois “a hub for internet gambling around the world” and stresses the urgency for the state to “act quickly” before other states take the lead in the billion dollar industry.
