The Commission on Governmental Forecasting and Accountability (COGFA) announced the release of a new report examining gaming in Illinois. This report offers an exhaustive examination of every legally approved betting outlet in the state, featuring information on casino gaming, horse racing, video gaming, lottery tickets and sports wagering.
During the fiscal year of 2022, a whopping $1.9 billion was generated from gaming throughout Illinois. Of all the gaming revenues, Lottery was the most significant contributor, accounting for a remarkable 44.2% of total earnings with $833 million. In FY2022, the gaming industry was not too far behind, as it still made an incredible $762 million revenue. Sports wagering, riverboat casinos, and horse racing contributed much smaller amounts at $142 million, $140 million, and $ 7 million, respectively. Since sports betting is legal in Illinois, check the best Illinois sportsbooks specialists at online-gambling.com to support your favorite sports team!
The main factors of the increased revenue
According to the report, 2022 revenue from taxes and licensing fees experienced an impressive 38.8% surge in comparison to 2021, a result of two main factors:
- As we overcome the most difficult times of this pandemic, gaming revenues are regaining strength.
- In June 2019, Illinois approved a comprehensive gambling expansion bill. This included allowing sports betting, building six new land-based casinos (including one in Chicago), and increasing the number of video gaming machines. With these changes, it’s apparent that this legislation will make a difference for citizens throughout the state.
The report conveyed that state-designated tax revenues from all gaming activities in Illinois diminished by 11.7% to $1.240 billion during the 2020 Fiscal Year (FY). Though there was an upturn of 9.5%, with total earnings of $1.358 billion for FY 2021, this number was still lower than the income generated before Covid-19 hit: at a pre-pandemic peak of $1.404 billion in 2019’s fiscal year.
Illinois’ sports betting has been a lucrative source of revenue for the state
In only its second year since being legalized, Illinois sportsbooks had garnered a whopping $611 million in adjusted gross receipts. According to the report, licensing fees became a welcome source of supplementary revenue.
Illinois has authorized sports wagering, which has created another source of income for the state. In 2021, the state generated $57 million in taxes from sports betting. In 2022, this number rose to $92 million due to the 15% tax on gambling revenue over $610 million. Most of this money is earmarked for the Capital Projects Fund and the Rebuild Illinois Projects Fund.
What is causing the growth of IL sports betting?
The immense expansion of Illinois sports betting can be attributed to the removal of on-site registration for sportsbooks.
This has opened the door for fresh sports bettors, predominantly as mobile app users through sportsbook programs.
In addition to the 15% tax rate, states earned revenue from licensing fees for sports betting.
- 2020: $7.1 million.
- 2021: $61.8 million in convergence with the development of sports wagering across the State.
- 2022: $14.3 million.
After the rapid rise in-licenses acquired in 2021, a decrease from that point forward was anticipated. But with extra license issuance and requisite renewals every four years, it is expected that revenues generated by fees will remain steady over time.
The state’s gambling industry has generated an exceptional $83 million in licensing fees due to sports betting.
How did the lower average tax rates affect it?
Revenue records were still achieved despite a decrease in taxes and casino earnings. According to the report, remarkable expansion in the lottery, video gaming and sports betting were major contributing factors to the revenue surge.
During the 2022 fiscal year, lottery transfers accounted for 44.2% of all gaming tax revenue collected – making it the largest source of income throughout this period. Nevertheless, this percentage has drastically decreased since it reached its peak of 67.8% in the Fiscal Year 2013. The last ten years have seen a dramatic surge in video gaming revenue, now comprising 40.4% of the industry’s overall takings.
Over the last decade, casino transfers have greatly diminished from making up over 50% of gaming-related revenues to an astonishingly low 7.4% in FY 2022. Sports betting has grown astonishingly to 7.5% in its second complete year. Comparatively, horse racing only produced 0.4% of the total revenue.
Video gaming revenue has seen consistent growth thanks to the expanding number of machines. Last year, the state allowed a terminal limit augmentation from 5 to 6 at regular locations and an increase from 5 up to 10 terminals in qualifying truck stops. With over 43,000 machines in Illinois alone, net terminal income has seen a dramatic 36.1% growth from 2021 to 2022.
Nevertheless, this has caused casino revenue to drop by a staggering 20.3 % from last year’s figures.
Video gaming has seen a remarkable 140.2% jump in revenue, from $1.6 billion to an astonishing $3.9 billion when the totals are combined.
Despite some fluctuations, Illinois sports betting has been a significant source of revenue for the state. While rising taxes and changes to licensing fees may have impacted revenues in the short term, both lottery and video gaming revenues continue to grow steadily over time. As more people turn towards sports betting apps, we expect this trend to continue well into the future.