Why Illinois’ Online Sports Betting Mobile Registration Will Likely Continue

Illinois bettors’ remote registration access will be extended for at least another few weeks. And probably a few weeks after that. And a few more weeks after that.

Gov. J.B. Pritzker issued another executive order last week that permits eligible bettors within Illinois state lines to register, deposit and wager with any legal sportsbook without having to sign up in-person at a state casino.

Without the latest month-long extension — the sixth of this year — Illinois bettors would be effectively shut out from all legal online sportsbooks as casinos are now under a new wave of closures due to the COVID-19 pandemic.

While the in-person registration requirement will technically be in place through 2021, it seems more likely than ever it will never come back into effect.

Pritzker announced Tuesday plans to slash more than $700 million from the state budget as the Illinois government, already facing one of the most precarious financial predicaments of any state before the pandemic, is staring down decreasing tax revenues and increasing health costs.

Sports betting tax revenues are a few million dollars in a budget that was recently north of $40 billion, but already facing the politically unpopular task of budget cuts, it seems improbable Pritzker would stop the catalyst for the state’s sports wagering success when all it takes to keep it going is a stroke of his pen.

Background for In-Person Registration

Illinois’ in-person registration requirement was a compromise in the sweeping 2019 gaming expansion bill that legalized sports betting at state gaming facilities and allowed each to open an online sportsbook.

Ostensibly a nod to Illinois-based Rush Street Interactive, which owns the nearest casino to downtown Chicago, the registration mandate was largely opposed by industry advocates — and most other state gaming interests.

Furthermore, the bill allowed up to three online sportsbooks “untethered” to any of the state casinos but forbade “bad actors” from entering the market for at least 18 months after the first sportsbooks opened. That was implicitly designed to keep out FanDuel and DraftKings, the two largest sports betting companies by market share that had battled the state in court over daily fantasy products.

In March 2020, Rush Street’s Rivers Casino in Des Plaines opened the state's first retail sportsbook and took the first legal online bet with its BetRivers app a few months later.

But Rivers Casino, like all other commercial gaming facilities, was forced to close due to the pandemic, leaving the state without a legal betting option for several months.

In the meantime, FanDuel and DraftKings prepared to launch their respective sports betting options at Par-A-Dice Casino in Peoria and the Casino Queen in East St. Louis, which the companies acquired in order to work around the “bad actor” requirement.

With all brick-and-mortar casinos closed, Pritzker issued the first executive order permitting mobile registration in June. However, he let it lapse the following month, giving BetRivers an advantage in the heavily populated Chicago area.

A resident of Cook County or one of the surrounding collar counties would have a (relatively) easy drive to Des Plaines to register for BetRivers, for example, but would take several hours to get to East St. Louis to register for DraftKings.

Fortunately, the executive order was renewed again in August. And again in September. And again every month since. That allowed any eligible bettor in Illinois to register for not just the three aforementioned online sportsbooks, but also PointsBet and William Hill, which launched in September.

Online Registration Builds Illinois Revenue Success

With retail casinos closed once again due to the pandemic, the remote registration has allowed the Illinois sports betting market to grow rapidly.

The state took in more than $300 million in wagers in September, more than double its August handle. Assuming Illinois mirrors most other states, its October report should easily top monthly records for betting handle, operator revenue and government taxes.

That last category is perhaps the biggest reason it appears mobile registration is here to stay.

Though it's amounted to just a few million dollars this year, it seems inconceivable Pritzker would effectively cut off that tax revenue in the days (or weeks) after he announced massive spending cuts — and while the state faces a nearly $4 billion budget shortfall.

Crazier things have happened in state politics — especially in Illinois — but this seems like an easy, if small, way to help alleviate a daunting financial situation.

Meanwhile, the competition for Illinoisans’ sports betting dollars is not getting any easier. Indiana has topped its handle, revenue and tax records in each of the past five months. Iowa is expected to grow rapidly after it sunsets its in-person registration clause Jan. 1.

Meanwhile, Missouri and Kentucky are both set to consider sports betting bills next year, meaning Illinois could have legal betting markets in every bordering state as early as 2021.

All of this still pales in comparison to the illegal market, which is still generating hundreds of millions of dollars in illegal bets from Americans each month and remains the biggest challenge for the legal Illinois offerings.

Curtailing the state’s best chance for legal betting — and precious state sports gambling tax revenues — seems ludicrous at this point.

The in-person sign-up requirement could technically resurface as early as next month. However, it appears increasingly likely that Pritzker will continue his mobile registration executive order, even if Illinois bettors have to wait for it to come one month at a time.