When Rivers Casino in Des Plaines opened its gleaming new sports bar earlier this month, it had everything a gambler could want, including 32 leather lounge chairs, a 47-foot-wide video wall topped by a sports ticker and five betting windows.
The only thing missing? The BetRivers SportsBar can’t take bets on sporting events — at least not yet.
The Illinois Gaming Board formally opened the application process for a sports wagering license on Thursday, with plans to launch sports books at casinos, racetracks and sports venues such as Allstate Arena and United Center next year. While Rivers and other applicants can be granted temporary permits at any time, they will have to wait until the board issues operating rules, likely in early 2020, before betting can begin.
“We want to be primed to take advantage of that as soon as we can,” Corey Wise, general manager of Rivers, said during a recent tour of the new sports bar.
Sports wagering is one facet of the state’s sweeping gambling expansion bill, which ushers in the biggest change in the gambling landscape since Illinois approved riverboat casinos in 1990. Signed into law in June, the legislation provides for six new casinos, 20 sports books and thousands of new gaming positions like slot machines or seats at a blackjack table.
The new gaming opportunities are projected to increase the state’s annual gambling tax revenue by $350 million — and make Illinois something of a Midwest gambling mecca.
“You’ve got about 45,000 gaming positions,” gambling industry consultant Frank Fantini said. “I don’t know that any other place has that many.”
Illinois already has a lot of places to place bets. Since video gaming terminals were launched in 2012, the standalone slot and poker machines in bars, restaurants and truck stops have flourished, more than tripling the number of gaming positions across the state. Illinois generated more than $1.4 billion in gambling tax revenue for the 12 months that ended June 30, up 3.5% from the previous year.
Fantini said there’s still room for casinos in the Chicago area to grow by adding more gaming positions, and said sports betting in particular will lure new customers to casinos.
Sports betting
The Illinois Sports Wagering Act allows the state’s 10 casinos, three horse tracks and seven of the largest sports venues to acquire a sports gaming license, with three additional online-only licenses to be issued 18 months after the first on-site license is issued. Eilers & Krejcik Gaming, a California-based research and consulting firm, projected annual revenues of $756 million in Illinois within five years.
Sports betting locations will be able to offer online betting as well, which generates the lion’s share of action in other states. Gaming Board officials declined to say Thursday if that feature will go live when on-site betting begins.
Enabled by a 2018 U.S. Supreme Court ruling, 20 states have legalized sports gambling.
Illinois has been slow off the starting blocks, however, since sports wagering became law in June. Indiana approved legislation in May and launched sports books at casinos statewide in September. Mobile sports wagering went live at Ameristar East Chicago in October, with two more Indiana casinos coming online last month.
“While we respect our Hoosier neighbors, at the same time Illinois is a different state, and we have to do what’s in the best interest of Illinois,” Illinois Gaming Board administrator Marcus Fruchter said Thursday. “We’re doing what we need to make sure that we roll it out in a proper manner.”
Indiana casinos generated nearly $30 million in adjusted gross receipts — revenue after winnings are paid — from sports wagering during the first three months of operation, according to the Indiana Gaming Commission.
“There is a lot of action on the Bears,” said Dan Nita, regional president of Caesars Entertainment, the parent of Horseshoe Hammond, located just across the state line from Chicago in northwest Indiana. “More than half of all the action is on football.”
Perhaps more important is the instant boost online sports gambling brought to Indiana. In November, more than 60% of sports betting revenue was generated online, according to a monthly report by the Indiana Gaming Commission.
Under Illinois law, consumers will have to create a sports wagering account in person before they can gamble online or through a mobile app. Operators are required to use geofencing technology in their mobile apps that tracks where the bets are placed, cutting off access outside the state.
Whether Bears fans will be able to stay home and bet on the team by next season remains to be seen. In its December sports betting report, Eilers & Krejcik Gaming said Indiana may enjoy a year or two of “meaningful out-of-state inflation” from Illinois gamblers.
Casino expansion
When Illinois legalized riverboat gambling 30 years ago, it meant driving to places like Joliet, paying an admission fee and taking a two-hour ride down the Des Plaines River in the bowels of a floating casino.
By the time Rivers Casino opened in 2011 as what was to be the state’s 10th and final casino, it was a boat in name only. A 144,000-gallon man-made pool beneath the foundation technically qualifies the casino as a riverboat. While patrons never see the water, there is a maintenance closet where the pool, only 6 inches deep, is visible through a small plexiglass window in the floor.
Now, as part of the gambling expansion law, the state’s busiest casino can drain the pool. Rivers paid $250,000 for the state’s first land-based license in November, a designation that enabled it to add 123 gaming positions to parts of the facility not located above water.
The casino is planning a $150 million expansion onto adjacent dry land to add the rest of the 800 new gaming positions allowed under the law, bringing its total to 2,000. It’s also doubling its parking garage to more than 1,500 spaces, work that is expected to be completed by next summer.
Harrah’s Joliet & Metropolis, the Casino Queen in East St. Louis and the Grand Victoria in Elgin also seek to add 800 gaming positions, the Gaming Board’s Fruchter said.
New casinos
In a bid to reverse declining casino revenues, the state is looking to add six new casinos from the Wisconsin border to southern Illinois. Rivers, which is a partnership between Chicago-based Rush Street Gaming and Louisville, Kentucky-based Churchill Downs, is among three casino operators vying to build a new casino in Waukegan.
In the south suburbs, four applicants are competing to build a casino in either Calumet City, Homewood/East Hazel Crest, Lynwood or Matteson. There are also proposals for new casinos in Rockford, Danville and Williamson County in southern Illinois.
In total, the Illinois Gaming Board has received 10 applications for five of the six new casino licenses. Plans for a sixth casino in Chicago have been stalled as lawmakers reconsider a proposed 33.3% city gambling tax that may be prohibitive for developers.
The Gaming Board has 12 months from the Oct. 28 application deadline to process and award the licenses. Operators will be allowed to open in temporary facilities for two years while building permanent locations, but there may not be enough time for the new casinos to get up and running in 2020, even in temporary digs, according to Rivers Casino spokesman Patrick Skarr.
Racinos
The state’s three horse racing tracks had the opportunity to add casino gaming under the new bill, but Churchill Downs, the owner of Arlington International Racecourse in Arlington Heights, decided to pass — at least for 2020.
Hawthorne Race Course in Stickney and Fairmount Park in downstate Collinsville both applied to the Gaming Board by an Aug. 27 deadline to open so-called racinos. The Gaming Board had 120 days to determine whether to grant the racino applications, but Fruchter said the clock hasn’t started, because the applications haven’t been deemed complete.
Under the law, Arlington could add up to 1,200 slot machines and table gaming positions at its racetrack, but surprised racing officials and industry observers when it chose not to apply.
While horse racing interests in Illinois have long lobbied for casino gambling at racetracks as a way to boost purses and better compete against other forms of gambling, the requirement that Arlington pay as much as 20% more in taxes on gaming revenues than existing casinos to fund horse racing purses makes a racino financially untenable, Churchill Downs executives said.
Churchill is, however, planning to apply for a sports betting license at the racetrack.
Video gaming
Illinois is the unofficial video gaming terminal capital of the U.S., with nearly 33,500 slot and poker machines at licensed bars, restaurants, truck stops and fraternal organizations. The gambling expansion law will no doubt enhance its status after lawmakers Tuesday agreed to expedite the rollout of potentially thousands of new terminals in 2020.
Seven years after video gaming launched in Illinois, the stand-alone machines generate more revenue than the state’s 10 casinos. For the 12 months that ended June 30, adjusted gross receipts topped $1.59 billion, while casinos brought in $1.35 billion, according to the state.
Under the expansion law, the state’s 7,241 video gaming locations can operate six terminals, up from five, while larger truck stops can have up to 10 machines. The maximum wager doubled to $4, and the maximum cash award increased to $1,199 from $500.
So far, the Gaming Board has received 1,626 requests for a sixth machine.
