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Legal sports betting has been a resounding hit in the United States. So much so that 39 out of 50 states allow sports betting in some shape or form.
However, online casinos haven’t had anywhere near the same traction nationally. As it stands, only seven states allow online betting on casinos — Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia.
Why? Well, we’re not entirely sure. It seems the genie is out of the bottle with the industry now so arguing about problem gambling makes less sense when sports wagering is so easily available on top betting apps.
There’s news coming out of Illinois that could create an iGaming industry stateside. But the potential reason why they’re doing it is the bigger story since it could create a domino effect elsewhere. Keep on reading and we’ll tell you all about it.
Senate Introduces iGaming Bill In Illinois
In May, Illinois Sen. Cristina Castro and Rep. Edgar Gonzalez officially filed Senate Bill 1963 and House Bill 3080, aiming to legalize online casinos under the newly proposed Internet Gaming Act. The filings come just weeks after Governor JB Pritzker hinted at his support for iGaming.
Under the proposal, each casino or horse racing track in the state could operate up to three online casino skins. Licenses would cost $250,000 a pop. The state, of course, would get a cut of the revenues. The bill calls for a 25 percent tax rate on revenue — a figure that could reportedly generate as much as $800 million in annual tax income for Illinois.
But there’s a twist aimed at easing industry fears about job losses at physical casinos: to renew a license, operators can’t reduce their workforce by 25 percent or more from the date they were first approved. That clause is a direct nod to brick-and-mortar operators who’ve long argued that online casinos would cannibalize their bottom line.
Both Castro and Gonzalez have kicked this idea around before. In 2021 and 2023, Castro submitted legislation. Gonzalez did the same in 2023. However, this time is different because Governor Pritzker seems to be on board for the first time.
Why The Governor Has Warmed Up To iGaming
When Illinois’ legislative session began earlier this year, Pritzker quipped that online casino gambling was a “worthy consideration.” He’s never been of the anti-betting mind — sports betting in Illinois was legalized during his tenure — but he’s never been this forthright about iGaming either. Why the switch-up?
Here’s the simple answer: money. More than anything else, the state of Illinois is clamoring for more of it. Pritzker recently submitted his budget for the 2026 fiscal year, and well, it includes a $500 million hole. To close that gap, the Governor has floated the idea of higher tax rates on table games at casinos (excluding those in Chicago).
Moreover, a year ago, he changed the tax figure on sports betting too. It was formerly a flat rate of 15 percent. Starting with the 2025 fiscal year, the tax became a sliding scale of 20 to 40 percent (more for the top-earning sportsbooks).
So it’s obvious that whenever Pritzker needs to raise extra funds, he goes to the betting industry. Doesn’t legalizing iGaming feel like a next logical step? It sure does to us.
Gauging The Success Of A Potential iGaming Market
Just how big could a legalized iGaming market be in Illinois? Well, we don’t know exactly. But we can guesstimate, mainly using states where it is legal. Perhaps the best comparison is Michigan — a fellow Midwest state with a similar population (Illinois has 12 million to Michigan’s 10 million).
In Michigan, the industry is absolutely booming. Take the month of April, for example. Total revenue from online gambling hit $290.7 million, according to the Michigan Gaming Control Board. This is 23.8 percent better year-over-year and only 1 percent shy of the all-time record set in March 2025.
Michigan has quite a competitive marketplace — by our count, there are 16 licensed operators for online gambling. Of those, FanDuel and MotorCity Casino (the two are partners) ranked above the rest with $67.6 million in gross receipts and $63.5 million adjusted. BetMGM and MGM Grand Detroit, the leaders the month before, followed close behind at $64.9 million and $61 million. DraftKings and the Bay Mills Indian Community rounded out the top three with $42.5 million and $40 million.
But what really matters here is how much the state collected in taxes. For the month of April, iGaming taxes sent $48.2 million to the state of Michigan, $13.1 million to Detroit, and $5.6 million from tribal operators to their respective governing bodies. That’s a good chunk of change.
Michigan taxes iGaming on a sliding scale similar to Illinois and sports betting. The scale starts at 20 percent for the lowest-earning operators and up to 28 percent for the top ones. This is significantly more than the 15 percent rate proposed in Illinois’ latest bill. Some of the revenue loss would be made up by Illinois’ bigger population, but one could guess the state could earn $40 or so million per month (around $500 yearly) from iGaming taxes.
Don’t look now but that’s exactly the deficit that Pritzker’s 2026 budget finds itself in. All this leads us to believe iGaming has serious legs in Illinois — if not this year, then the next legislative session for sure. And with other states facing their own annual budget shortfall, iGaming could be a lifeline for them to raise money.
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