Report: Illinois Sports Betting Could Generate Millions Of Dollars
A recently published report written by the Illinois Economic Policy Institute and the Project for Middle Class Renewal in Illinois states that sports betting can benefit Illinois in a number of different ways.
Incentives to Legalize Sports Betting
Lawmakers in Illinois have a strong incentive to legalizing sports betting sooner rather than later. If Illinois is the first Midwestern state to regulate sports wagering the state could create up to 2500 jobs and potentially add $100 million for state revenue. This funding can go into infrastructure and education reform. The money can even go to treatment that would help with problem gambling.
The potential proceeds that sports betting can bring for the state is something that Governor J.B. Pritzker is interested in. Illinois has a large budget gap that needs to be filled and Pritzker is open to using sports wagering to fill in that gap. But he needs to know the details on how sports betting will be taxed before he is completely on board with this.
Sports Betting Models To Study
Legal land-based sports betting is new in the United States. It is now up to the individual states to decide how they want to regulate sports wagering. Because of that, there is no single model to study to see how Illinois would want to move forward with sports gambling.
One of the models that Illinois is currently looking at is New Jersey, who taxes eight percent for in-person bets and 12 percent for online bets. However, the state only saw $8 million in tax revenue for sports betting. That isn’t even close to the $100 million that Illinois is looking for. But Illinois is a much bigger state and has the major city Chicago, so it is reasonable to say that the results won’t be the same as Jersey’s was.
They are also looking at Pennsylvania taxes on sports betting as well. The tax rate that Pennsylvania has set for sports wagering is 34 percent. Representative Mike Zalewski (D, Riverside) offers a reason why Pennsylvania has such a high tax rate on sports betting:
“The only reason they made it 34 percent is because they needed the money like Illinois did.”
Pritzker added on that the "overall goal here is to make sure we’re meeting the needs of the people of the state and having a balanced lllinois sports betting could generate millions of dollarsbudget.”
For this reason, lawmakers in Illinois are continuing to research what is best for the state.
The Report’s Suggested Framework
The new analysis hopes to steer congressmen and women in the right direction. The report is suggesting that lawmaker looks at what New Jersey and the United Kingdom are doing and model their framework to be a balance between the two.
A 15 percent tax rate on sports betting is proposed, and the report is also suggesting a 0.05 “integrity fee” that would go to the state rather than the sports leagues. This would allow the state to hire investigators that would prevent fraud from happening.
The hope is that the balanced framework would higher economic activity and shrink down the black market further than what is currently proposed in the Illinois General Assembly. This framework would also create more jobs for people than the other models would. SportsBettingIllinois.com points out to the fact programs for compulsive gambling and addiction would get $9 million more per year and $42 million would go to education to help students in Illinois to pay for college.
The overall analysis argues that Illinois sports betting could help close budget gaps that plague the state, ultimately in a more efficient way than currently legal industries such as horse racing.
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