Changes on Illinois’ broad — and getting broader — gambling front produced $5.4 billion in gross revenues and $1.5 billion in tax revenues in 2023, according to a recent report.
Both numbers represent a substantial increase in the previous year’s figures of $4.8 billion in gross income and $1.4 billion in tax revenue.
The higher numbers are the result of “many distinct changes” in Illinois gambling options that are “starting to take effect,” according to the state’s Commission on Government Forecasting & Accountability.
They also help explain why Gov. J.B. Pritzker is asking legislators to more than double the tax on sports gambling, a move that would produce another $200 million.
Commission analyst Robin Thompson predicted future revenue increases because of “the continuing implementation of sports wagering in Illinois, an expansion of Illinois’ video-gaming industry, and the development of new casinos across the state.”
“While some of the major components of this expansion are still yet to materialize, such as the opening of the 4,000-position permanent Chicago Casino, the activity that has taken place was the impetus behind the 11.4 percent increase in taxable revenues from gaming-related sources in CY (calendar year) 2023,” Thompson wrote in her “overview” of the status of legal gambling.
Gambling in Illinois consists of casinos, video machines and sports wagering. The Illinois State Lottery, which also produces substantial revenue, is not included in that category.
The current wagering tsunami is the result of Pritzker’s first-term proposals to boost tax revenue by dramatically expanding gamblers’ options.
The COFGA report states Illinois casinos are suffering from the brutal competition provided by video gambling. Despite that, their adjusted gross revenues grew 12 percent in 2023.
Thompson attributed the increase to new casinos in Chicago, Danville, Carterville and Waukegan and the increase in the number of video terminals legislators approved.
Illinois now plays host to 15 casinos that generate $1.5 billion in revenue.
The Golden Nugget Danville reported $22 million in gross revenue. The Rivers Casino in Des Plaines did the most business, bringing in $538 million in revenue.
Video gambling grew “moderately” in 2023, increasing its total revenue by 6.4 percent to $2.8 billion. Of the $981 million in tax revenue it produced, $837 million went to the state’s Capital Projects Fund and $144 million to local governments.
Sports wagering has undergone a boom here during its four years in operation. Total revenue increased from $794 million in 2022 to $1 billion in 2023. The state collected $150 million in 2023 revenues.
But the governor wants more. He has proposed raising the tax on sports books from 15 percent to 35 percent, and it’s hard to imagine legislators rejecting increased revenues that come directly from operators’ bottom line.
His proposed increase on that tax is one part of the governor’s roughly $1 billion tax-hike plan.
The most visible part of Illinois’ financial bet on gambling are video machines. In 2014, their first year in place, there were 19,182 terminals that brought in $659 million. In 2023, there were 47,047 video-gambling machines spread across the state that generated $2.8 billion.
Their presence has devastated patronage at the state’s casinos, causing a 29 percent decline in casino revenue since video gambling became legal.
But the state’s expansion of gambling options has “more than offset” the established casino declines, the report stated.
Although impressive, gambling-revenue numbers represent a small percentage of state spending. The governor recently proposed a $52.7 billion budget for the 2024-25 fiscal year that begins July 1.
