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September 19, 2019

Lawmakers back mobile gambling and eSports

Illinois legislature yet to agree on licensing fees for sports betting bill

Illinois legislature yet to agree on licensing fees for sports betting bill
House Bill 3308 is sponsored by Rep. Michael Zalewski, a Riverside Democrat, who said sports wagering would get people in the door at casinos and becomes a way to sell other things.
United States | 04/30/2019

Legislators say the state could miss out if neighboring states legalize sports betting first. The proposal of having a USD 10 million one-time licensing fee was questioned during a second hearing in the House, as compared to lower figures in Indiana and Iowa. Gov. J.B. Pritzker uses the sale of 20 licenses as a source of more than USD 200 million in new revenue.

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ive different plans are being considered in the legislature to legalize sports gambling in Illinois this spring. The possibility of having a $10 million one-time licensing fee was questioned during a second hearing on sports gambling by the House Revenue and Finance subcommittee last Thursday in Chicago.

Testimony from the hearings will be used to reconcile the plans proposed in House Bill 3308, sponsored by Rep. Michael Zalewski, a Riverside Democrat. The proposed licensing fee would be paid by sports betting operators, such as casinos, race tracks or online platforms.

"If the licensing fee is too high, it's going to prohibit people from entering the market," said Robert Davidman, a marketing professional who has helped launch several online gaming businesses in New Jersey, Daily Herald reports. Davidman said fees that other states are considering —$100,000 in Indiana and $45,000 in Iowa are better. Pennsylvania, where the fee is $10 million, has not sold all of its available licenses, Davidman remarked. In his budget proposal, Gov. Jay Robert Pritzker uses the sale of 20 licenses as a source of more than $200 million in new revenue.

Zalewski also said Illinois could miss out if neighboring states legalize sports betting first. “I consider it a sort of Damocles [sword] hanging us that Iowa and Indiana may get this done before we do and it very much makes me want to get this done as soon as possible,” Zalewski said. He said sports wagering would get people in the door at casinos and becomes a way to sell other things.

A safer possibility among the proposals might be mobile betting. "Mobile sports wagering is not only the future, it's the now," said Jake Williams of iDEA Growth, a non profit sports betting association. He said mobile betting accounts for roughly 80 percent of New Jersey sports wagers.

Zalewski, who is the subcommittee chairman, agreed. "We've become aware that states that don't have a mobile piece don't fare very well," he said. That would go against one of the proposals, which would have sports betting overseen by the Illinois Lottery without any online component.

Larry Lyons, athletic director at Illinois State University, spoke on behalf of most of the state's 13 schools with Division I athletics. "We are in agreement that we oppose legalized gambling on college sports," he said, because it brings bettors too close to young athletes who are still maturing.

But others said there still would be illegal gambling on college sports if they were not included in the bill. And eSports like DOTA II, League of Legends and Fortnite could be included. Bob Greenlee of eSports company Tusk Strategies argued that eSports are more popular and professional than many people think.

Considered as one of the nation's best Fortnite player, Illinois resident "Ninja" Blevins, made as much as $10 million in sponsorships last year. A 2018 League of Legends tournament, meanwhile, attracted 205 million live viewers, compared to just more than 100 million viewers of the Super Bowl that year.

"eSports is a real thing," said Rep. Margo McDermed, a Mokena Republican who added that she learned about it recently while on Netflix. "I hadn't really considered it as something Illinois should include in our future gaming, but perhaps we should," she said. Greenlee said a company analysis puts state tax revenue from eSports betting alone at $18 million a year.

Also at Thursday's hearing, Grace Hou, head of the state's Department of Human Services, said next year the department needs almost double its historical budget of $1 million for gambling addiction services, but not because of sports betting. "People often struggle with turning themselves in, so we need more marketing and outreach," Hou said.

Anita Bedell, executive director of Illinois Church Action on Alcohol and Addiction problems, said legalizing sports betting will only increase addiction. "Rather than address the problem, you want to make it worse by putting it on phones," Bedell told lawmakers.

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