The Rapid Rise of Video Gambling in Illinois: An Economic Powerhouse

When video gambling was first legalized in Illinois in September 2012, it started with a modest presence—just 61 machines scattered across the state. Fast forward a little over a decade, and the landscape has transformed dramatically. Recent reports from state officials reveal a staggering jump, with 48,176 video gambling terminals now in operation across Illinois as of June 30, marking the end of the 2023-2024 fiscal year. This growth has significantly exceeded the early projections made by experts who predicted a plateau of around 20,000 machines statewide.

Unleashing New Revenue Streams

The explosive growth of video gambling machines is increasingly seen as an essential source of revenue for local and state governments. Champaign County, for instance, boasts 790 video gambling machines across 144 establishments. In the fiscal year ending June 30, these machines generated an impressive $18 million in revenue, with $15.4 million directed to the state and $2.7 million to local government coffers. However, this figure pales in comparison to the revenues generated in Cook County.

Cook County’s landscape illustrates the potential for revenue generation in areas beyond the heavily populated city of Chicago. Although Chicago currently maintains a ban on video gambling, there are 8,884 machines operating in the broader Cook County area, accounting for 1,542 businesses. These machines generated a striking $223.1 million in tax revenue, with $190.3 million going to the state and $32.8 million to local government.

The Financial Impact of Video Gambling

The financial impact of video gambling doesn’t stop at dollars and cents; it extends to various counties that have embraced it as a lucrative venture. For instance, Sangamon County, which is home to the state capital, has seen 1,779 video gambling terminals generate $35.7 million in tax revenue—$30.4 million directed to the state and $5.2 million to local government.

The contributions from video gambling have turned it into a formidable player within Illinois’s broader gambling landscape. While it has not yet dethroned the lottery as the dominant source of legal gambling revenue, its rapid ascent is evident. The Illinois Lottery, established in 1974, generated $886 million in tax revenue for the 2023-24 fiscal year, yet video gambling closely follows with $848 million. Other forms of legalized gambling, such as sports wagering, casinos, and horse racing, generate considerably less revenue.

The Changing Dynamics of Legal Gambling

The burgeoning popularity of video gambling can be attributed to legislation driven by Governor J.B. Pritzker, who championed an expansive gambling initiative in his first year in office. The overall idea was to tap into new revenue streams to support the state’s financial needs. Interestingly, those resistant to traditional tax hikes have found a willing audience in video gamblers, who often prefer these games of chance over more explicit forms of taxation.

While video gambling thrives, its success has not come without complications. The increased popularity and convenience of video gaming have siphoned funds from Illinois casinos. According to reports from the Illinois Commission on Government Forecasting & Accountability, the adjusted gross revenues of casinos have dwindled as a direct consequence of the rise of video gambling. Many gamblers now opt for the quieter, more intimate atmosphere of video gambling establishments over larger, bustling casinos. This shift in preference has altered the dynamics of how gambling operates in Illinois and has led to a perception of video gambling as a ‘safer’ alternative.

The Future of Gambling in Illinois

Looking ahead, it seems inevitable that more communities in Illinois will eventually embrace video gambling, particularly as municipalities reconsider existing bans. Analysts at the Illinois Commission on Government Forecasting & Accountability indicate that the number of video gambling terminals could grow significantly should these citywide restrictions be lifted. As potential revenue sources become increasingly attractive, local governments that currently prohibit video gambling may reconsider their positions.

In conclusion, video gambling in Illinois has transformed from a fledgling industry into a significant economic powerhouse. With soaring revenues and increasing participation, it is clear that this form of gambling will continue to play an integral role in Illinois’s financial future. As more communities open their doors to video gambling, the trajectory of this industry is poised to reshape the overall gambling landscape in Illinois for years to come.