Sports wagering exchanges will become woven into the fabric of the Illinois gaming landscape if Illinois Rep. Bob Rita has his way. But the question remains, will it have enough support to get passed? And would it affect Illinois betting sites?
What’s a Sports Exchange?
If you have to ask, don’t worry, you are not alone. New Jersey is the only state currently offering sports exchanges, and a proposal from Illinois Rep. Bob Rita in the form of HB 1405 would make the Prairie State only the second in the nation to sanction them, allowing the state a cut of the proceeds. The Illinois Gaming Board (IGB) would award the licenses under the provisions of this legislation.
The bill would allow two licenses for “the buying and selling of betting contracts at any time prior to the conclusion of an event based on a describable zero to 100 scale of probability and employing a recognized market surveillance technology used in United States financial markets that is capable of identifying wagering activities indicative of problem gambling, money laundering, and other actions detrimental to the integrity of sports wagering.”
Essentially, an exchange is a “marketplace that allows bettors to wager against each other at lower fees than those offered by a traditional sportsbook. Two customers agree on the odds and stakes for a given game, and bet against one another.”
The exchange would allow bettors to create their own odds and bet with each other at agreed-upon terms, eliminating the traditional middleman, aka the sportsbook, from the transaction. The exchange would then charge a small commission, of which a 15% tax would be shared with the state according to the bill.
Gambling Business Brisk in Illinois
There are currently seven tethered online sportsbooks in Illinois; BetMGM, Caesars, PointsBet, BetRivers, FanDuel, DraftKings, and Barstool. All of them are connected to land-based casinos and are available through online registration for those located within the boundaries of the state.
There is also a plan for a Bally’s casino in Chicago, the first one ever for the Windy City, and the projected cost is $1.8 billion for the project set to open in 2026 at the site of the old Chicago Tribune Publishing Center. The anticipated revenues are expected to reach upwards of $800 million annually which will be another boon for the state of Illinois.
However, the interactive division of Bally’s, known as Bally Bet, is downsizing as evidenced by a letter to the Securities and Exchange Commission on January 19th in which Bally’s CEO Lee Fenton, stated, “The pandemic boosted our business and we continued to hire at full pelt. I now can see that we may have over-hired in some areas and I take full responsibility for that,” Fenton said.
The Bally’s CEO foreshadowed the move back in November when he stated, “Our progress on sports has taken longer than we expected and we will not support the sports iGaming markets with marketing dollars until we have got the user experience and the technology where we want it. We’ll be minimizing the losses related to sports betting – and in the end, that’s what North America interactive should be.”
*Bookmakers Review will continue to monitor this story and update our readers as events unfold.