Ill. Governor celebrates approval of gaming expansion, cigarette and online taxes

SPRINGFIELD, Ill. (KFVS) - An Illinois bill to expand gaming in the state has been approved.

Gov. JB Pritzker signed the Rebuild Illinois Capital plan Friday, June 28.

The gaming expansion bill, Senate Bill 690, was one of four bills approved in the capital package.

Pritzker visited Carterville on Tuesday, July 2 to celebrate the passing of the bill.

SB 690 not only expands gaming, but also legalizes sports wagering, increases the per-pack cigarette tax, collects sales tax from online retailers and creates a job act which encourages training in construction and building trades careers.

Hundreds of millions of dollars in revenue is expected with the approval of the bill.

Gov. Pritzker’s office states thousands of new jobs will be created and six new casinos will be authorized with the approval of the legislation.

Walker’s Bluff, a vineyard in southern Illinois, is expected to receive a gaming license to operate a casino and become a destination resort. Plans for the resort include adding a water park, a hotel, a convention center, a casino, more restaurants, a spa and more.

Cynde Bunch, the CEO and Founder of Walker’s Bluff released a statement following the signing of SB 690.

“We look forward to welcoming Governor Pritzker to Walker’s Bluff, another step closer to a new era of growth and much needed jobs for our communities," said Bunch.

The following is an overview of SB 690:

Legalization of sports wagering:

• Illinois becomes one of 14 state legalizing sports betting, allowing all casinos, racetracks, and sports venues that hold 17,000 people or more a brick-and-mortar license to operate a sportsbook.
• All licensees will be allowed to go online immediately upon being licensed by the Illinois Gaming Board.
• For the first 18 months after the first licensee is operating, all accounts must be set up at a licensed gaming facility.
• Within 540 days of the first license being awarded, the Gaming Board can accept applications for one of three online sports wagering operator licenses.
• Official league data will be allowed, betting on Illinois college teams will be banned, and a lottery sports wagering pilot program will be created.
• There will be a 15 percent tax on adjusted sports wagering receipts for each month.
• The Illinois Lottery will be granted a master license that will allow lottery sports betting terminals in 2,500 retail locations in the first year and 2,500 in the second year across the state. This license is for 4 years and must be competitively selected.
• Sports betting is estimated to generate approximately $58 to $102 million annually.

Sports Wagering Disparity Study and Supplier Diversity:

• The Illinois Gaming Board must conduct a study of the online sports wagering industry and market to determine whether to implement additional measures aimed at promoting diversity.
• The Board will evaluate race and gender-neutral programs or other methods that may be used to address the needs of minority and women applicants and minority-owned and women-owned businesses seeking to participate in the sports wagering industry.
• The study must be conducted by December 31, 2019 and published by March 1, 2020.
• To ensure supplier diversity efforts are made, the bill requires all licenses under the Sports Wagering act to submit an annual report beginning April 15, 2020 on all procurement goals and actual spending for female-owned, minority-owned, veteran-owned, and small business enterprises in the in the previous calendar year to the Gaming Board.
• The Gaming board and all licensees must hold an annual, public workshop starting in 2020 on the state of supplier diversity.

Authorization of licenses for land-based casinos:

• Licenses for six new casinos will be authorized. The licenses will be issued in Chicago, Waukegan, Rockford, the South Suburbs, Williamson County (Walker’s Bluff), and Danville.
• Licenses authorizes revenue-sharing with local municipalities.
• New casinos will be allowed up to 2,000 positions immediately, except for Walker’s Bluff, which is capped at 1,200, and the City of Chicago, which will be allowed up to 4,000 positions, including slots at Midway and O’Hare Airports.
• Horse tracks will be allowed 1,200 positions, and Fairmount 900 positions.
• Each of these casinos will be privately owned, and the Illinois Gaming Board will have oversight. SB 690 also implements a new tax structure for table games.
• City of Chicago’s share of casino proceeds includes an additional privilege tax of 33 percent of AGR and will be dedicated to their police and fire pension funds.
• Illinois Gaming Board must conduct a feasibility study.

Expansion of video gaming terminals (VGTs):

• This proposal protects small businesses and enables the state and local municipalities to gain much-needed capital revenue by raising the VGT tax by three percentage points, from 30 percent to 33 percent, in the first year and to 34 percent in the second year and beyond.
• The legislation also allows establishments to have up to six video gaming terminals, increases the maximum wager from $2 to $4, elevates the maximum cash award from $500 to $1,199, and authorizes an in-location progressive jackpot up to $10,000.
• Video gaming will be allowed on the Fairgrounds only during the Illinois State Fair and will be capped at 50 machines.

Expansion of gambling at horse tracks:

• Fairmount will be approved to increase their live racing dates to 100, up from 40.

Ethics:

• SB 690 makes administrative changes to the Illinois Gaming Board and Racing Board.
• This includes strengthening the ethics laws on members of the General Assembly, state employees, and members of the Gaming and Racing Boards, implementing a surcharge on the exchange of any gaming or racing licenses until 2027, and sourcing any non-resident gaming or racing winnings to Illinois if they are required to notify the IRS.

Parking garages:

• Parking garages will be taxed at the state level
• Tax on daily and hourly garage parking will be taxed six percent.
• Monthly and annual garage parking will be taxed nine percent.
• This tax is expected to generate $60 million in new annual state revenue.

Traded-in property exemption:

• Introduces a $10,000 cap per trade-in transaction on first division vehicles.
• Currently, traded-in property provides a sales tax exemption on the purchase of property up to the value of the property traded in.
• This cap will generate an estimated $40 million in new annual state revenue.
• Documentary fees will be raised from $150 to $300 and indexes it to CPI, which may be imposed on buyers for the handling of closing documents of a sale of a motor vehicle.

Cigarettes:

• The per-pack cigarette tax increases by $1, from $1.98 to $2.98, effective July 1.
• This increase is expected to generate $160 million in new annual state revenue.

Casino Gaming, Video Gaming, and Sports Wagering:

• Ongoing revenues from the gaming expansions included in SB 690 are estimated to total at least $350 million annually at full implementation and will support expected vertical capital debt service.
• Upfront revenues from license fees are scheduled to support pay-go capital costs.

Sales tax parity:

• Includes mechanisms to increase compliance for “remote” online retailers collecting state sales tax beginning July 1.
• Annual estimates for increased state sales tax collections are $200 million.

Data Centers:

• Data centers who have or plan to make a $250 million investment in Illinois will be exempt from sales and electricity taxes. If a data center is seeking an exemption for the construction or rehabilitation of its structure, the data center must require all contractors and subcontractors to comply with the responsible bidder sections of the Illinois Procurement Code.
• SB 690 also creates 20 percent income tax credit against wages if the investment by the data center is in an underserved area.
• The bill requires an annual report to the Governor and the General Assembly on the tax credit’s outcome and effectiveness.

Capital diversity provisions:

• SB 690 creates the Illinois Works Jobs Program Act, which includes the Illinois Works Preapprenticeship Program and the Illinois Works Apprenticeship Initiative.
• The goal of the Illinois Works Preapprenticeship Program is to create a network of community-based organizations throughout the State that will recruit, prescreen, and provide preapprenticeship skills training to create a qualified, diverse pipeline of workers who are prepared for careers in the construction and building trades. The Illinois Works Preapprenticeship Program will be funded by a $25 million transfer from the Rebuild Illinois Projects Fund.
• For public works projects, the goal of the Illinois Works Apprenticeship Initiative is that apprentices will perform either 10% of the total labor hours actually worked in each prevailing wage classification or 10% of the estimated labor hours in each prevailing wage classification, whichever is less.
• DCEO will create and administer the Illinois Works Bid Credit Program that will provide economic incentives, through bid credits, to encourage contractors and subcontractors to provide contracting and employment opportunities to historically underrepresented populations in the construction industry.
• The Illinois Works Review Panel, which shall consist of members appointed by the Governor and General Assembly leaders, shall make recommendations to DCEO regarding its identification and evaluation of community-based organizations and annually report its evaluation of the Illinois Works Preapprenticeship Program and the Illinois Works Apprenticeship initiative.

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