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Online Poker in Illinois? It’s a Possibility

This week’s passage of an omnibus gambling expansion bill by an Illinois state Senate committee made some headlines for its inclusion, within its massive 555 pages, language authorizing online poker.  There’s a lot more to the story, so if you’re hoping to be one of the Anteing Illini, read on.

illinoisThere’s a lot of political in-fighting involved in the Illinois gambling scene, which if you know anything at all about Illinois and Chicago politics, should be unsurprising.  The state’s unofficial motto of “Vote Early! Vote Often!” speaks surprisingly well to how Illinois politics really works, as does the typical career track taken by most recent Illinois governors: State Legislative Seat –> Governor –> Prison –> Chicken-dinner banquet circuit.

No word yet on when or if sitting Governor Pat Quinn plans to follow in the steps of his predecessors, Govs. Ryan and Blagojevich, but it represents a good jumping-off point for this latest look at Illinois politics.

An expansion of gambling within Illinois has been a hot-button topic for years, in a state where only a fixed number of “riverboat” casinos are available under state law.  The last of these casino licenses,given to the Rivers Casino in Des Plaines near O’Hare International Airport, allowed Rivers to open about a year ago, and yes, there’s probably an old creek or ditch or something on the property somewhere that runs down to the Des Plaines River, more or less keeping that part of the law intact.  (They’d dig one if they needed to, believe me.)

That brings up the next stage of casino expansion, and what will involved in that has been a war for years.  The new Des Plaines casino is the closest yet to the mega-population center that is downtown Chicago, which has always been something of a no-go zone in the state’s previous gambling-expansion wars.  Yet that prime territory continues to be eyed by the state’s casino-expansion advocates, along with other locales, such as Rockford, an hour and a half west of Chicago itself.

This 555-page bill is mostly about defining the groundwork for the eventual arrival of a downtown Chicago casino, and everything else is secondary to that goal.  Yes, proposed online poker regulations are part of the bill, but to tout this as an “online poker” misses what’s going on in Illinois.  What happened is that Gov. Pat Quinn just vetoed the previous version of the gambling bill being argued, and State Sen. Terry Link responded by resubmitting this latest version, which will no doubt get thrashed around, and result in still another version at a future date.

What Link’s latest version does do is incorporate several of the new topics that have become legislation-worthy since the last major proposal (officially an amendment to Illinois’ existing gambling codes) was released.  And since this version now talks about online poker, it becomes newsworthy in that sense, even if the whole Illinois online-poker thing isn’t going anywhere until the battle over the next generation of Illinois land-based casinos is resolved.

So with that mighty preamble describing how it all fits together, here’s the skinny on the online-poker portions of the latest Illinois proposal, offered as an amendment to Illinois Senate Bill 1739:

  • The bill would call for the creation of the Illinois Division of Internet Gaming, which would be run as a sub-division of the Illinois Lottery.  (The Illinois Lottery, you might remember, succeeded recently in becoming the first US state to be able to sell lottery tickets online.)
  • Online poker is just one of several games that would be authorized, along with online versions of most casino games.  Only sportsbetting would be expressly prohibited.
  • Lightweights need not apply.  There will be a $250,000 application fee and a $20 million dollar licensing fee (which will be applied toward the first $20 million in taxes due.  Licenses would be granted for five-year periods, with additional five-year renewals available after that.
  • As our own John Mehaffey noted in a piece on the legislation here, there is indeed a bad actor clause, with some unique phrasing: “No Internet gaming license shall be granted to any applicant who has accepted wagers via the Internet in contravention of this Section or United States law in the 10 years preceding the application date.”  This is a slick way of getting rid of all the former online competition; not just PokerStars, but PartyGaming, 888 Holdings, Playtech, all of them.  That it could have some adverse impact on software partnerships already in place in other states (e.g.; Nevada) is one of those matters no doubt left to future negotiations.
  • The proposal is not for intrastate (within Illinois only), but expressly authorizes Illinois to negotiate compacts with other jurisdictions: “The Division of Internet Gaming is also authorized to enter into agreements with other gaming entities, including foreign entities, for the purpose of facilitating, administering, and regulating multijurisdiction Internet gaming to the extent consistent with State and federal laws and the laws of any foreign jurisdiction, if such jurisdiction is a party to the multijurisdictional agreement.”

The proposal specifically cites the September, 2011 reversal of the Justice Departmnt regarding the reach of the Wire Act (and by extension, the UIGEA) as sufficient cause for the state to go ahead and consider online legislation of this nature.  The online lottery sales mentioned above were one of the instigating factors in that decision being rendered in the first place, and this ripple effect now continues concurrently in Illinois and several other states, now that the outer reach of the Wire Act seems to have been defined.

Still, there’s a long, long way to go before full regulated Illinois online poker becomes a reality.  One need look no further than the $8-rake games at the Hollywood Casino to see that Illinois casino owners and politicians view both poker and gambling as golden eggs from the goose, a goose that’s going to be fed well in the years to come.

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