According to the annual report by the Illinois Government Forecasting and Accountability Commission, the gambling industry in Illinois experienced steady growth in the fiscal year 2024, with state-designated tax revenue increasing by 4.8% to $2.088 billion. This growth was primarily due to the expansion of video gambling, strong lottery sales, and the continued growth of sports betting. Despite a decline in traditional gambling areas such as horse racing, emerging forms of gambling are rapidly rising and reshaping the gambling landscape in Illinois for years to come.
Lottery, Video Gaming Terminals, and Sports Betting as Key Drivers of Growth
The largest source of gambling-related tax revenue within the state remains the lottery, generating $886 million in fiscal year 2024, up 6.9% from the previous fiscal year. However, video gambling is rapidly closing the gap, contributing $848 million to the state government, an increase of $35 million from fiscal year 2023. This growth in video gambling stems from the statewide expansion of terminal limits, with over 48,000 video gaming terminals (VTG) now in operation.
Since its launch in 2019, sports betting has gained considerable traction, contributing $190 million in taxes and licensing fees in fiscal year 2024, further solidifying its position as a growing source of revenue. In its fourth full year of operation, sports betting now accounts for 9.1% of the state-designated gambling tax revenue.
Casino Revenue Sees Modest Growth Amid Expansion
Thanks to the opening of two new casinos, the casino industry in Illinois saw a 13.2% increase in adjusted gross revenue (AGR) in fiscal year 2024. However, the impact of casinos on state revenue remains limited, with casino contributions to the Educational Assistance Fund remaining nearly flat at $158 million. Despite ongoing expansion efforts, reduced tax structures and higher management costs are considered factors contributing to this stagnation.
The Rivers Casino in Des Plaines continues to dominate the state's casino market, generating $527 million in adjusted gross revenue, far surpassing other Illinois casinos, including the Grand Victoria Casino in Elgin, which generated $146 million in revenue.
Video Gaming Terminals
The steady growth of video gaming terminals underscores their increasingly important role in the state's gambling ecosystem. In fiscal year 2024, net terminal income from video gambling rose to $2.933 billion, an increase of $282 million from the previous year. This growth, coupled with the current 34% tax rate, provided nearly $1 billion in tax revenue for state and local governments. According to the annual report by the Illinois Government Forecasting and Accountability Commission, plans to increase the tax rate to 35% in fiscal year 2025 are expected to further boost these figures.
The Challenging Future of Horse Racing
Despite the flourishing of most gambling sectors in fiscal year 2024, the decline of horse racing continues, contributing only $6 million to state revenue, accounting for just 0.3% of total gambling revenue. Total betting on horse racing decreased by 4.6%, dropping to $490 million, the lowest level in over forty years. The industry hopes that authorized racetrack casinos (casinos set up at racetracks) will provide much-needed support, although progress in these developments remains slow.
Legislative Changes and Future Growth
With the implementation of P.A. 103-0592 in fiscal year 2025, the gambling landscape in Illinois is facing further changes, with the law set to increase the tax rates for video gambling and sports betting. This is expected to bring additional tax revenue to the state, provided the sector can withstand the tax increase. Meanwhile, construction of new casinos and racetrack casinos continues, with operators and state officials closely monitoring how these developments impact the industry.
