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Illinois Making Moves to Sports Betting Regulation

There has been a lot of speculation as to what states will pass sports betting (and other online gambling) legislation in 2019. Companies are scrambling to make deals is prospective states to be ready for a quick launch. On Wednesday, Illinois took a huge step forward in pushing through new legislation when it hosted a hearing on the topic.

This is the second such hearing being hosted by lawmakers from two Senate subcommittees on gambling expansion, but since the initial hearing, much has changed in the landscape, specifically the movement on the regulated sports betting front. The meeting held in Springfield included a long list of speakers and guests from the daily fantasy, sports and casino worlds.

Originally, there was a bill named S-7 which was tabled back in 2017 which entailed an expansion of gambling in the state, but that was far more focused on land-based casino gambling. Since it was introduced, there have been lobbyists from the online casino and poker world working hard to get those products entered into the bill, but since the repeal of PASPA in May 2017, the focus seems to have shifted to the low-hanging fruit of sports betting.

The speakers were impressive

The star of the hearing was clearly Jim Ryan, who has two decades of experience in the online gambling world. Currently the CEO of tribal gaming group Pala Interactive, Ryan is no stranger to the U.S. market. His testimony was very casual in tone but not on topic. Ryan explained quite clearly and succinctly how easy it was for him to register for a black market sports betting account from his hotel room (who knows if he actually did this, but it was effective). He went on to say that no matter what the industry does to regulate the space, without implementing measures to curtail the black market, regulated sites would be fighting an uphill battle.

Many industry “protectors” were in the room

In addition to Ryan and his discussion, the committee heard from some of the groups that are working to protect the integrity of sports betting in the states that are currently live. Lindsey Slader, one of the founders of GeoComply, discussed how companies like hers are working with state regulators to ensure that sites and players are properly ringfenced to avoid play coming illegally from across state lines. These days, the underlying technology is so strong that within a few blocks of a state border, sites that use GeoComply will be able to block unwanted users.

Gaming Laboratories International spoke next to confirm what GeoComply was saying. In fact, Kevin Mullally from GLI mentioned that his company hired “ethical hackers” to try to break through the digital ringfence implemented in New Jersey by GeoComply. His company is focused on ensuring online gambling companies adhere to industry standard in regulated markets.

The leagues are all over sports betting

The professional sports leagues in the United States were also well represented at this hearing. The committee heard from John Corvino representing the Chicago White Sox for some local input, then he was followed by Josh Alkin from Major League Baseball, who hit home the importance of the leagues receiving a cut as an “integrity fee.” This is something that multiple states have heard from leagues like MLB and the NBA, but to date, no bill has been passed with this fee built in.

A new twist at this hearing was a representative for professional athletes being heard. Both the NBA and the NFL had representatives from their respective Players Associations on the panel, and their focus was more on the side of players being able to protect personal data as it relates to their health. An example about a possible injury affecting Lebron James in the NBA Finals was brought up again as a reason why a player should have some rights to keep that information private, even though it may have an impact on the betting lines.

What’s next for Illinois?

While this hearing went a long way to move the needle on sports betting regulations, there is still a mid-term election coming up in a few weeks. Following that, Bill S-7 will have to be amended to include sports betting, and then it will have to be presented to the Senate when it sits again in early 2019. We don’t expect to see any movement between now and the end of the year, but with a huge population and a big sports city like Chicago in the mix, you can bet that it won’t take too long in 2019 to pass legislation.