Illinois Gambling Profits and Taxes – Where Are They Going?

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The US has been one of the most progressive business areas in the world for decades, even centuries. If you stop and think about it for a moment, most of the tech gadgets and tech concepts we use today were conceived in the ol' US of A.

Still, the federal government and respective state authorities throughout the country are unusually strict about some industries. Online betting and gambling is one such field.

The Illinois State of Gambling

From Alaska to Florida, Americans face numerous legal specifics if they want to place a simple wager online. A Pennsylvanian, for instance, can freely and legally bet or gamble online, as the Keystone State legalized most iGaming features in 2017.

A citizen of Illinois, on the other hand, can play a limited number of games at strictly defined venues. Namely, video gaming, riverboat casinos, and horse racing are allowed, while other betting and gambling options aren’t.

Luckily, the Illinoisans can indulge themselves in online casinos outside the Land of Lincoln. For instance, if you live in this state, you can try iGaming via offshore gambling websites. As explained by Aneeca Younas from Techopedia, offshore online casinos aren’t under the jurisdiction of the Illinois law on gambling. Hence, people from the Prairie State can simply register and enjoy their favorite games in the offshore cloud. (Source: https://www.techopedia.com/gambling/illinois/online-casinos).

One to remember is that all the money you earn via offshore online casinos must be included in your tax return; include those earnings in your return so that you pay the due taxes when the time comes.

On the other hand, the money won in brick-and-mortar casinos on the territory of the State of Illinois is subject to the flat rate tax of 4.95% - analogous to the individual income tax rate in this state. If you win $1000, your due tax will be $49.50.

Corporate Gambling Taxes in Illinois

Corporate taxes are calculated and collected at different rates, depending on the amount of income and various ranges, as specified in a guide published by the American Gaming Association. Currently, the corporate tax on gross revenue is 15% for companies that make up to $25 million per year, with gradual increases with higher annual revenue. What’s more, Governor Pritzker has recently announced that these rates should be increased in the foreseeable future.

Speaking of taxes, it’s always interesting to see how national governments and federal states invest the money they collect from betting and gambling.

Let’s go back to Illinois; according to the Illinois Gaming Board (IGB), the state and local governments collected $1.5 billion in tax revenue in 2023.

Gambling Tax Revenue Distribution

It’s interesting to see the distribution of the assets generated through this tax revenue, mostly because gambling legislation is often exposed to controversial public debates.

For instance, elementary and secondary education institutions were allocated $157 million from the earnings generated by Illinois-based casinos in 2023. There was a one-time transfer ($92 million) and regular $5.53m monthly allocations to the School Infrastructure Fund.

Local governments received $141 million from the taxes collected on the revenue from slot machines and other video game terminals.

Speaking of video game terminals, the Illinois Capital Projects Administration was provided with almost $1 billion, which was redirected to upgrading the infrastructure within the state.

If the Governor’s proposal explained above is adopted and comes into effect soon, the State of Illinois and its constituents can expect more revenue from the local gambling industry.

If you or anyone you know has a gambling problem, call 1-800-GAMBLER.