Illinois Gambling Tax Revenue Reaches Historic $2 Billion Milestone in FY24
Record-Breaking Revenue for Illinois Gambling Industry
Illinois’ gambling sector achieved an unprecedented $2.08 billion in tax revenue during the 2024 fiscal year (FY24), as reported by the state’s Commission on Government Forecasting and Accountability. This represents a 4.8% rise from the $1.99 billion collected in FY23, setting a new record for the state.
Top Performers: Video Gaming, Lottery, and Sports Betting
The surge in revenue is attributed to the continued growth of video gaming terminals (VGTs), robust lottery sales, and expanding sports betting markets. Key contributions came from:
- Lottery: $886 million in tax revenue.
- Video Gaming Terminals: $848 million.
- Sports Betting: $190 million from taxes and licensing fees.
Horse racing contributed $6 million, while casinos generated $158 million—showing a marginal increase from FY23’s $157 million. Despite the launch of two new casinos, the industry’s fiscal impact remains limited due to lower tax rates and significant administrative expenses.
Video Gaming Dominates the Market
Since the 2009 legalization of VGTs, the segment has seen explosive growth. By June 2024, Illinois had 48,176 operational terminals, a sharp rise from just 61 in 2012. Correspondingly, tax revenue from VGTs has grown exponentially, climbing from $145.6 million in FY14 to $997 million in FY24.
With a planned tax hike on VGT net income from 34% to 35% in FY25, this sector is expected to sustain its leadership in revenue contributions. However, this dominance has intensified competition for casinos, which struggle to match the convenience of video gaming parlours—a challenge exacerbated by the COVID-19 pandemic.
Casinos Face Mounting Challenges
Although Illinois casinos reported $1.61 billion in adjusted gross revenue—their highest total since FY12—revenue stagnation persists. Over the past decade, 10 of the state’s 15 casinos have seen revenue decline by 18% or more.
The planned opening of a new Chicago casino in 2026 offers potential growth but may also intensify competition, risking further revenue cannibalization among existing operators.
Sports Betting Thrives Amid Growth
Sports betting continued its rapid expansion, with adjusted gross revenue surpassing $1 billion for the first time in FY24. Tax collections from sports betting rose 16% year-on-year to $166 million.
However, the introduction of a progressive tax structure in FY25—ranging from 20% to 40%—may impact operators’ strategies, particularly in advertising and business models. Despite this, industry analysts remain optimistic about the sector’s future, underpinned by the increasing popularity of online betting and sustained marketing efforts.