Illinois regulators move to bring video gambling under self-exclusion program

Problem gamblers seeking to avoid the temptation to gamble can ban themselves from most of the state’s gambling offerings, from casinos to online sportsbooks to the Lottery.

But the state’s voluntary self-exclusion program does not extend to Illinois’ extensive network of video gambling terminals — the largest in the world — that can be found in gas stations, bars, hair salons and hotel lobbies across the state.

Regulators are looking to change that.

The Illinois Gaming Board proposed new rules Thursday to bring the state’s video gambling terminals under the program that allows problem gamblers to self-ban by requiring identity verification before players can purchase vouchers at video gambling locations.

The new rules would also create new options for cashless wagering and player rewards programs.

Gaming Board Administrator Marcus Fruchter said the move was “another critical step forward” in the agency’s goal to bring video gambling under the program’s umbrella.

“We are decidedly on the right path and will continue driving forward, but we will do so in a focused, collaborative, intentional, and efficient manner as we advance this critical initiative,” Fruchter said.

The Gaming Board identified closing the coverage gap for video gambling as a “public health priority,” and passed a resolution expressing its commitment to doing so during its September meeting.

The board unanimously approved the proposed rules, sending them to the General Assembly’s rulemaking committee for review, a process that usually takes between six months to a year and gives opportunities for public comment.

The new rules would shift the way gamblers pay to play on video gambling machines, which would no longer accept cash directly.

Instead, players would purchase vouchers from a payout device, either with cash or with digital payments through a video gaming account. Both options would require identity verification to confirm players are at least 21 years old and not on the self-exclusion list.

Using a video gaming account would be voluntary, and players could still use cash to purchase vouchers from the redemption terminal after identity verification.

Video gambling operators that offer accounts would be required to give players tools to set responsible gambling limits, actively keep self-excluded gamblers from opening accounts and refrain from sending promotional materials to those on the list. They would also be allowed to run player reward programs for non-excluded players.

One consequence of having so many cash-filled video gambling machines sitting in businesses across Illinois has been a rise in burglaries at those locations.

But while decreasing the burglary risk may be a byproduct of the new rules, Fruchter said it’s more about bringing video gambling in line with the rest of the industry, where cashless wagering and player accounts are standard.

Allowing digital payments also allows more options for customer controls and money laundering prevention, Fruchter added.

However, cashless wagering can also reduce the friction for bettors, allowing them to spend — and lose — more cash.

Acres Manufacturing, a Las Vegas-based company that released a new cashless betting technology last year, conducted a six-month case study on its impact.

Cashless gamblers purchased 92% more gambling credits per session and were more likely to re-up than players paying with cash, Acres found .

“Our study makes clear that players spend significantly more when using a cashless funding option,” Acres told the Nevada Independent.

If true more broadly, that could have major ramifications for betting behavior in what is already Illinois’ highest-grossing source of wagering revenue; the machines brought in more than $1 billion in state and local tax revenue last fiscal year, with gamblers losing more than $3.3 billion.

Fruchter said it’s one of the issues the Gaming Board wants to discuss further in the public comment period of the rulemaking process.

The biggest hurdle to bringing video gambling terminals under the state’s self-exclusion program has been the technology needed to upgrade the state’s roughly 50,000 video gaming machines to connect with the list maintained by the state while maintaining data privacy protections.

The Gaming Board has contracted with LNW Gaming, which builds slot machines and table games, to upgrade the state’s machines for that purpose.

Fruchter said he was confident that the work would be ready to deploy next year, giving the state the technological capacity to bring video gambling terminals under the self-exclusion program.

This story was originally published by Capitol News Illinois and distributed through a partnership with The Associated Press.