Two years ago, the U.S. Justice Department shut down online poker sites such as PokerStars and Full Tilt.  In March, a senate bill introduced in the Illinois State Legislature would enable online poker operators to apply for legal gambling licenses, according to the Chicago Tribune.

The new measure is controversial since PokerStars was once accused by federal prosecutors of money laundering and fraud.  Additionally, many of the professional players who earned their livelihood playing Texas Hold’em avoided paying any state and federal income taxes.  Several online poker sites have also been hacked by unscrupulous parties who cheated unsuspecting opponents out of millions of dollars.

Illinois is mired in record budget deficits, state debt, and unfunded pension liabilities for its public employees and union members.  Thus, state officials are desperate to generate tax revenues.  In 2014, Illinois is expected to have nearly $2 billion in unpaid bills to vendors.

Senate Bill 1739 is sponsored by state Sen. Terry Link, D-Waukegan would enable PokerStars and Full Tilt to apply for Internet gambling licenses in the state.  Link inserted a technical provision in which sites had to be “convicted” of crimes in order to be disqualified from securing such licenses.

Credit: Commons/Wikimedia

PokerStars settled criminal charges in 2012 for $731 million.  Technically, the popular online poker portal was never convicted of any wrongdoing in the eyes of the law.  The site’s interests is being advanced by lobbyist John Kelly, Jr., president and owner of All-Circo Inc.  Approval of online gambling licenses will likely lead to between $400 million to $1 billion in yearly taxable revenue.  Additionally, states that already have casino and horse track infrastructure such as California, Nevada, Florida, New York, New Jersey, Connecticut, and Louisiana could follow suit in legalizing online gambling.

Last year, Illinois became the first state in the United States to sell lottery tickets online.  The Obama administration and the Justice Department had struggled on whether internet gambling violated federal laws.  Officials at the D.O.J. finally ruled that state-run lotteries could be sold on the Internet – a highly controversial interpretation since federal statues forbid games of chance from being operated online.

The online poker industry totals $33.8 billion worldwide.  However, passage of Internet gambling licenses has implications beyond Texas Hold’em players, according to  It will likely lead to the establishment of Internet-based casinos, horse racing wagers, and sports betting portals.  Opponents argue that such a move would be dangerous since it would effectively establish a virtual casino in every household that has an Internet connection.

Senate Bill 1739 is currently pending in the Illinois legislature.