Tucked into the state budget about 48 hours before Saturday’s midnight deadline, Illinois lawmakers are imposing a fee on sportsbooks for every wager they write. This is the first such fee in the country.
Gov. Pritzker signed the bill into law the next day, Sunday, June 1. The new Illinois fiscal year begins on July 1.
The new sports betting tax is part of $1 billion in new taxes levied under the $55.2 billion budget. Nicotine products and businesses are also seeing new taxes under the amendment.
Sports betting operators now face a tiered per-wager tax structure: 25 cents per bet on the first 20 million wagers and 50 cents on wagers placed after that.
This, of course, is on top of the 20-40% tax on revenue operators pay in Illinois, depending on their size, an increase from the 15% under the state’s original sports betting law.
Per numbers crunched by Straight to the Point, the new fee will raise the tax rate paid by DraftKings and FanDuel in Illinois to 57-60%, higher than they pay in any other state. New York, New Hampshire and Rhode Island tax sportsbooks at 51% of revenue.
Calculations tweeted by Blackmrprophet74 show that, had the new fee structure already been in place, FanDuel would have paid about $39.2 million on the 88-plus million bets it wrote from July 2024-December 2024, and DraftKings would have paid about $34 million on 78 million bets.
The new sports betting tax will add an estimated $36 million to state coffers, per the Chicago Tribune.
Opposition
The amendment was added to the budget by the super-majority Illinois Democrats, leaving barely any time for opposing voices to be heard.
Neither Republicans nor the sports betting industry are thrilled.
Views from Springfield
The state’s Republican lawmakers contend the Dems forced the bill through.
“We’re rushing this process like we always do.” said Rep. John Cabello, per Capitol News Illinois. “‘Let’s hide this stuff. Let’s hide it so that the public doesn’t see it until it’s too late.’”
That’s a common complaint from the GOP, Democrats responded, while shifting the blame to President Trump.
“Erratic leadership in Washington has affected our economic outlook, our revenue projections, and even threatened federal funding for our most crucial services,” House Majority Leader Robyn Gabel said.
Added Gov. Pritzker, “Even in the face of Trump and Congressional Republicans stalling the national economy, our state budget delivers for working families without raising their taxes while protecting the progress we are making for our long-term fiscal health.”
Bad for bettors
The Sports Betting Alliance, a trade group composed of industry giants BetMGM, DraftKings, FanDuel and Fanatics, encouraged citizens on Saturday to email their state representatives, via the SBA website.
The SBA’s message:
Right now, behind closed doors, IL lawmakers — led by Senate President Harmon and House Speaker Welch — are debating making customers PAY A FEE FOR EVERY SINGLE LEGAL ONLINE SPORTS BETTING WAGER.
Yes, you heard that right, every time you want to place a legal bet online, Illinois wants to charge YOU a fee. This will get decided in hours. Not days, not weeks. Hours from now.
If you want to stop the Illinois wager fee, Springfield needs to hear from you right now before it’s too late.
Joining the last-minute, ultimately-futile push to halt the new sports betting fee:
- Professional bettor Rob Pizzola: “No input from the people it impacts most. The bettors. I know a lot of bettors in Illinois. This is unfair and would hurt the experience.”
- Barstool Chicago: “Make your voice heard NOW before its [sic] too late!”
- FanDuel endorser Rob Gronkowski: “Illinois is trying to take away gambling!”
By 10pm ET on Saturday, two hours before the deadline, 55,000 emails had been sent, the SBA said.
While the SBA’s implication that the tax is being levied directly on the customer is a bit misleading, at least some of the cost will likely be passed on to bettors.
“I imagine pricing will worsen statewide and minimum bet amounts may raise. Initial and early thoughts,” Jeffrey Benson, Circa Sports’ Director of Operations, tweeted in response to a question about how the sportsbook will handle the new Illinois tax and what impact it might have on players.
“This is an extremely disappointing decision that will cause real harm,” SBA President Jeremy Kudon said. “Rather than heeding the outcry from tens of thousands of residents who vocally opposed more than doubling sports betting taxes, the Illinois Senate advanced a budget tonight that would make Illinois sports betting tax the second highest in the country and counterproductively penalizes sports betting operators who invested millions into the local economy and created jobs in the state.”
Gambling lobbyist and analyst Steve Brubaker suggests prediction markets could gain some business from the fallout:
“Straight bettors heading to Kalshi. SGP bettors won’t even notice,” Brubaker tweeted.
