Beginning on July 1, sports betting operators are going to find Illinois is a very expensive state to do business in. That’s because the Illinois State Legislature just approved a sledgehammer of a new tax scheme on regulated sports betting operators that places a $.25 tax on the first 20 million dollars worth of bets placed and a $.50 charge on all bets thereafter.
To say that the new tax is going to dig into business at DraftKings and FanDuel, the only Illinois-facing sportsbooks that would meet this threshold, is something of an understatement. Though lawmakers expect the new tax to annually bring in around $37 million in revenue for the state, the Substack Earnings and More suggests that it will cost operators around $80 million annually.
Not surprisingly, Illinois’ move to effectively move the tax on sports betting operators did not go down well with sports betting operators. A representative of the Sports Betting Alliance, a regulated gaming trade group, told Front Office Sports, “With this change, lawmakers are essentially urging customers—and especially these small dollar bettors—to switch to unsafe and unregulated sportsbooks who defy state consumer protections and generate zero taxes for state priorities. These illegal operators are the big winners from Saturday’s vote.”
A representative of the Responsible Online Gaming Association (ROGA) chimed in with a similar sentiment on X saying, “Illinois’ proposal to impose a tax on every sports wager would undermine responsible gaming. it risks incentivizing players to make larger wagers, or turn to unregulated operators that lack adequate RG protections.”
No matter the potential damage, the new tax kicks in at the end of this month.