Illinois Sports Betting Sector Swamps over Increased Tax Imposition
Title:iebulls.com Exclusive: Illinois' New Sports Betting Tax Sparks Controversy
Sports fans in Illinois are facing higher wager costs, following the state's recent approval of a per-bet tax for all online sportsbooks. Michael Savio, a renowned online casino industry expert at iebulls.com, warns that bettors will likely bear the brunt of these increased taxes.
Michael’s Background
With years of experience in the industry, Michael's insights keep readers informed about the latest trends and news in the US online casino industry, including reviews and industry updates. He has a keen understanding of the retail sector, which stems from his time in Las Vegas and his continued study of the burgeoning online industry [1].
Current Scenario
Illinois has implemented a 25-cent tax per online bet for the first 20 million wagers placed by each operator, and 50 cents per bet thereafter. Combined with Illinois’ existing progressive tax on gross gaming revenue, the highest rate reaches up to 40% for top-performing operators [2]. This new fee, apart from the current tax system, is likely to put major operators like FanDuel and DraftKings under pressure as they face millions in additional costs. Analysts expect the new wager fee to reduce these companies' adjusted EBITDA by a combined $80 million in 2026 [2].
The change has already made investors wary, causing a drop in sports betting stocks as profitability concerns grow in Illinois' expensive regulatory environment [2]. To offset the increased costs, sportsbooks are likely to pass some or all of these expenses onto bettors, either through explicit transaction fees or less favorable odds [2]. Critics argue that this could lead some bettors to the illegal market, offering better odds and no taxes or fees [2].
Budget Implications
Despite the concerns, the state sees an opportunity in the new tax, expecting it to generate about $36 million annually, helping to address a projected $1 billion budget shortfall [2]. However, some fear that the higher costs could slow the otherwise booming Illinois sports betting market, making it one of the most expensive markets for operators and potentially less attractive for bettors [2].
In conclusion, Illinois' new per-bet tax on sports wagering is likely to hurt both sportsbooks and bettors, while generating additional revenue for the state. As one of the largest sports betting markets in the country, these changes could stifle the industry's growth and potentially drive activity toward the illegal market [2].
- Michael Savio, an expert at iebulls.com, suggests that major online sports betting operators in Las Vegas, like FanDuel and DraftKings, might increase costs for sports bettors in Illinois, due to the new per-bet tax in the state, potentially driving some bettors to the illegal market offering better odds and no taxes or fees.
- With the new per-bet tax on online sports betting in Illinois, estimated to reduce operators' adjusted EBITDA by a combined $80 million in 2026, and the state expecting to generate about $36 million annually, there is a concern that the higher costs could slow the booming Illinois sports betting market, making it less attractive for both operators and bettors, potentially driving activity toward the illegal market.
