Increase in Minimum Wager at BetMGM in Illinois due to Tax Increase
In a move to adapt to the new financial landscape, Illinois sportsbook operators have announced changes to their betting policies, primarily in response to the state's recently implemented per-bet tax levy. This levy, effective from July 1, 2022, charges sportsbooks $0.25 for the first 20 million bets and $0.50 for each bet thereafter in a given year.
One of the leading sportsbooks in the state, BetMGM, has increased the minimum betting stake to $2.50 for all customers, effective from Wednesday, July 16. Other sportsbooks, such as Hard Rock Bet, have set a minimum bet of $2.00. These changes aim to limit the number of low-value wagers that lead to disproportionately high cumulative tax expenses for the operators.
In addition to the minimum bet increases, major sportsbook companies like Flutter Entertainment (FanDuel), DraftKings, and Fanatics are introducing transaction fees, which will be passed directly onto consumers. BetMGM, for example, will charge a transaction fee of $0.50 per bet after the first 20 million online sports wagers. Other sportsbooks may charge $0.25 per bet for the first 20 million online sports wagers.
These measures are strategies to manage the increased financial burden created by Illinois' pioneering per-bet tax structure. This structure is unique compared to other states and is aimed at generating significant state revenue from sports betting activities. It's important to note that these changes apply to all wager types, including straight bets, parlays, same game parlay, and round robins.
The communication of these changes has been done privately, with customers receiving letters explaining the changes, rather than public announcements. The letter from Par-A-Dice Casino, BetMGM's land-based casino partner in Illinois, serves as an example of this approach. Other sportsbooks, such as FanDuel, DraftKings, and Fanatics, have also confirmed they will implement similar changes.
These adjustments reflect a trend where operators are moving from absorbing tax increases to offloading some costs to bettors to preserve profitability in Illinois' highly active betting market. As the sports betting landscape continues to evolve, it will be interesting to see how these changes impact the betting habits of Illinois residents and visitors.
Sportsbook operators in Illinois, such as BetMGM, have increased minimum betting stakes in response to the state's per-bet tax levy, aiming to limit the number of low-value wagers that lead to disproportionately high cumulative tax expenses. Moreover, major sportsbook companies like Flutter Entertainment (FanDuel), DraftKings, and Fanatics are introducing transaction fees, which will be passed directly onto consumers.
