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Legislators of Illinois Imposing Tax on Every Sport Wager Through New Fee

Sports betting in Illinois to incur a tax ranging from 25 cents to 50 cents per bet.

,   and  ASMedia
2 min read
Illinois lawmakers have opted to implement a tax on each sports wager within the state, commencing...
Illinois lawmakers have opted to implement a tax on each sports wager within the state, commencing at 25 cents and escalating to 50 cents.

Illinois' Sports Betting Tax Boost: Breaking it Down

Legislators of Illinois Imposing Tax on Every Sport Wager Through New Fee

Strapped for cash, state governments across the US are exploring innovative ways to generate income. In Illinois, lawmakers have a new strategy: slapping a tax on every sports bet made online. This recent move, settled on the final day of the legislative session, has left operators off-guard. The budget, totalling $55.2bn, is set to be signed by Governor JB Pritzker soon.

Here's the skinny on this unusual tax: a flat fee of $0.25 will be charged for the first 20 million online sports wagers each year. After this threshold, the tax jumps to an extra $0.50 per bet. According to estimates from the Chicago Tribune, this tax could rake in about $36m annually for the state [1][2][3].

This isn't the first time Illinois has dipped into the sports betting pot to fill its coffers. Last year, lawmakers updated the tax structure, making it a tiered system. From July 2024, almost every operator will pay more to the state, with leading lights like FanDuel and DraftKings forking out 40% on revenue [1][2][3]. Other states have since followed suit.

Key Points

  • Initial Charge: Chicago bettors will face a tax of $0.25 per wager for the first 20 million online bets each year [1][2][3].
  • Subsequent Increase: From the 20 millionth bet, a tax of $0.50 per wager will be applied [1][2][3].
  • Expected Annual Revenue: The new tax is anticipated to generate around $36 million for the state [2].
  • Impact on Industry: Major sportsbooks such as FanDuel and DraftKings could see their adjusted EBITDA drop by a combined $80 million in 2026 due to these additional costs [2]. The sports betting industry is worried these high taxes could push users towards illegal markets [3].

Illinois bettors may encounter an initial tax of $0.25 per wager for the first 20 million online bets each year, while subsequent bets will be taxed an additional $0.50 per wager. This new tax is projected to generate approximately $36 million annually for the state.

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