Illinois Lawmakers Approve New Tax for Online Sportsbooks

It just got a little more expensive for online sportsbooks in the Land of Lincoln. 

Illinois lawmakers approved a new budget on Saturday, which includes a new tax for sports betting operators. The change will add a $0.25 tax per bet for the first 20 million wagers every year. Once sportsbooks accept over 20 million bets, that rate is bumped up to $0.50.

Illinois accepted 370 million wagers in 2024. Based on those numbers, the new tax would likely add over $150 million in revenue for the state.

The new tax comes just one year after the state made a drastic change to how sportsbooks are taxed. After an attempt to implement a massive hike failed, lawmakers devised a tiered system that taxed each operator based on the amount of revenue generated. That means DraftKings and FanDuel, the two industry leaders, pay a far higher rate than the state’s other operators.

The budget has now been sent to Governor JB Pritzker for final approval. He has been pushing tax hikes on sportsbooks in the past, and is expected to sign the budget as is.

SBA Rips Illinois Lawmakers

The Sports Betting Alliance released a statement soon after the budget. They accused the state of discrimination and promised that bettors in the state would be the ones absorbing this tax. 

“Make no mistake, this discriminatory, punitive, and constitutionally suspect tax increase on legal sportsbooks who have invested more than a billion dollars in the state will be destabilizing for regulated sports betting in Illinois,” the statement said. “A per bet tax most penalizes small recreational bettors, many of whom are betting a single dollar or two. Under this legislation, these popular bets will get hit with a massive 25% or 50% tax.”

While the SBA and its member sportsbooks have always used threats of watered-down odds and fewer bonuses to prevent tax hikes, Illinois is once again calling their bluff.

Lawmakers are gambling that smaller operators won’t stand with FanDuel and DraftKings, who own over 80% of the market share nationwide. Once industry leaders take action, it will open up opportunities for smaller operators to gain an advantage with better odds and more promotions.