New Illinois Tax Generates Over $5 Million in Revenue for July

It’s too early to tell the actual impact of Illinois’ new per-bet tax, but July’s revenue numbers are a good sign for the state.

The Illinois Gaming Board released its report for July, which showed the state’s sports betting market grew by around 12% annually. With the new tax going into effect on July 1, it generated over $5 million in tax revenue. DraftKings and FanDuel were hit the hardest, combining to account for almost $4 million of that total.

Illinois lawmakers have been under fire from the sports betting industry, which has responded with dire warnings, surcharges, and increased minimum bet requirements. The state refused to back off on the tax, and it paid off in July.

Not only did the state receive a $5 million increase in tax revenue for the month, but it also saw the market grow during one of the slowest periods of the year for betting. That victory flies in the face of the industry's warnings, which had promised the market would shrink if the new tax were added.

All the online sportsbook operators in Illinois have added a per-bet surcharge or increased minimum bet requirements in response to the controversial tax.

Victory could be Short-Lived

As impressive and promising as July’s sports betting numbers are, it doesn’t guarantee future success. 

One reason for that is the start of the football betting season. This is the busiest time of year for sportsbooks, attracting a significant amount of action from bettors who typically limit their wagering to the NFL and NCAA seasons. 

Those bettors largely didn’t experience the new fees and minimums in July, but will in August and into the fall. This could lead them to wager less, or not at all.

Another big reason to doubt the tax’s future returns is that sportsbooks may not be done fighting back. All ten operators have left the door open for increased surcharges and minimums if the per-bet tax remains in place. 

They will have plenty of motivation to do so, as lawmakers in other markets closely watch the battle unfold. If the Illinois market continues to thrive, many states will follow suit.