DraftKings Anticipates ‘Taking Action’ in Response to Illinois Sports Betting Tax Increases

• DraftKings informed Sports Betting Dime it will soon address the rise in Illinois sports betting taxes
• No specific details were shared, but a spokesperson said more information will be announced soon
• FanDuel today instituted its own per-bet fee on Illinois customers

DraftKings will soon address the new rise in Illinois sports betting taxes with action of its own, according to a company spokesperson.

A DraftKings spokesperson revealed to Sports Betting Dime that the gaming giant will soon address the increasing costs of doing business in Illinois with action of its own, but did not share specific details as to what the plan will be for the Prairie State.

“In response to the recent and prior mobile sports wagering tax increases in Illinois, DraftKings anticipates taking action and expects to share more information soon,” a DraftKings spokesperson told Sports Betting Dime.

Will DraftKings Mirror FanDuel?

DraftKings and FanDuel will be the two most impacted sports betting operators in Illinois after lawmakers agreed to charge licensed operators a per-bet fee beginning July 1, 2025. The new fee will impose a $0.25 charge on an operator’s first 20,000,000 online sports bets taken in the state each year. The fee will increase to $0.50 for every single bet taken after the initial 20,000,000 bets.

DraftKings and FanDuel are the only two operators in the state to previously eclipse the 20,000,000 bet mark and will likely do so again in 2025.

Just last year, Illinois lawmakers imposed a new tiered tax rate system on operators, requiring both FanDuel and DraftKings to pay a 40% tax rate rate. The new per-bet fees will increase the operators’ tax rate to about 57% or 60%, the highest rate in the country.

In response, FanDuel today announced a new $0.50 fee on Illinois customers for every bet placed in the state. The fees will begin on Sept. 1, 2025.

The per bet customer fee will be repealed if the state reverses its decision, FanDuel announced.

“It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth and maximize revenue for states over time. We are disappointed that the Illinois transaction fee will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state,” Peter Jackson, Flutter CEO, said in a release.

It’s unknown if DraftKings will institute a customer fee of its own, but it is a similar idea to something it proposed in 2024.

Is Gaming Tax Surcharge the Answer?

DraftKings could potentially look to a repealed plan to make doing business in Illinois more affordable.

In 2024, DraftKings leadership announced it would be institute a new “gaming tax surcharge” on winning bets in New York, Illinois, Vermont, and Pennsylvania as a way to combat rising tax rates and the cost of doing business in certain states.

DraftKings announced the new surcharge during its Q2 2024 earnings report as a way to ensure an operational effective tax rate of approximately 20% in those states. DraftKings representatives never announced specific tax surcharge rates, but did reveal it would have varied from state to state. In promotional materials, DraftKings showed the example of a +100 odds ticket for $10 in Illinois winning a total of $19.68, instead of the usual $20.

After customer backlash, DraftKings dropped the gaming tax surcharge from its plans. However, the tax surcharge plan, or an iteration of the plan, could again be imposed on Illinois customers to counterbalance the new fees.