Illinois Lawmakers Approve Budget With New Sports Betting Taxes
By Robert Linnehan in Sports Betting News
Published:
- Illinois lawmakers approved a fiscal year budget on Saturday, May 31
- The $55.2 billion budget includes yet another sports betting tax hike
- A $0.25 tax will be included on the first 20,000,000 bets taken in the state, and $0.50 for every bet thereafter
A last minute proposal to include a new tax on Illinois sports bets was approved by state lawmakers on Saturday, May 31, as the state’s $55.2 billion fiscal year budget will soon be signed into law by Gov. J.B. Pritzker (D).
This comes less than one year after Illinois vastly overhauled its sports betting tax system to increase rates for nearly every licensed operator in the state.
The new tax will see a new charge on the first 20,000,000 online sports bets taken in the state, and an increased charge on every bet taken thereafter.
New Fee on Every Single Illinois Sports Bet
The new fee will see a $0.25 charge on the first 20,000,000 online sports bets taken in the state each year. The fee will increase to $0.50 per bet for every single bet taken after the initial 20,000,000 bets.
According to a report from the Chicago Tribune, the new fee is expected to bring in $36 million annually to the state.
The amendment, introduced and approved by House Democrats on Saturday, comes less than a year after Illinois approved a new sports betting tax fee structure that increase taxes for nearly every licensed online operator in the state.
Discussions on the plan for the sports betting fees were brought to light just yesterday, leaving gaming industry representatives scrambling to oppose the measure. Operators sent out email blasts to Illinois customers urging them to oppose the fee to their Senate and House representatives, while the Sports Betting Alliance also mounted a last minute email campaign to oppose the fee.
Even Rob Gronkowski, a FanDuel spokesperson, urged his fans to oppose the measure in Illinois.
Despite the opposition, the fiscal year budget was approved prior to the May 31 midnight deadline and will be sent to Gov. Pritzker for his approval. He has already said he will sign the budget into law.
Fee Comes Month After Tax Increase
With the new fee per bet, Illinois will feature some of the highest tax rates in the country for sportsbooks.
Gov. Pritzker signed the Illinois FY 2025 budget into law on June 1, 2024, which included a new progressive tax rate for licensed state sportsbooks. The state budget includds the first-ever progressive tax rate for sports betting operators in the country, which will see sportsbooks pay a rate of 20% to 40% based on adjusted gross revenues.
The new rate went into effect on July 1, 2024.
Based on the structure, operators pay taxes based on the following adjusted gross sports betting revenue totals:
- $0 to $30 million: 20%
- $30 million to $50 million: 25%
- $50 million to $100 million: 30%
- $100 million to $200 million: 35%
- Over $200 million: 40%
Operators will also be required to pay separate taxes based on the sliding scale for both retail and online sportsbooks.
Currently, FanDuel and DraftKings would be the only two operators in Illinois to be in that top-tier tax structure and have to pay a 40% rate. FanDuel totaled more than $421.3 million in adjusted gross revenue and DraftKings reported $349.9 million.
Regulatory Writer and Editor
Rob covers all regulatory developments in online gambling. He specializes in US sports betting news along with casino regulation news as one of the most trusted sources in the country.
