Illinois Rep Hopes to Do Away With Sports Event Contract Tax

• Rep. Travis Weaver (R-104) introduced a bill to repeal a recently approved prediction market tax
• Illinois legislators approved a state budget in July that included the tax
• Prediction market operators are required to pay a tax depending on the number of sports event contracts traded on their platform

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One Illinois House of Representative member is hoping to repeal a tax on prediction market operators that has only been in effect for less than three months in the Prairie State.

Rep. Travis Weaver (R-104) recently introduced HB 5811, a bill that does away with the approved tax on prediction market operators and sports event contracts traded on their platforms. His bill strikes any references to “exchange wagers” in the state’s sports wagering act.

The new tax went into effect on July 1, 2026, after Gov. J.B. Pritzker (D) signed the state’s $56 billion 2027 budget into law this past June.

Repealing First-In-Nation Sports Event Contract Tax

Weaver’s bill will repeal the nation’s first sports event contract tax if signed into law. Introduced on Sept. 3, the legislation has yet to be assigned to a committee for discussion. If approved, it will go into effect immediately.

His bill targets an approved prediction market tax included in the 2027 Illinois budget. The document included a new tiered tax rate for “exchange wagers,” which are defined as “an agreement, contracts, transaction, or swap that is offered, traded, or executed on a prediction market or exchange tied to a sporting contest or sporting event.”

Prediction market operators are now required to pay a transaction tax equal to 1.75% for each exchange wager. After the first five million exchange wagers conducted by a prediction market operator during a fiscal year, the transaction tax will increase to 3.5%.

The exchange wager tax revenues will be deposited monthly into the state’s sports wagering fund.

It is a similar tiered system as to the state’s sports betting tax rate and per-bet fee policy. Licensed Illinois sports betting operators pay taxes based on the 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%
• $200 million and up: 40%

Illinois also requires licensed sports betting operators to pay a $0.25 transaction fee for its first 20 million bets taken in the state, which increases to $0.50 for every bet thereafter each year.

North Carolina Also Passed Prediction Market Tax

Just days after Gov. Pritzker signed the Illinois budget into law and approved the new exchange wager tax, North Carolina lawmakers followed suit and approved a new prediction market tax of its own.

Gov. Josh Stein (D) signed North Carolina’s $34 billion budget into law on July 7, which included an increase to the state’s sports betting tax rate and a new prediction market tax. The approved and legalized budget included an increase to the state’s sports betting tax rate from 18% to 23%, while also imposing a new tax on Commodity Futures Trading Commission (CFTC) licensed prediction market operators.

The prediction market tax will go into effect in North Carolina on Jan. 1, 2027.

The document included a 6% trading fee tax for operators. The tax will be imposed on “the operator’s net trading fee revenue apportionable to the state.” The tax does not impose any license, registration, or other regulatory requirements or obligations for CFTC-licensed prediction market platforms to operate in the state.

The budget allows for sports event contracts to be traded in the state under a much less expensive rate than licensed sports betting operators. The budget also imposes no additional state regulations on CFTC-licensed prediction market operators.