Illinois Lawmakers Move to Revoke New Sports Betting Tax Amid Declining Bets

Concerns Arise After Illinois Introduces New Betting Tax

Illinois legislators are considering repealing a recently implemented sports betting tax following a noticeable drop in wagering activity. Data from recent months indicate that concerns raised by gambling operators about the negative impact of the tax may be justified.

Initial Opposition from Betting Operators

In September, the state of Illinois brought in a new tax policy requiring sportsbooks to pay an additional per-bet fee. This included a charge of $0.25 for each of the first 20 million bets placed and $0.50 for every wager beyond that threshold.

To manage this cost increase, many sportsbooks passed on these fees to customers via surcharges per bet, a move that many bettors found unfavorable.

This new tax was introduced just a year after Illinois shifted from a flat 15% tax rate to a tiered tax system, adding complexity to the tax structure.

Industry stakeholders had initially voiced strong opposition, warning the higher taxes could reduce betting volumes, cause financial losses, and drive gamblers to illegal markets. Recent trends seem to support these concerns, prompting lawmakers to reassess the tax’s viability.

Legislative Efforts to Repeal Additional Taxation

Representative Daniel Didech has proposed House Bill 5143, aiming to eliminate the new per-bet fees and restore the previous tax structure. He argues the extra charges are detrimental to the health of the sports betting industry in Illinois.

Reports from the Illinois Gaming Board reveal a substantial decline in the number of bets made following the tax’s introduction. While the overall amount of money wagered increased slightly during September to November, the number of individual bets fell significantly, indicating bettors are placing fewer but larger bets. December saw reductions in both betting volume and total wagers.

Altogether, Illinois experienced nearly 30 million fewer bets within a four-month period.

In addition to revoking the per-bet tax, Didech has introduced House Bill 4171, which would prevent local governments from levying additional taxes on sports betting. This comes after Chicago approved a 10.25% city tax on top of existing state-imposed taxes.