Illinois’ Per-Wager Tax Is Reshaping the State’s Betting Landscape
Illinois Imposes New Per-Wager Tax on Sports Betting
Illinois has introduced a new tax on sports betting that is transforming how residents place their wagers. Approved in June, this tax imposes a fee of $0.25 on each of the first 20 million online bets placed during a fiscal year, increasing to $0.50 for every bet beyond that threshold. Many sportsbooks have expressed concerns, describing this tax as a harsh measure that could negatively impact consumers in the long term.
Impact on Casual Bettors and Operator Responses
Sports betting operators in Illinois have adapted quickly to the tax changes. For instance, Caesars began charging $0.25 per wager during the NFL season, affecting bettors who prefer to spread multiple low-stakes bets over a weekend. While parlays are counted as a single wager, those placing numerous small bets may face significant additional fees.
Fanatics also implemented a $0.25 fee, whereas FanDuel and DraftKings, which handle the majority of bets in the state, opted for a higher $0.50 fee. This decision aligns with the volume of bets they process but also makes them particularly exposed to the tax’s impact.
Other operators took a different route by increasing minimum bet amounts instead of charging fees. BetMGM, BetRivers, ESPN BET, and Hard Rock Bet raised minimum bets to reduce the burden on casual players, though this move still restricts those who enjoy placing low-cost wagers. Meanwhile, Circa, catering to more high-stakes gamblers, set a $10 minimum bet, effectively removing small bets from its Illinois offerings.
The Tax Effect: Possible Shift Toward Offshore Betting
Casual bettors have been hit hardest by the tax adjustments. Increasing minimum bet sizes eliminates the possibility of placing small parlays just for entertainment. Where fees have been introduced, the cost of placing several small bets can surpass the bets themselves. For example, a bettor wagering ten 50-cent parlays on DraftKings during an NFL Sunday might pay $5 in fees before any winnings or losses.
Due to these changes, Illinois has become one of the priciest states for low-stakes gambling, as operators pass the tax cost onto bettors. While some sportsbooks might gain an advantage by maintaining lower fees, industry experts caution that many players may turn to offshore betting platforms. These offshore sites avoid such taxes, have no minimum bet requirements, and often attract players with lucrative promotions.
The Sports Betting Alliance highlights that a tax designed to target large operators is unintentionally penalizing recreational bettors. Online discussions are seeing an uptick in complaints from small-stakes players who threaten to stop betting or travel to neighboring states like Indiana to avoid the added costs.
