Illinois Operators Adjust to Increased Sports Betting Taxes with New Wager Policies

New Minimum Bets Set by Hard Rock Bet and BetMGM in Illinois

In response to Illinois’ hike in sports betting taxes, operators Hard Rock Bet and BetMGM have recently introduced minimum wager requirements for their customers. Hard Rock Bet requires a minimum bet of $2, while BetMGM has raised the bar slightly higher at $2.50 per bet. Hard Rock Bet was the first to initiate this policy, followed shortly by BetMGM’s announcement.

Impact of Illinois’ Revised Sports Betting Tax Structure

These adjustments follow Illinois’ implementation of a second tax on online sports betting within the past year. Under the new rules, operators are charged 25 cents for each wager up to 20 million bets, with the fee doubling to 50 cents for bets beyond that volume. Since legalizing sports betting in 2020, Illinois has seen its tax rate evolve from 15% initially to a tiered system ranging between 20% and 40% in recent years, now supplemented by this additional per-bet tax.

Other Operators Pass Costs to Bettors Through Surcharges

While some operators have set minimum wagers, others are managing the increased tax burden by imposing surcharges directly on bettors. FanDuel was the first to announce a 50-cent surcharge per bet starting September 1, citing the tax increase as the reason. Despite absorbing a jump from a 15% to a 40% tax on gross gaming revenue earlier this year, FanDuel has indicated that passing on some costs is necessary to maintain its profit margins.

Following FanDuel’s lead, DraftKings introduced a similar 50-cent surcharge. Unlike last year, when DraftKings faced significant backlash and subsequently retracted a comparable fee, the company has timed this new surcharge to coincide with broader industry shifts. Additionally, Fanatics has implemented a smaller 25-cent surcharge per bet, differentiating itself by charging less than its competitors to counterbalance the new tax.

Future Prospects of Illinois Gambling Industry

Despite the challenges posed by the increased taxes, Illinois’ gambling sector continues to show promise. Notably, the state’s Attorney General has indicated that Illinois is considering legalizing real money online casinos in the future. Advocates of this move highlight the potential benefits of expanding gambling options in the state amid growing public interest, signaling ongoing development and opportunity within the market.