New Tax Structure Alters Online Wagering Costs
Illinois lawmakers have approved a new state budget that introduces a tax hike on mobile sports betting, a move that is expected to impact operators and bettors alike. Under the revised structure:
- A 25-cent tax per wager will apply to the first 20 million online sports bets placed annually.
- After surpassing 20 million wagers, the tax will increase to 50 cents per bet.
The measure has drawn criticism from industry stakeholders, with concerns about its effect on the state’s regulated sports betting market.
Sports Betting Alliance Condemns Decision
The Sports Betting Alliance issued a sharp rebuke following the tax hike announcement, calling it a crippling financial burden on legal sportsbooks and their customers.
“For the second consecutive year, the Illinois legislature chose to balance its budget with a punitive tax on legal online sports betting operators—this time with no warning and no regard for its devastating impact on the market,” the statement reads.
The Alliance warns that small recreational bettors—many placing low-dollar wagers—will bear the brunt of the tax, with effective rates reaching 25% to 50% of handle on these bets. The group also highlighted that Illinois residents voiced their opposition through 76,000 emails and tweets, urging legislators to reconsider the proposal.
Concerns Over Market Stability & Unregulated Operators
Industry experts fear that the tax hike will drive bettors toward offshore and unregulated sportsbooks, which operate without state consumer protections and generate no revenue for Illinois priorities.
“Lawmakers are pushing customers toward illegal operators, making them the big winners from Saturday’s vote,” the statement warns.
Additionally, the Sports Betting Alliance criticized legislators for ignoring the $1 billion in potential revenue that a regulated iGaming market could bring to Illinois, while allowing unregulated online gambling to thrive.
What’s Next for Illinois Sports Betting?
Despite the setback, industry leaders vow to continue challenging the tax hike both in Illinois and in other states considering similar legislation.
“This is not the end of this conversation. We will fight this discriminatory tax alongside our customers—now and in any state considering these harmful tax policies,” the Alliance concluded.
