After raising taxes on the sports betting industry in 2024 and 2025, Illinois legislators may now be having second thoughts.
State Rep. Daniel Didech (D) has introduced a bill scrapping the per-wager tax signed into law by Gov. JB Pritzker (D) in 2025. That added a 25-cent tax on wagers for an operator’s first 20 million bets, which rose to 50 cents per bet beyond that threshold.
The per-bet tax followed a tax increase in 2024 that instituted a progressive tax structure on operators up to 40%.
Following the per-wager tax hike, some sportsbooks passed the tax on to customers via transaction fees and others raised betting minimums.
The impact was felt immediately There have been 28 million fewer bets since the tax went into effect in September compared to the same time the previous year.
Illinois An Outlier
In December, handle dropped more than 25% year-over-year. Average betting amounts went up, from $39 to more than $50.
The declining numbers have made Illinois an outlier as the industry continues to grow.
“The state of Illinois is showing three consecutive months of 15% declines in the amount of bets,” Sports Betting Alliance (SBA) President Joe Maloney told local media. “That’s very, very telling, and it is something that is not happening anywhere else in the country that has online sports wagering.
“It’s no different than choosing which drugstore to conduct your business, which casual fast-food chain to conduct your business, or which grocery store to go to. When you have choice on a marketplace, you’re going to go where there is the best pricing.”
If approved, HB5143 would end the per-wager tax beginning July 1.
Legislators Ignored Warning From Industry
At the time of passage, operators warned of the consequences of passing the tax increase. Industry representatives said the per-bet tax would drive bettors to unregulated sites.
“It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth, and maximize revenue for states over time,” said Peter Jackson, CEO of Flutter Entertainment, parent company of FanDuel.
“We are disappointed that the Illinois transaction fee will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state.”
Additionally, Chicago recently added a tax of 10.25% on the industry, and the city’s Financial Future Task Force has recommended a 50-cent per-wager tax.
The SBA has sued the city to block the tax increase, while some legislators are pushing a bill to block the city from taxing the industry.
