Two sports betting operators made a unique move to deal with the recent tax increases in Illinois.
Illinois betting sites are responding differently to the new tax laws. BetMGM and Hard Rock Bet announced this week that bettors using its Illinois online sports betting platform will face higher minimum wagers.
BetMGM bumped the minimum bet up to $2.50 while Hard Rock set the limit at $2. The state’s new tax increase went into effect on July 1. It taxes online sportsbook operators 25 cents on each wager. Then, the state taxes each wager after the first 20 million at 50 cents per bet.
The per-bet fee is on top of Illinois’ tax rate on the industry. The state also raised those rates from 15% to a graduated range from 20% to 40%.
Minimum Bets Used Instead Of Fees
BetMGM and Hard Rock are using a different method from the two market leaders to deal with the Illinois tax.
FanDuel and DraftKings announced that they will implement a 50-cent transaction fee for all bets placed on their Illinois platforms. The fee is supposed to offset the effects of the levy and will kick in on Sept. 1 and apply to all bets, win or lose.
“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.”
Fanatics also recently announced that the company would charge a 25-cent surcharge on all bets in the state. So far, Caesars, bet365, BetRivers, Circa and ESPN Bet have not announced any other charges on bets or minimum wager increases.
In related news, online gaming giant Flutter Entertainment recently announced the acquisition of the remaining 5% of FanDuel owned by Boyd Gaming for $1.755 billion.
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