fd-bears.jpg
Imagn Images

Illinois recently implemented a new sports betting tax structure that charges sportsbooks anywhere from 25 to 50 cents per wager placed. Sports betting giant FanDuel, which is a key player in Illinois sports betting, has countered with a change of its own, announcing that starting in September, it will add a 50-cent transaction fee on all sports bets taken in Illinois. 

Illinois lawmakers increased a number of taxes in the most recent legislative session, which notably included the charge to sportsbooks per wager. The new Illinois sports betting tax charges a sportsbook 25 centers per wager for the first 20 million bets it takes per year, and that fee then increases to 50 cents once it crosses 20 million wagers. This change came after Illinois lawmakers increased taxes on sportsbooks from 15% to a tiered system ranging from 20 to 40% last year. 

In 2024, Illinois took in more than 370 million sports bets. Notably, FanDuel and DraftKings combined for more than 300 million of those wagers. As such, they are set to be the most impacted by the state's latest tax change, and according to ESPN, DraftKings "anticipates taking action and expects to share more information soon." FanDuel's parent company, Flutter, also said that it will remove the 50-cent charge if Illinois lawmakers reverse course on this latest tax change. 

This fee from FanDuel, as well as the potential for similar measures from DraftKings, will likely impact small recreational bettors the most, such as those who place bets as small as $1 or so on parlays. As of now, there are no reported plans for FanDuel, DraftKings or other Illinois sportsbooks to increase minimum bet requirements. As for DraftKings, it has previously aimed to implement a surcharge to winning bets as recently as last year, but abandoned those plans after public backlash. 

Illinois is one of many states to have increased sports betting taxes, as Maryland increased its tax rate by 5%. While Ohio's governor tried to double the state's sports betting tax rate and didn't get it through the budgeting process, a state Senator proposed a 2% tax on all sports betting handle. Illinois has been the only state to launch a per-wager charge for sportsbooks that operate in the state, and it will be worth monitoring if other states follow suit and how sportsbooks continue to respond.