A coalition of sportsbooks is pushing back on a potential tax rate increase in Illinois.
Gov. J.B. Pritzker proposed in his FY2025 budget a plan to increase the sports betting tax rate in Illinois from 15% to 35%. The change is projected to generate an additional $200 million in annual revenue. Pritzker’s plan, which is pending approval, has been met with backlash from the Sports Betting Alliance, a coalition of major operators. The group includes BetMGM, DraftKings, FanDuel, and Fanatics Sportsbook.
“The industry has exploded and companies like DraftKings and FanDuel have seen incredible profits,” said Pritzker’s office in a statement. “By raising the wagering tax to 35%, Illinois would still be a far cry from the highest rates in the country.”
In response to Pritzker’s pitch, the Sports Betting Alliance sent over 50,000 emails to Illinois residents asking them to protest against the proposal. The group is asking sports bettors across the state to reach out to state and local leaders to contest Pritzker’s budget.
Protecting players in Illinois
The Sports Betting Alliance has taken its stance to ensure players across Illinois are provided with a user-friendly experience. The coalition, which advocates for safe legal wagering nationwide, believes an increase in Illinois’ tax rate will cause licensed operators in the state to weaken promotional offers while providing less favorable odds. The Sports Betting Alliance also believes a tax hike will lead to an increase in illegal offshore gambling.
If Pritzker’s budget plan is approved, Illinois will have one of the highest tax rates in the country despite the governor’s claim. New York, the largest online gaming market in America, levies the highest tax rate on mobile sports betting in the country at 51%.
Since 2022, New York has collected more than $1.6 billion in tax revenue from wagering.
Illinois is not alone
Illinois joins New Jersey as states with proposed sports betting tax rate increases.
Last month, Senate No. 3064 was introduced in New Jersey by Sen. John F. McKeon. The measure aims to increase the state’s iGaming and sports betting tax rate on gross gaming revenue to 30%. New Jersey’s active gaming legislation calls for a 13% tax rate on sports betting revenue while iGaming operators are taxed at a 15% rate. Last year, sports betting tax revenue in the Garden State reached $289.8 million behind the 13% tax rate. On the other hand, state iGaming revenue in 2023 closed at $288.4 million with the 15% rate.
