Illinois reported considerable monthly growth for its online sports betting market despite a decline in events to start the summer.
Licensed sportsbooks in Illinois reported a $824 million online handle in June, up from $647.6 million for the same month last year. As of August 2024, Illinois is home to eight licensed online operators. The results in June were led by professional sports, which saw bettors wager $815.3 million with online sportsbooks during the month. By comparison, bettors across Illinois dished out $642.2 million in June 2023 on online wagers for pro events.
Illinois’ substantial year-over-year growth in June resulted in monthly record revenue.
Operators in the Land of Lincoln generated $95 million in adjusted gross revenue from retail and online wagering in June, marking the highest monthly figure in state history. The results were a 73% uptick compared to the same month last year. Active rules in Illinois sees the state impose a 15% tax rate on operators but that will change next month.
Earlier this year, Gov. J.B. Pritzker approved an FY2025 budget plan that will see operators taxed on a sliding scale based on their adjusted gross revenue. The change, which was met with backlash by groups comprised of sportsbooks, is projected to generate an additional $200 million in annual revenue. Operators that report more than $200 million in adjusted gross revenue will be taxed at a 40% rate. That rate is the second-highest tax rate in America behind New York where regulators impose a 51% tax rate.
The minimum tax rate Illinois operators will see under the FY2025 budget plan is 20%. In June, Illinois state and local governments collected $14.2 million from sports betting taxes. To date, licensed sportsbooks in Illinois have generated more than $3 billion in revenue.
Illinois tax rate to further impact DraftKings customers
DraftKings has responded in a unique fashion to the tax rates in Illinois and other markets.
Last week, the Boston-based operator announced that it will be issuing a surcharge starting in January 2025 on every winning wager in markets that have multiple sportsbooks and a tax rate higher than 20%. In addition to Illinois and New York, the forthcoming surcharge from DraftKings will also impact customers in Pennsylvania and Vermont.
It has vowed not to adjust or decrease market and acquisition spending in those markets.
DraftKings top sportsbook in Illinois
DraftKings has taken a stance against tax rates as the top sportsbook in Illinois. In June, DraftKings reported a $322.8 million total handle that generated $38.6 million in revenue. By comparison, revenue in June 2023 reached $17.2 million with state tax at $2.5 million.
Rival FanDuel was close behind in revenue as it performed better in the state despite a significant discrepancy in handle. The Flutter Entertainment-owned brand posted a $280.3 million total handle in June and generated $36.4 million in revenue during the month. By comparison, FanDuel saw statewide revenue in June 2023 close at $21.5 million.
The operator saw taxes reach $5.4 million in June 2024, up from $3.2 million in June 2023.
Newcomers Fanatics and ESPN Bet are fighting an uphill battle for market share in Illinois.
Fanatics, which took over PointsBet’s operations in the state, reported a $41.5 million handle in June 2024 and $4.4 million in revenue. Last June, PointsBet generated $2.5 million in revenue. ESPN Bet, which launched last November, closed June 2024 with a $36.4 million handle that generated $3.5 million in revenue. Despite its recent launch in Illinois, ESPN Bet reported stronger revenue in June results than well-established Caesars. In June 2024, Caesars posted a $38 million handle and $1.8 million in revenue.
