Caesars Sportsbook is the latest operator to add a new wager tax in Illinois.
Starting Sept. 1, the company’s online sportsbook platform in the Land of Lincoln will implement a 25-cent transaction fee on every wager due to the state enforcing a new tax rule. The new tax requirement charges licensed online operators in Illinois at least 25 cents per wager as part of a new fiscal budget. The per-wager tax increases to 50 cents after the first 20 million bets in a year. Caesars will be the fourth operator in Illinois to impose a fee.
“This will be shown during bet placement and indicated in the bet slip and can also be found in your bet and transaction history,” said Caesars in a letter to Illinois customers. “The change will apply to all cash bet types and include profit boost wagers. . .”
Caesars also made the point to notify customers that bonus bets and bets placed through its reward credit program will be excluded from the operator’s new transaction fee.
As a result of the new tax requirement in Illinois only applying to online wagers placed throughout the state, Caesars’ retail operations are not impacted by the transaction fee.
The gaming and entertainment giant operates three retail sportsbooks at Grand Victoria Casino Elgin, Harrah’s Joliet Hotel & Casino and Harrah’s Metropolis Hotel & Casino.
Caesars adds to new transaction fees in Illinois
Caesars joins a DraftKings, Fanatics, and FanDuel as operators adding transaction fees.
DraftKings and FanDuel are responding to the per-wager tax in Illinois by implementing a 50-cent transaction fee on all online wagers placed with the operators starting Sept. 1.
FanDuel was the first operator to make the decision with DraftKings shortly after. Meanwhile, Fanatics is executing the same plan as Caesars with a 25-cent surcharge.
Illinois regulator to tax surcharges?
In addition to a new per-wager tax, the Illinois Gaming Board (IGB) will be imposing a tax on the surcharge operators impose on customers, doubling the tax on online bets for Caesars, DraftKings, Fanatics and FanDuel.
“Illinois law does not prohibit operators from implementing fees related to the placement of online sports wagers,” said the IGB in a letter sent to state operators last month. “However, doing so will impact adjusted gross sports wagering receipts.”
The IGB’s tax on surcharges will be treated as handle resulting in their ability to be taxed, according to communications from the regulator. With that in mind, economically, a surcharge equivalent to the obligation an operator has to the state is not going to cover the cost of the surcharge itself and will create additional tax obligations.
Group of Illinois sportsbooks imposes new bet minimums
Another group of licensed operators in Illinois is responding to the state’s tax requirement by implementing new minimum wager amounts due to the potential impact on profits.
BetMGM, BetRivers, Circa Sports, ESPN Bet and Hard Rock have all revised their house rules to include new bet minimums due to the changes in the Land of Lincoln.
Both ESPN Bet and BetRivers announced plans to require customers to place at least a $1 wager on online bets in Illinois. ESPN Bet and BetRivers previously required users to place at least a 10-cent wager in the state, but that will change next month.
A BetMGM spokesperson confirmed to SBC Americas in July that the operator has a $2.50 minimum bet amount in Illinois while Hard Rock requires users to wager at least $2.
Circa Sports is taking a different approach by imposing a $10 minimum bet amount in Illinois due to being a “low-hold, high-volume sportsbook,” per CEO Derek Stevens.
British operator bet365 is the only operator in Illinois yet to respond to the new tax rule.
Last year’s tax adjustment on sports betting in Illinois
A new per-wager tax requirement in Illinois follows a major tax adjustment in 2024.
That year, Illinois Gov. J.B. Pritzker signed a budget taxing online sports betting operators on a sliding scale based on adjusted gross revenue. The measure mandates that operators in the state that generate over $200 million in annual revenue be taxed at a 40% rate.
Operators under that threshold for revenue are taxed at a 20% rate. Before Pritzker approved the budget, Illinois taxed online sportsbooks at a flat 15% rate.
