Sportsbook operators in Illinois tax rate has more than doubled for some companies

Post published:July 2, 2024
Post category:News

Sportsbook operators in Illinois have been paying a 15% tax since the state legalized sports betting in 2019, but starting Monday, that tax rate has more than doubled for some companies.

Illinois’ 2025 state budget includes a new, progressive tax rate for licensed sportsbooks that’s based on adjusted gross revenues. That means sportsbook operators will pay anywhere from 20% – 40% in taxes, which makes Illinois’ rate the second-highest in the nation.

The new tax rate is expected to bring in over $200 million in additional revenues for the state.

In 2023, Illinois earned just over $1.5 billion in tax revenue from online sports betting operations and casinos. By comparison, the state lottery, which started operating in 1974, had revenue of about $2.32 billion in 2023.

All sports wagering revenue in the U.S. jumped 22% to $3.33 billion in the first quarter of 2024, according to the American Gaming Association. That growth piqued the interest of state governments all over the country.

New York has implemented a maximum 51% tax rate, and New Jersey is considering doubling its tax rate to 30%. A proposal was on the table in Massachusetts to move the state’s tax rate from 20% to 51%, though that measure failed in May.

A 2018 decision from the U.S. Supreme Court struck down a federal law prohibiting sports gambling. Prior to that, Nevada was the only state where sports betting had been legal. Now, 30 states and Washington D.C. allow online sportsbooks, according to the American Gaming Association. For investors, FanDuel’s owner Flutter Entertainment is the dominant company, with a market value of more than $33 billion, while DraftKings commands a market value of about $20 billion.

Investors have taken notice of the growth. DraftKings stock price more than tripled in 2023 as its revenue surged more than 60%. It’s expected to incur a slight loss in 2024 but finally post an annual profit in 2025 as revenue continues growing. Many other online sports gambling operations have helped bolster revenue for broader gambling-focused companies, including MGM Resorts with BetMGM and Penn Entertainment, which partners with Disney for ESPN Bet.

The Associated Press contributed to this report.

Source: WBBM NEWSRADIO

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