SBA Proactively Engages in Opposing Illinois Sports Betting Tax Rate Hike, as Voting Deadline Approaches

The Sports Betting Alliance (SBA), an organization of legal sportsbook operators, including BetMGM, DraftKings, FanDuel, and Fanatics Sportsbook, is proactively engaging in opposing a potential gambling tax rate hike in Illinois.

Back in February, Governor Jay Robert Pritzker proposed an increase in the sports betting tax rate from 15% to 35% in his FY2025 budget. According to estimations, it would generate an extra $200 million in annual revenue for the state.

Subsequently, the sports betting companies, have been urging online bettors to oppose the latest budget proposal of the governor. According to reports, they have already sent more than 50,000 emails to Illinois residents asking them to pitch in the protests.

Pritzker’s office released a statement arguing that the sports betting industry is thriving and “companies like DraftKings and FanDuel have seen incredible profits”. However, the more than two-fold rise “would still be a far cry from the highest rates in the country,” the statement added.

SBA’s ‘No New Taxes’ Online Form Aims to “Protect Legal Sports Betting in Illinois”

The SBA has designed a “No New Taxes” online form aiming to protect the legal sports betting industry in Illinois. Available on the coalition’s official website, the form can be used by Illinois residents to send a personal message to the governor and their representatives.

As the alliance explained, the 133% tax increase on sports betting in Illinois would negatively affect not only bettors, but also the share of the illegal offshore sports betting market.

As far as bettors are concerned, they will have access to fewer promotional offers and bonuses, which will impact the way they participate in sports betting. Furthermore, the odds will be not as competitive as they currently are, as operators will be struggling to keep them the same given the increased taxes.

Instead of increasing the tax rate on online sportsbooks, SBA’s spokesperson, Nathan Click, has suggested legalizing iGaming in the state as a source of more tax revenue.

As the No-Tax-Hike form suggests, bettors are encouraged to take action immediately, as state legislators have until the end of the current month to vote on the proposal.

If the governor’s plan is endorsed, Illinois will trail behind New York in terms of the highest tax rates levied on online sports betting operators across all states. Legal operators in New York are subjected to a tax rate of 51%. Although Pennsylvania’s sportsbook operators are charged with a 36% tax rate, they are allowed to deduct promotional credit spend from gross gaming revenue, thus reducing the tax burden.

If approved, the tax rate increase will come into force as of July 1. The current 15% tax rate on online sportsbooks has generated revenue of approximately $161 million in 2023.