When New York approved online sportsbooks, it set the tax rate for operators at 51 percent, the highest in the U.S. The rate didn’t keep sportsbooks from participating or making a ton of money, which brings up Illinois.
The administration of Gov. JB Pritzker wants to more than double the tax rate from 15 to 35 percent, a move that will bring in an additional $200 million to the state coffers.
FanDuel is not too happy about the push, and the sportsbook kingpin wants its users in Illinois to be unhappy too.
Here is the FanDuel pitch, issued as a notification to state bettors:
“STOP THE SPORTS BETTING TAX HIKE! We NEED your HELP! The Illinois legislature wants to MASSIVELY increase the tax rate on your favorite form of entertainment—placing bets on the teams, players, and games that you love! Use the link below to tell Governor Pritzker and your state representatives to say NO to a sports betting tax hike.”
Since Illinoiis sports betting debuted in March 2020, revenue has surpassed $2.5 billion. Those figures could take a hit with the tax rise, said FanDuel’s CEO Amy Howe. What’s more, it could drive patrons to black markets or even overseas.
“Our government affairs teams do a really good job of trying to educate the regulators on how to get that balance right, because at the end of the day, the revenue to the state is really important,” Howe told Legal Sports Report. “And it’s partly on us to make sure that we can work with state regulators to educate them on how to get that balance right.”
Pritzker first broached the subject in February. The $52.7 billion budget proposal built in the tax rate increase.
“I wish we had big surpluses to work with this year to take on every one of the very real challenges we face,” Pritzker said, per WTTW. “It’s important to note that while this budget is tight this year, our fiscal house is in order, and we are able to keep our commitments to the people of Illinois.”
Ohio doubled the tax rate on sports betting from 10 to 20 percent. New Jersey has proposed more than doubling its rate to 30 percent.
Illinois does not lack a successful market. Indeead, it ranks as among the strongest. Illinois produced a handle of $9.74 billion in 2022 with the state taking in almost $120 million.
Last year, revenue crossed $10 billion; $1 billion in handle in each of the last six months.
For the first two months of 2024, Illinois produced almost $2.3 billion in handle, generating $35 million in tax revenue.
