Maybe you’ve heard and maybe you haven’t, but Land of Lincoln lawmakers imposed a per-bet tax on online sportsbook operators that kicked in at the start of July, and some mobile bookmakers plan to pass the added costs on to Illinois bettors.
- Illinois introduced a new per-bet tax on online sportsbooks, charging 25 cents per bet up to 20 million bets and 50 cents afterward, prompting operators to find ways to offset the added cost.
- Many sportsbooks are passing costs to bettors through new transaction fees (e.g., DraftKings and FanDuel charging 50 cents a bet) or by increasing minimum bet amounts (e.g., BetRivers from 10 cents to $1).
- Policies vary by operator, giving Illinois bettors the chance to shop around for the lowest fees or minimums, especially during the upcoming football season when betting activity peaks.
The new per-bet tax is 25 cents for each of the first 20 million bets an Illinois sports betting site takes in any given year, and then 50 cents per wager after 20 million bets. With those added costs hanging over them, most of the state's online sportsbooks adopted measures to deal with the extra expenses.
In other words, Prairie State sports bettors may find themselves paying a “transaction fee” or make a bigger wager than usual to meet new minimum betting requirements sportsbooks put in place. Some bettors may have already noticed some changes.
Taxing times
In the meantime, football season is hurtling toward us all, the busy time for both books and bettors, especially in Illinois. Here, then, is what every online sportsbook in Illinois is doing in response to the new per-bet tax and what it might cost bettors:
- bet365: No announcement yet. The operator’s house rules currently state it has a 10-cent minimum for all bets.
- BetMGM: Minimum $2.50 bet size is in place. “BetMGM is a surcharge-free zone for now,” CEO Adam Greenblatt said recently.
- BetRivers: Minimum $1 bet (used to be 10 cents). However, its owner, Rush Street Interactive's CEO recently said it's “remaining flexible” heading into the NFL regular season. In other words, the sportsbook operator could change its approach.
- Caesars: No word yet. Caesars' minimum bet in Illinois is currently 10 cents.
- Circa: Nothing. Both a surcharge and minimum bet-free zone! "We don’t have any plans at the current moment," said Jeffrey Benson, Circa Sports' director of operations, in a statement to Covers. "We are still evaluating what, if anything, we’d be doing. It’s too early."
- DraftKings: Bettors will pay a 50-cent “transaction fee” on all online sports wagers starting Sept. 1.
- ESPN BET: Nothing announced as of yet. At the moment, though, ESN BET has a 10-cent minimum bet requirement in Illinois.
- Fanatics: Bettors will pay a 25-cent transaction fee for all wagers starting this fall.
- FanDuel: 50-cent transaction fee for all bets. (NOTE: DraftKings, Fanatics, and FanDuel all stated they'd remove their transaction fees for bettors if Illinois lawmakers remove the per-bet tax on operators. Don’t hold your breath, though; the state legislature adjourned until the fall.)
- Hard Rock Bet: $2 minimum bet is in place.
As you can see, not everyone is going the same route in trying to offset the the new per-bet tax's added costs. That presents Illinois bettors with an opportunity to shop around if they like, to find the book (and the potential added cost) that works best for them. It also offers operators a chance to differentiate themselves.
“We note that others have introduced a surcharge, passing on the full cost of that surcharge to players in the short term,” BetMGM’s Greenblatt said recently. “We feel like this is a relative competitive opportunity for BetMGM and other players that feel that that might be somewhat punitive. So, look, what happens in the future will depend on the financial impact of the approach we're taking at the moment. But we want, at least for now, BetMGM to be a surcharge-free zone.”
The Illinois Gaming Board also published several clarifications when it comes to the new per-bet tax and how it applies. Among other things, the regulator said the new per-wager tax will apply to bonus bets, and that parlays and round robins will count as a single bet.
According to the IGB, the per-bet tax will apply to "pushed" bets as well. Put differently, you could push on a bet and still lose 25 or 50 cents because of a transaction fee. Voided bets aren't subject to the tax.
"The per wager tax incurs once the customer places the wager," the IGB says. "Whether the wager wins, loses, pushes, or is cashed out early does not change the tax liability under the statute."
