The Sports Betting Alliance (SBA) claims Illinois' per-wager tax caused a 15% year-over-year drop in September online wagering in the Prairie State.
Key Takeaways
- The number of wagers placed online in Illinois fell by 5 million in September compared to the same month in 2024.
- It was the first full month of surcharges and betting minimums implemented by sportsbooks.
- The SBA says the per-wager tax is pushing bettors to the unregulated market.
The first full month of football is also the first full month of surcharges and betting minimums implemented by sports betting operators since the per-wager tax went into effect in July. There were 5 million fewer bets placed in September than in the same month in 2024, according to data from the Illinois Gaming Board.
“The Illinois Gaming Board data released today is astounding,” SBA of Illinois spokesperson Maura Possley said in a statement. “While legal markets all across the country are growing, the Illinois market is shrinking thanks to the state’s recent tax hike.”
The SBA, made up of sports betting operators DraftKings, FanDuel, BetMGM, Fanatics Sportsbook, and bet365, highlighted tax-change issues and potential consequences in the release.
Tax ramifications
Illinois is charging online sportsbooks 25 cents per wager on the first 20 million bets. After that, the state’s price increases to 50 cents per wager. Sports betting operators are putting that cost on the customer.
DraftKings and FanDuel, the two largest operators in the market, have both applied 50-cent surcharges. DraftKings does not apply it to parlays of $10 or more. Other sportsbooks, like BetMGM and Hard Rock Bet, force bettors to wager a certain amount. Circa Sports has the highest minimum at $10.
The SBA believes that is pushing bettors to unregulated sportsbooks that operate offshore or through unlicensed sweepstakes companies.
“Illinois sports fans are fleeing the legal betting market in favor of the cheaper illegal and unregulated options - and the regulated legal market is paying the price,” Possley said.
The organization noted that the Illinois attorney general was one of many who signed a letter in August that said unregulated gambling exposes residents to “fraudulent schemes and highly addictive gambling without any oversight or accountability.”
The SBA also included a statement from the Better Business Bureau that the “risky underbelly of pseudo-gambling, illegal gambling and scams” has affected consumers and compiled 10,000 complaints from 2022 through 2025.
'Warning sign'
Sportsbooks are preparing to feel another potential financial sting. Chicago mayor Brandon Johnson wants to raise $26 million through a proposed 10.25% tax rate on wagers placed in Chicago to help the city’s $16.6-billion budget.
The SBA says this will push even more Chicagoans to illegal, unregulated sportsbooks.
“This data is a warning sign for Chicago, Illinois, and other state policy makers that over-taxing legal betting will have profound negative ramifications for the sustainability of the legal market and future tax revenues for state coffers,” Possley said.
Illinois already has a progressive tax system, and combined with the per-wager tax, it’s one of the highest-taxed states for operators in the U.S. The per-wager tax alone generated $10.6 million in September, when online sportsbooks produced nearly $99 million in adjusted revenue.
