The Sports Betting Alliance (SBA) attributes a second consecutive 15% year-over-year drop in Illinois sports betting to the Prairie State’s per-wager tax.
Key Takeaways
- The SBA also believes September’s 5 million wager decrease came from the tax surcharge.
- There were 6.4 million fewer bets placed in October 2025 than in October 2024.
- The SBA cites a national responsible gaming expert who says the tax is hurting smaller bettors and the regulated market.
The Illinois Gaming Board reported 6.4 million fewer bets were placed in October 2025 compared to the same month in 2024, which the SBA says “is a dramatic departure from trends in other states.”
The advocacy group that represents FanDuel, DraftKings, BetMGM, Fanatics Sportsbook, and bet365 says this decrease, combined with a 5 million wager drop in September 2025, confirms that a tax of online operators on every bet placed is hurting the state.
“The IGB’s recent data illustrates more alarming evidence that tax hikes are creating a lose-lose situation for fans, where they’re either being forced to pay higher fees or left to abandon the legal sports betting market,” the SBA said in a statement. “This is a warning sign, and with Chicago city leaders lumping even higher taxes on fans, Illinois lawmakers are putting at risk the very sturdy regulated market they’ve built since legalization.”
Chicago instituted a 10.25% tax on operators for bets placed there beginning Jan. 1, leading the SBA to file a lawsuit earlier this month against Illinois’ highly populated city.
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High rates
Illinois lawmakers instituted a 25-cent wager tax that went into effect in July. The rate goes up to 50 cents after the first 20 million bets. Every online sportsbook has passed the cost to customers in various ways, from issuing a surcharge on bets over a certain amount to forcing bettors to make a higher minimum wager.
This came after Illinois went to a progressive tax rate on operators in 2024. The starting tier is 20% for all operators and increases up to 40% for sportsbooks that generate over $200 million in adjusted gross revenue. Combining the two makes gives Illinois operators some of the most-taxed U.S. sportsbooks.
September was the first entire month of per-wager offsetting costs by the sportsbooks. The SBA called the month’s year-over-year betting decline “astounding” during a time when sports betting in other states is thriving.
Illinois produces one of the top three sports betting handles in the U.S. In October, the last reported month, operators generated $135 million in adjusted gross revenue from a record $1.6 billion in wagers. The state hauled in over $41 million in tax revenue for the month.
Challenging the framework
The SBA also recently cited a national responsible gaming expert, who told the advocacy group that the Prairie State’s tax hikes are undermining consumer protections.
“Illinois lawmakers should strive for a legal sports betting framework that encourages responsible play at comfortable stakes for the bettor,” Keith Whyte said. “But these taxes raise the price of participation, pushing customers to place higher bets that could be out of their comfort zone. I can envision situations where this required higher spending increases the chance of harm for those who might encounter problems - the exact opposite of what we should want from a legal, regulated market.”
The SBA and Whyte believe the offset costs that operators are being forced to charge customers to pay for the per-wager is forcing bettors to the illegal market, like bookies and offshore sportsbooks. Those illegal operators don’t adhere to the same consumer protections, state-producing revenue, and responsible gaming policies as Illinois' regulated sportsbooks, the SBA says.
