Illinois Considering Proposal for Massive Hike to Sports Betting Operator Tax Rates

Sportsbooks in the Land of Lincoln might be taking a significant hit to their profits next year.

Illinois Governor J.B. Pritzker recently proposed a 2025 budget plan that would more than double the current tax rate for sports betting operators. They currently tax their profits at 15%, but the new proposal would raise that to 35%. The massive hike would result in millions more in tax revenue for a state with the fourth-largest handle in the US. 

Proponents of the hike believe it is overdue, given that the sports betting market has continued to outperform expectations.

“From Day One, Gov. Pritzker has taken action to ensure corporations are paying their fair share,” Press Secretary Alex Gough said of the proposal. “Since the legalization of sports betting in Illinois, gaming companies have enjoyed one of the lowest sports wagering tax rates in the nation. In that time, the sports betting industry has exploded, and corporations are raking in huge profits.”

While the hike has strong support, many fear it would negatively impact bettors. An increased tax rate would lead to sportsbooks looking to make up for the lost revenue. One option they would have is to limit promos and water down their odds. That would lead to less money in the pockets of Illinois bettors and potentially slow down the red-hot market.

Illinois’ 15% tax rate is the ninth-highest among all US states.

Illinois Following Ohio’s Lead on Raising Tax

Proponents of the Illinois tax rate have pointed to Ohio as an example. The Buckeye State doubled its tax rate over the summer, less than one year after sports betting went live. They saw revenue numbers that far outperformed expectations and responded quickly to compensate.

While there were concerns over how the hike would affect the sports betting market, the state has yet to see any come to fruition. Odds and bonuses have remained competitive, and the state has seen a big jump in tax revenue, setting a record high with over $22 million in January.

While the move was similar to the one proposed in Illinois, Ohio rates went from 10% to 20%. Illinois is a larger market, but this hike would be far more. If it passes, the response from operators in the state will be watched closely as other states consider similar measures.