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For the second year running, Illinois lawmakers have successfully raised the tax rate on sports betting. In the recent approval of the 2025 budget, legislators have introduced a new tax on every wager placed within the state.
The new $55.2bn budget was passed minutes before the close of the year’s legislative session on Saturday (May 31) and has been sent to Governor J.B. Pritzker’s desk for his signature. Illinois now has two tax systems in place, as sportsbooks already have to pay between 20% and 40% of their annual revenue to the state.
With the new tax measure taking effect later this year, betting operators will be required to pay $0.25 for each of the first 20,000 online bets placed annually. Once they exceed that threshold, the fee increases to $0.50 per bet. This change is projected to generate an additional $36 million in tax revenue for the state each year.
Governor J.B. Pritzker, who has always been a fan of squeezing money from the gambling industry, has already posted on social media that he’s eager to sign the new budget.
Tax Was Quick, No Time For Opponents
The new proposal was introduced and approved on the final day of the legislative session by House Democrats, with opponents having no time to fight back. This has drawn serious criticism from industry stakeholders, including the Sports Betting Alliance, which has called the tax “discriminatory, punitive, and constitutionally suspect.”
The Sports Betting Alliance is a trade group that features FanDuel, DraftKings, BetMGM, and Fanatics as members. In a statement, the group warned that this new tax would do nothing but push bettors to unregulated platforms. “With this change, lawmakers are essentially urging customers, and especially these small-dollar bettors, to switch to unsafe and unregulated sportsbooks who defy state consumer protections and generate zero taxes for state priorities,” the group said. “These illegal operators are the big winners from Saturday’s vote.”
Experts have also warned that this proposal might come at increased cost to bettors, as sportsbooks might be forced to implement higher minimum betting limits. We could also see less of promotional offers from sportsbooks and more people turning to sports contract platforms like Kalshi, which recently received a cease-and-desist letter from the Illinois regulator.
The group had previously campaigned against the tax, collecting 55,000 emails to send to lawmakers in Springfield. Despite their efforts, the state moved forward with the proposal, leaving sportsbooks to navigate an increasingly tax-hostile environment.
No Online Casino Yet
Some lawmakers, particularly Senator Cristina Castro and Representative Edgar Gonzalez, had advocated for legalizing online casinos as a solution to the state’s budget gaps instead of imposing another betting tax increase. However, their proposals once again failed to make headway.
Certain estimates revealed that if Senate Bill 1963 had been enacted and iGaming was legalized in the state, it could have generated an additional $450 million in annual revenue for the state in the first year. This is already 10 times more than what sports betting currently brings in. Even with the promise of a potential $800 million in annual revenue and backing from the state governor, SB 1963 still failed to advance past the committee stage.
Sweepstakes Escapes, Again
Last month, the Senate Gaming, Wagering, and Racing Committee had pushed for a ban on retail sweepstakes machines and online sweepstakes casinos through an amendment to the bill. However, the amendment was cut out before the final budget was approved.
Illinois was one of the 12 states to pursue a sweepstakes ban in 2025, but so far, Montana remains the only state in the country to have officially banned the vertical.
Source: Next.io
