(ADDS INFORMATION, SBA STATEMENT)
Gov. JB Pritzker called to more than double the Illinois sports betting tax rate to 35% as part of his $52.7 billion Fiscal Year 2025 budget presented to the public Wednesday.
Though Pritzker did not reference sports betting at any point during his speech to state legislators, a look at the FY 2025 budget released in conjunction with his address showed a projected tax revenue increase of $200 million at the 35% rate compared to the current 15% from FY2024, which began last July 1. The state’s 15% tax rate does not include a 2% tax Cook County levies on revenue from wagers made within its limits.
“Sports betting companies have seen exponential growth in recent years and are immensely profitable despite tax rates,” said a spokeswoman from the Governor’s Office in an e-mail to Sports Handle. “This increase will help fund Governor Pritzker’s commitment to ing working families while putting us in line with rates from many other states.”
If enacted, the higher tax would take effect July 1, the start of the new fiscal year. Pritzker, suspending the in-person registration provision of the Sports Wagering Act via Executive Order.
That helped quickly elevate Illinois into a top-three market nationally behind only $128.4 million in December. The state collected $150.3 million in taxes from sports betting in 2023, up nearly $32 million from 2022 as the $1 billion in adjusted gross revenue was a 26.1% year-over-year increase.
The 35% state tax rate would rank third nationally in states where sports betting is not lottery-run. New York has a 51% tax on mobile betting revenue while Pennsylvania has a 36% tax on all operator revenue. All but 2% of that tax goes to Keystone State coffers.
| Month | Adjusted Gross Revenue | 15% Tax Rate (Current) | 20% Tax Rate | 25% Tax Rate | 30% Tax Rate | 35% Tax Rate (Proposed) |
|---|---|---|---|---|---|---|
| Jul-23 | $60,411,925 | $9,061,789 | $12,082,385 | $15,102,981 | $18,123,578 | $21,144,174 |
| Aug-23 | $46,939,344 | $7,040,902 | $9,387,869 | $11,734,836 | $14,081,803 | $16,428,770 |
| Sep-23 | $86,222,260 | $12,933,340 | $17,244,452 | $21,555,565 | $25,866,678 | $30,177,791 |
| Oct-23 | $112,740,764 | $16,911,115 | $22,548,153 | $28,185,191 | $33,822,229 | $39,459,267 |
| Nov-23 | $72,704,587 | $10,905,688 | $14,540,917 | $18,176,147 | $21,811,376 | $25,446,605 |
| Dec-23 | $128,430,319 | $19,264,548 | $25,686,064 | $32,107,580 | $38,529,096 | $44,950,612 |
| TOTALS | $507,449,199 | $76,117,382 | $101,489,840 | $126,862,300 | $152,234,760 | $177,607,219 |
| Difference vs. 15% | $0 | $25,372,458 | $50,744,918 | $76,117,378 | $101,489,837 |
Should Pritzker enact the increase, he would be the second governor to raise the state tax rate on sports betting in a year. successfully doubled his state’s tax rate to 20% effective last July, though some felt his decision was partly in response due to public irritation at the relentless barrage of advertising on television and radio.
Potential impact on sports betting in Illinois 49d3z
Illinois can be considered a mature market with 11 retail sportsbooks and eight mobile operators. approved for both mobile and retail wagering last July.
Pre-existing casinos in Metropolis and Quad Cities launched in-person betting late last year, and Hawthorne Race Course has been operating retail sports betting at its south suburban Chicago track and three off-track betting locations in the Chicagoland area as allowed by the 2019 law.
In addition to sports betting licenses tethered to new casino licensees, Illinois still has three online-only licenses for prospective applicants — thought they come with an arguably prohibitive $20 million price tag. The Illinois Gaming Board has conducted two unsuccessful rounds of bidding for one of those licenses, with Betway most recently withdrawing from the process last October after the state agency had moved them forward as a potential finalist.
Could internet casino gaming come to the rescue? 4j1t56
Illinois generated more than $1.3 billion in state taxes in the 2023 calendar year, with 64% — $836.5 million — coming from taxes on video gaming terminals (VGTs). State legislators have filed bills to legalize internet casino gaming for this year’s General Assembly, but it is uncertain how much traction they will gain in Springfield given VGTs enjoy the of bars, taverns, and the service industry throughout the state.
“Legalizing iGaming in Illinois would create much more revenue than raising sports betting taxes, and all without harming the health of the legal sports betting market and casinos,” wrote Sports Betting Alliance spokesperson Nathan Click in a statement e-mailed to Sports Handle. “IGaming would create $775 million each year in ongoing new revenue for Illinois — more than triple the amount of this proposed tax increase ($230 million a year).
“Meanwhile, raising taxes on sports betting will allow illegal offshore sports operators to provide better odds and a competitive advantage over law-abiding sports books, crowd out smaller, startup and minority owned operators and their business partners, and threaten the long-term health and tax revenue generated by the legal market.”
