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Industry expert: More than doubling sports gambling tax will have negative impact


(The Center Square) – An industry expert says Gov. J.B. Pritzker’s budget proposal to increase the sports betting tax by 20% could cause ripple effects in the industry.

If approved by the legislature, the tax for sports book operators would go from 15% to 35%, one of the highest percentages in the country. If enacted, the higher tax would take effect July 1, the start of the new fiscal year. Pritzker’s office estimates it could generate $200 million in increased tax revenue.

Dan Holmes with the gambling information website PlayIllinois said a huge increase in the tax could possibly prompt some operators to scale back operations.

“There have been situations like in New York where Caesars and BetMGM both came out and said ‘the cost of acquiring customers is so high, we’re going to reduce our market spend,’” said Holmes.

New York has a 51% tax on mobile sports betting revenue.

Holmes said big operators like DraftKings and FanDuel should have no problems with the increased operational taxes, but may choose to offer less perks to Illinois sports bettors. But there is speculation that smaller sports books may suffer and close up shop in Illinois.

Illinois sports bettors wagered about $10 billion in 2023, placing the state third in the country behind New York and New Jersey. Operators set a monthly sports betting revenue record in December at more than $128 million.

The state collected just over $150 million in taxes from sports betting last year, a $32 million increase from 2022.

The Illinois Department of Human Services is recognizing March as Problem Gambling Awareness Month. If gambling has become a problem for you or someone you know, call 1-800-GAMBLER. Help is also available through the website