Key Moments:
- Illinois online sportsbooks paid $5.2 million in per-wager taxes in July, with DraftKings and FanDuel combining for nearly $4 million of that total.
- DraftKings and FanDuel together handled 15.8 million of the 20.7 million total digital wagers placed in July.
- Half of Illinois sportsbooks have begun passing the per-bet fee on to customers, while others raised minimum bets, in response to the new tax.
Tax Policy Drives Immediate Revenue and Operator Reactions
Illinois introduced a per-wager tax effective July 1, requiring licensed sportsbooks to pay $0.25 for every bet processed. The tax rate increases to $0.50 per bet once an operator exceeds 20 million wagers in a fiscal year. According to data from the Illinois Gaming Board (IGB), the policy generated $5.2 million in tax revenue during July. DraftKings and FanDuel, responsible for a combined 15.8 million of the 20.7 million digital bets that month, paid nearly $4 million under the new regime. With the football season approaching, both operators are expected to cross the 20 million-bet mark soon, triggering the higher tax bracket.
Sportsbooks Pass Costs to Consumers
As a result of the new tax, half of Illinois’ licensed sportsbooks have opted to impose a per-bet fee on customers, while the remainder have chosen to increase their minimum wager limits. DraftKings and FanDuel began applying surcharges on September 1. Citizens JMP analysts have observed that DraftKings’ fee has already produced the “desired outcome” for the company.
Other operators, such as BetMGM and Circa, raised their minimum bet amounts, with some reaching $10 per wager. In mid-July, BetMGM announced it would set a $2.50 minimum bet in Illinois starting July 16 for all types of wagers, including parlays, same-game parlays, straight bets, round robins, and live in-play wagers.
The IGB confirmed that even when these costs are shifted to patrons, taxes must still be paid on all surcharges collected. An IGB spokesperson told SBC Americas, “The Sports Wagering Act puts responsibility for the per-wager tax on the licensee. Sportsbooks are permitted to charge patrons whatever fees they wish, but all such fees are taxed as sports wagering receipts.”
After thoughtful consideration, we believe the best course of action for a low-hold, high-volume sportsbook such as @CircaSports is to raise the minimum wager in Illinois. We are reluctant to compromise our best-in-class betting splits or charge our customers a per-bet fee.… pic.twitter.com/hrg5xPHufq
— Derek Stevens (@DerekJStevens) August 15, 2025
Analysts See Significant Impact on Bettors and Industry
Industry experts caution that Illinois’ new tax model could set a nationwide precedent, breaking from the previous approach where leading operators absorbed increased taxes rather than passing them to customers.
“This is a distressingly simple model to copy,” longtime Nevada sportsbook director Robert Walker previously told SiGMA News. “And because of that, other states will almost certainly view it as a viable, if deeply flawed, template.” Illinois has already hiked its top tax tier from 15 percent to 40 percent, and the per-bet levy now piles additional pressure on operator margins.
The repercussions are particularly acute for recreational bettors. “For a $5 casual wager, that’s a 10 percent fee,” Walker said. “It punishes the smallest players—ironically, the exact demographic every operator covets for their high-margin potential.” He warned that by normalising surcharges, operators have effectively made it easier for lawmakers in other states to replicate the model.
Gaming attorney Jeff Ifrah had echoed those concerns, noting sportsbooks operate on razor-thin margins. “The per-bet fee is a response to increased burdens,” he said. “But it’s not ideal. Operators want to offer promotions and competitive odds to draw bettors into the legal market—not drive them out.”
There is also fear that steeper fees and reduced value could push bettors toward illegal channels. “These platforms don’t contribute to public health funding,” Keith Scott Whyte, founder of Safer Gambling Strategies LLC told SiGMA News. “If someone develops a gambling problem there, the cost falls entirely on the public health system.”
Walker concluded: “Exorbitant tax rates hurt the entire ecosystem. And if we keep escalating costs for the smallest, most vulnerable bettors, we’re accelerating the decline of the legal, regulated market.”
Illinois’ Regulatory Environment and Future Outlook
Illinois currently imposes one of the country’s steepest sports betting tax structures, with rates ranging from 20 percent to 40 percent of adjusted gross gaming revenue (AGR). DraftKings and FanDuel both posted AGR above $30 million in July, and the new per-wager tax is adding to their financial obligations.
This evolving landscape highlights increasing friction between state tax policies and sportsbook profitability, with industry experts warning that higher consumer costs are likely to persist.
Illinois Sportsbook Tax Data: July Snapshot
| Operator | Wagers Handled | Tax Paid |
|---|---|---|
| DraftKings & FanDuel | 15,800,000 | Nearly $4,000,000 |
| All Operators (Total) | 20,700,000 | $5,200,000 |
- Author
Daniel Williams
