Illinois sports betting tax reform is triggering a chain reaction, with state lawmakers uniting against Chicago Mayor's proposed city-level surcharge on online betting amid a backdrop of increased state taxes leading to a decline in betting volume but a record total betting amount of $1.42 billion.
Background and Controversy of Tax Reform
Chicago Mayor Brandon Johnson plans to levy a 10.25% city tax on online betting in his $16.6 billion budget proposal, expected to increase revenue by $26 million. However, 30 state legislators have jointly warned city council members, arguing that excessive taxation could drive bettors to illegal offshore platforms. Indeed, this concern is valid. Dan Didich, chairman of the House Gaming Committee, stated, "Excessive taxes will force bettors to opt for more dangerous, unregulated offshore sites, directly leading to a loss of state tax revenue."
Impact of Tax Structure Adjustment
The sports betting tax in Illinois has been adjusted from a flat 15% to a tiered rate of 20%-40%, with an additional tax of $0.25-$0.50 per bet. In the first month of implementation in September, the statewide betting volume was 30.6 million bets, down approximately 5 million bets year-over-year, but the average bet amount increased by 28%, reaching a record total betting amount of $1.42 billion. Of the $28.7 million in tax revenue that month, $10.6 million came from the newly imposed per-bet tax—more case studies on gambling tax reform are available on the PASA official website.
National Trend of Tax Increases and Industry Response
Recently, several states have reevaluated their gambling tax rates, with Maryland increasing its rate from 15% to 20%, Ohio doubling it from 10% to 20%, and New Jersey raising it to 19.75%. Industry insiders predict more tax increase proposals will emerge in the 2026 legislative session. Peter Jackson, CEO of Flutter, stated that the taxes have "no impact" on FanDuel, but acknowledged that "the number of bets has decreased while the average bet amount has increased," a trend consistent with the situation in various states.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel:https://t.me/pasa_news
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