Illinois tax review: How operators plan to offset potential losses from HB 1928
Leading market share operators FanDuel and DraftKings both chose to implement a $0.50 transaction fee for all wagers placed in Illinois as a result of the recently passed legislation.
Key Points
- BetMGM, Hard Rock Bet and Circa Sports will all implement minimum wager requirements for users of the respective sportsbooks
- House Bill 1928 will introduce a $0.25 per wager tax for the first 20 million bets accepted by a sportsbook in Illinois, increasing to $0.50 for all wagers placed thereafter
In May 2025, the Illinois General Assembly chose to amend the state’s Sports Wagering Act to implement a new $0.25 per wager tax for the first 20 million bets accepted by a sportsbook in Illinois, increasing to $0.50 for all wagers placed thereafter, which officially went into effect on July 1. The decision sparked instant reaction from operators and its respective shareholders, as DraftKings’ stock price fell by 6.15% over a five-day period following the decision, while Caesars’ and Bally’s stock prices dropped 8.69% and 13.24%, respectively, in the same period.
First response
As a result of the potential revenue losses, Flutter, the owner and operator of FanDuel, announced its intention to impose a $0.50 transaction fee on all bets placed in Illinois in June 2025. The company confirmed it would immediately remove the newly specified transaction fee should Illinois lawmakers choose to reverse the per wager tax at any point.
“It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth and maximize revenue for states over time. We are disappointed that the Illinois Transaction Fee will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state,” Flutter CEO Peter Jackson said.
“We also believe the introduction of the Illinois Transaction Fee will likely motivate some Illinois-based customers to bet with unregulated operators. These operators do not contribute tax revenue to the state, will not collect the newly announced transaction fee and do not offer the same levels of customer protection that regulated operators provide.”
Next in line
Fellow market share leader DraftKings followed suit, imposing a $0.50 transaction fee for all mobile and online sports wagers placed by users residing in the Prairie State.
“Illinois has been an important part of our growth, and we’re proud to have contributed meaningfully to the state through tax revenue, job creation and a sustained investment in responsible gaming tools and resources,” DraftKings Co-Founder and CEO Jason Robins said.
“We are disappointed that Illinois policymakers have chosen to more than triple our tax rate over the past two years, and we are very concerned about what this will do to the legal, regulated industry. Meanwhile, Illinois continues to fuel the rapidly growing illegal industry, which pays no taxes or fees and provides none of the consumer protections that regulated operators offer.”
Industry response
The two Goliaths were not alone in strategizing for potential losses in Illinois, as Fanatics Betting and Gaming chose to institute a $0.25 per bet transaction fee for all wagers placed within the state on July 3. Fanatics confirmed the decision reflects the “high cost” of operating throughout Illinois, and will officially begin charging users in the fall of 2025.
In lieu of a per wager transaction fee, BetMGM, Hard Rock Bet and Circa Sports will all be implementing minimum wager requirements for users of the respective sportsbooks, including $2 for Hard Rock’s betting platform, $2.50 for BetMGM users and $10 from Circa Sports.
“After thoughtful consideration, we believe the best course of action for a low-hold, high-volume sportsbook such as Circa Sports 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,” Circa Sports CEO Derek Stevens said.
“Beginning Monday, September 1, a $10 minimum wager will take effect, protecting the vast majority of bettors in Illinois. No one should have to pay a fee to make a wager.”
On August 14, ESPN Bet updated its Illinois House Rules to include a $1 minimum bet requirement for all users within the state, confirmed by operator Penn Entertainment. It remains to be seen what type of effect the new changes will have on sports betting in Illinois, as total handle for June 2025 was reported to be north of $640m. The Illinois Gaming Board has yet to report July results at the time of writing, but the first month of activity since the legislation went into effect will certainly capture all eyes of the sports betting industry.
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