More States Respond To Illinois Sports Betting Tax

July 1 — that’s the day that the new Illinois sports betting tax hit the market.

This tax, a first of its kind, has became a talking point acorss the legal sports betting market, well beyond Illinois. Here’s how it works (in case you’ve been living under a rock): sportsbooks will be charged 25 cents for every wager placed up to the first 20 million bets in a calendar year. Once they cross that threshold, the fee doubles to 50 cents per bet. It might seem like a rounding error, but it easily adds up to millions of dollars of new fees.

You might think that’s chump change to the top mobile betting apps, but you’d be mistaken. Sports betting is not a high-margin business. Most sportsbooks are happy with a 10-percent hold on bets. Now factor in marketing costs, this new fee, plus the regular taxes they owe to Illinois, and they’re getting squeezed even more.

And remember, last year, Illinois scrapped its flat 15 percent tax on sports betting revenue and replaced it with a tiered system that climbs as high as 40 percent for the top sportsbooks. That change alone catapulted Illinois into the ranks of the highest-tax states for sports betting, even before the new per-bet fee was introduced. For operators at the top, it’s now one of the most expensive places in the country to do business in.

As you can imagine, Illinois sportsbooks are not happy in the slightest. We’re now starting to see them come out with counterpolicies to minimize the effects. In this article, we’re going to lay out what they’ve done (so far). We expect more to respond, so this article could look very different a few months from now.

BetMGM, Hard Rock Bet Fire Back

BetMGM and Hard Rock Bet are on the offensive in Illinois. Both are now enforcing minimum wager thresholds for all bets placed in Illinois. Starting now, BetMGM customers must stake at least $2.50 on every wager — whether it’s a straight bet, parlay, prop, whatever it is. The company notified users of the change earlier in July so no more $1 hail-Mary parlays. Womp womp wom.

Hard Rock Bet followed suit with a slightly lower $2 minimum, but the same rule applies across all bet types. They’re a relatively new entrant into the Illinois sportsbooks betting market, but that didn’t stop them from fighting back.

Obviously, these policies are designed to offset the per-bet fee. If you’re getting charged 25–50 cents per wager, you can’t afford a flood of $1 bets eating into already thin margins. We would expect most sportsbooks to have a similar policy in the state — it doesn’t make sense NOT to do this.

Top Sportsbooks Took A Different Approach

BetMGM and Hard Rock Bet are solid operators, but make no mistake about it, they’re in that second tier of betting apps. In tier 1? The undisputed leaders, FanDuel and DraftKings. Both are being more aggressive to combat Illinois’ new taxes.

FanDuel was the first to strike. Instead of setting a minimum wager, FanDuel announced a flat $0.50 fee per bet in Illinois, effective September 1. DraftKings followed shortly after with the same move. It’s no coincidence — these are the only two operators in Illinois that actually clear the 20 million bets-per-year threshold the state set. That means they’re the ones paying the full weight of the new per-bet tax.

Both companies made it clear: this isn’t a cash grab. It’s a direct response to the one-two punch of Illinois tax hikes in back-to-back years. First, the revenue-based jump to 40 percent — which nearly tripled their tax liability — and now the per-bet fee. In statements, both said they’ll drop the surcharge if the state reverses course (though that seems unlikely at this point).

Fanatics Sportsbook followed suit too. They’re rolling out a $0.25 per-bet fee for Illinois customers — half of what FanDuel and DraftKings are charging. Why the difference? Most likely because Fanatics doesn’t expect to crack the 20 million bet threshold. It’s a preemptive move, not a defensive one.

Will There Be More Fallout?

As of this writing, the remaining sportsbook operators in Illinois — Caesars, bet365, BetRivers, Circa, and ESPN Bet — haven’t announced any minimum bets or per-wager fees yet. That said, we’d bet that doesn’t last long. Odds are they’re watching how the first wave of responses plays out since we’re barely in month 1 anyway. Expect them to adopt similar tactics once it’s crystal clear on what’s more effective: wager minimums or surcharges per bet.

What happens next comes down to a balancing act: operators trying to protect profitability, bettors pushing back against rising costs, and regulators watching the impact on the legal market. Illinois has already set a new bar for aggressive taxation. If more sportsbooks start quietly passing fees on, the average bettor could wake up to a fundamentally different wagering landscape — not just in this state, but across the country.

Ultimately, Illinois’s experiment isn’t just changing how operators react — it’s reshaping the entire betting ecosystem. And for everyone involved, the fallout is just getting started.