The fallout from Illinois’ sports betting tax has officially begun.
Flutter Entertainment-owned FanDuel Sportsbook has announced a new $0.50 surcharge on all wagers placed by bettors in the Land of Lincoln. The operator did not mince words when announcing the new surcharge, blaming the need to make up for lost revenue that will be lost under the state’s new “per bet” tax.
“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,” a statement from Flutter Entertainment CEO Peter Jackson read.
The new “per bet” tax will require all online sportsbooks to pay a 25%-50% tax on each wager they accept, depending on the total amount of bets.
Once both chambers approved the tax last week, the Sports Betting Alliance immediately responded by accusing the state of discriminating against the industry. The group, which includes FanDuel Sportsbook, pointed to Illinois raising its flat tax rate in 2024, which already had hit operators hard.
The SBA warned that sportsbooks would need to pass the extra cost of the tax onto users, which is what the FanDuel surcharge is meant to do.
A press release from the company confirmed that the surcharge would be reversed if Illinois lawmakers eliminated the new tax.
Will Other Sportsbooks Follow?
FanDuel is the first online sportsbook to take action against the new Illinois tax, but it likely won’t be the only one. Rumors suggest fellow industry-leader DraftKings will soon follow suit. Those two operators account for the vast majority of the market share in the state, meaning many bettors will be affected.
The question is which, if any, operators will follow DraftKings and FanDuel. While the SBA is intended to provide a unified front for sportsbooks, smaller operators will have the opportunity to capture a portion of the user base of the duo. This could help boost revenue and possibly help save some that are struggling to compete.
How many sportsbooks follow the lead of the industry leaders
