Fervent Supporters Opt for Illinois Tax Hike, Yet Lag Behind Competitors in Amount
As of July 1, 2025, a new state tax on sports bets has come into effect in Illinois, with operators in the state's online sports wagering market feeling the impact. In response, some operators have implemented surcharges or minimum bet requirements to offset these costs.
Surcharges and Minimum Bets by Operator
Fanatics Sportsbook, a newcomer to the Illinois market having debuted in April 2024, charges a flat $0.25 fee on every bet starting this fall. The aim is to keep below 20 million bets to avoid the higher $0.50 rate. This fee increases the cost of a $5 bet to $5.25, making it the lowest surcharge among operators.
DraftKings and FanDuel, on the other hand, face the same tax but tend to exceed the 20 million bets threshold, incurring the higher $0.50 per bet fee. They have responded with higher minimum bet amounts and surcharges. For example, BetMGM requires a $2.50 minimum wager, while Hard Rock Bet requires a $2 minimum.
BetRivers, another operator, has recently raised its minimum bet to $1, part of a broader industry response to the tax hike.
Comparing Operator Surcharges
| Operator | Surcharge/Minimum Bet | Tax Rate Application | |----------------|--------------------------------|-------------------------------------------| | Fanatics | $0.25 flat fee per bet | Expects to remain under 20M bets (25¢ fee)| | DraftKings | Higher fees, $0.50 per bet fee likely with minimum bet restrictions | Above 20M bets, pays 50¢ per bet | | FanDuel | Similar to DraftKings, $0.50 per bet fee with minimum bet thresholds| Above 20M bets, pays 50¢ per bet | | BetMGM | $2.50 minimum bet | Responding to tax with minimum bets | | Hard Rock Bet | $2 minimum bet | Responding to tax with minimum bets | | BetRivers | $1 minimum bet | Responding to tax with minimum bets |
The Impact on Small Bettors
The new tax and surcharges have increased the cost of sports betting in Illinois, especially affecting small bettors. Operators are adjusting with fees or minimum bets to mitigate the impact.
A Response to the Illinois Tax Increase
DraftKings and FanDuel have framed their surcharges as a forced response to the Illinois tax increase, which they argue increases the cost of doing business in the state. All operators are subject to the 25-cent levy, with analysts and industry observers noting it's likely only DraftKings and FanDuel will be subject to the 50-cent-per-bet tax.
The Future of Illinois Sports Betting
With the new tax and surcharges in place, it remains to be seen how the Illinois sports betting market will evolve. Some analysts speculate that BetMGM and Caesars are unlikely to implement surcharges in Illinois to avoid potential customer attrition from rivals who do so and gain market share in the state.
Sources:
- Fanatics Sportsbook Illinois to Add 0.25 Fee Per Bet This Fall
- BetMGM, Hard Rock Bet Set IL Sports Betting Minimums
- DraftKings, FanDuel Push Back Against Illinois Taxes
- BetRivers Illinois Minimum Bet Raises to $1 in Response to Tax Increase
- DraftKings and FanDuel have justified their surcharges as a response to the Illinois tax increase, arguing that it increases the cost of doing business in the state.
- The regional news outlets in the Midwest have been covering the impact of the new sports betting tax on operators in the Illinois market and their subsequent actions, such as surcharges and minimum bet requirements.
- In the financial sector, analysts forecast potential shifts in the Illinois sports betting industry due to the new tax, predicting that BetMGM and Caesars may avoid surcharges to prevent customer attrition and secure market share in the state.
