Illinois sports betting operators could face tax hike to 35%
Governor JB Pritzker unveils budget which includes 20 percentage point leap in tax to boost coffers in the Prairie State
Illinois Governor JB Pritzker is pushing for the sports betting tax rate to more than double to 35% in a move he has claimed would provide an additional $100m for the state.
As part of the governor’s budget, the Democrat is looking to increase the tax rate from 15% by 20 percentage points that would drag Illinois into the top three most tax-heavy sports betting states in the US.
New York tops the pile with a 51% tax rate while Pennsylvania is next, albeit some way behind the Empire State, with 36%.
However, operators in Pennsylvania are able to deduct promotional credit from GGR before paying tax on adjusted gross revenue.
Illinois does not offer its affiliated operators the same benefit.
The proposed tax hike formed part of Pritzker’s annual budget, which includes more than $900m in proposed tax increases.
If approved, the new sports betting tax rate would come into effect on July 1 this year.
Illinois’ sportsbooks reported $1bn in revenue in 2023, making it the third-largest state by that metric behind New York and New Jersey.
Eight mobile operators and 11 retail sportsbooks operate in the state, including top two market leaders DraftKings and FanDuel.
Illinois went live with sports betting in June 2019, with Pritzker himself having signed the vertical into law.