DraftKings has announced that it will implement a $0.50 fee on every wager placed in the state of Illinois in a move that aligns with a similar decision made by Flutter Entertainment.
This comes as a response to the new tax reforms in the state, which oblige operators to pay a fee for each wager placed by their players in Illinois.
Under the new legislation passed in June, sports betting operators must pay $0.25 per wager up to $20 million in annual handle, with the fee increasing to $0.50 for bets that will surpass that limit.
As a result, leading operators such as FanDuel and DraftKings are expected to be affected the most, which is where the decision to impose wager fees in Illinois comes from.
Jason Robins, CEO and co-founder of DraftKings, expressed concern over the decision and commented:
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 investment in responsible gaming initiatives. We are disappointed that Illinois policymakers have chosen to more than triple our tax rate over the past two years. We’re seriously concerned about the long-term effects on the legal, regulated market.
Additionally, Robins also criticized the lack of enforcement against illegal operators, stating that illegal platforms continue to thrive without paying taxes or offering consumer protections, a contrast from legal operators who adhere to gambling regulations.
Earlier in 2024, lawmakers from Illinois approved a massive increase in the sports betting tax rate.
Previously, the flat tax in the state was 15%, an amount that was replaced by a progressive tax system that ranges from 20% to 40% depending on an operator’s revenue.
By introducing the new progressive tax, Illinois positioned itself as his marks one of the steepest tax regimes in the U.S. sports betting industry.
This makes for a somewhat dire situation, as those affected the most will very likely be the same players who keep the industry and profits of the casinos running.
