Proposed tax hike for Illinois sports betting receives serious pushback

A group of major commercial sports betting operators have joined forces to block attempts to hike taxes in Illinois. Gov. JB Pritzker has tabled a $52.7 billion budget for the coming fiscal year, and contained in it are details about a steep 20-percentage point increase to bolster taxes from 15% to 35%.

Understandably, this has not gone down well with the Sports Betting Alliance (SBA), which represents some of the US’ biggest brands, such as BetMGM, DraftKings, and FanDuel.

The threat is tangible enough that the SBA has persuaded consumers to engage with state lawmakers to advocate against a tax hike. According to the SBA, roughly 25,000 emails have been sent to the Illinois legislature and Gov. Pritzker to express their disgruntlement.

• The SBA fears bettors will face less favorable odds.

• Promotions and bonuses could become more limited.

• There may be a rise in illegal offshore betting activity.

As things stand, Illinois legislators have until the end of the month to vote on the proposed tax raise, and SBA spokesperson Nathan Click has already voiced his concerns.

He said:

“SBA companies entered Illinois with the understanding that they would be operating under a 15% tax rate. All of them are currently operating in the red but are still investing in the state based off long-term potential under a 15% tax rate. Doubling the tax rate massively changes the calculus — and basically makes these investments exceedingly harder to recoup — much less turn a profit.”

• Illinois is not alone in facing potential tax hikes.

• New Jersey is considering raising its sports betting tax to 30% from 14.25%.

• Washington D.C. is also reviewing a similar proposal to boost competitiveness.

The subject of a tax hike isn’t palatable in Illinois, and inevitably, it will remain a thorny issue.

• While challenges lie ahead, the fight is far from over for Illinois’ sports betting operators.