Sportsbooks in Illinois Using Dubious Claims Industry

CFG Claims Sportsbooks in Illinois Using Dubious Claims

By Amelia Walker Senior Content Writer Updated: 05 June 2024

Amelia Walker Senior Content Writer

Amelia Walker is a Senior Content Writer at Betting.US. She has a law degree and deep knowledge of the gambling laws in the United States. Her mission is to keep players informed about responsible gambling, while her passion for sports helps her create useful guides. Amelia has over a decade of experience in betting, which has positioned her as a trusted voice among our readers.

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According to recent reports, Illinois Governor J.B. Pritzker’s proposal to increase the state’s sports betting tax from 15 percent to 35 percent has sparked controversy within the gaming industry. The Campaign for Fairer Gambling (CFG), which is an independent wagering reform group, has accused the Sports Betting Alliance (SBA) of using ‘dubious claims’ in its bid to thwart Pritzker’s plan.

The CFG claims that the SBA, which is backed by prominent sports betting operators, such as BetMGM, DraftKings, FanDuel, and Penn Entertainment, has not provided sufficient evidence to support its opposition to the tax hike that has been proposed by the state governor.

Derek Webb, who is the founder of the CFG, criticized the tactics employed by the SBA, suggesting that the initiative is a ploy by global gambling conglomerates to secure a foothold in the Illinois market before broader gaming expansion. He said:

Global gambling conglomerates are expert at positioning sports betting as a foot in the door before the real floodgates inevitably open. Sports betting often serves as a gateway to slots and table games down the line, because they bring in even more revenue — not to mention harm.

The group has also questioned the legitimacy of signatures gathered in a petition by the SBA, raising concerns about possible misrepresentation during the collection process.

The Potential Impact of Proposed Tax Hikes on Sports Betting

According to reports, one of the key issues revolves around the potential impact of the proposed tax increase on sports betting odds and revenue in the state. The CFG has refuted the SBA’s claims by using New York as an example, where a similar tax hike did not adversely affect betting odds.

The CFG said that New York’s higher tax rates had not affected hold, which ‘would shift if odds shifted’.

Despite Illinois potentially imposing the third-highest tax rate on sports wagering in the country, the CFG argues that historical data does not support the SBA’s claims regarding odds and hold percentages.

In addition, the CFG highlighted the difference between tax rates in various states, with Pennsylvania and New York imposing significantly higher taxes on sports wagering. Officials said that the contrast challenged the notion that increased taxes would inevitably lead to poorer odds for players.

iGaming Could Offset Higher Taxes in Illinois

In response to Pritzker’s tax proposal, SBA members have suggested legalizing iGaming as a viable alternative to help offset the impact of higher taxes on sportsbooks in the state. Although the SBA has highlighted the potential for online casinos to generate a lot of revenue for Illinois, officials said that the idea has not gained much traction in the state legislature.

Despite claims that iGaming could bolster revenue at land-based casinos, particularly in states like Illinois, Louisiana, Maryland, New York, and Virginia, policymakers are said to be cautious about online gambling initiatives.

This is partly down to the perceived risk of negatively affecting traditional brick-and-mortar casinos, which many are worried could end up being cannibalized as a result of online gaming initiatives.