Gov. Pritzker Proposes Sports Betting Tax Hike

Illinois Considers Substantial Tax Hike on Sports Betting Industry

By Lisa Spencer Senior Editor Updated: 30 March 2024

Lisa Spencer Senior Editor

As a Senior Editor at Betting.US, Lisa Spencer is a valuable member of our expert team. With a Master’s degree in Applied Mathematics, Lisa is adept in gambling theory and analyzing odds. She contributes by writing online sportsbook reviews and finding competitive markets to help our readers make an informed choice.

See Full Bio

Potential Impact on Bettors and Sportsbooks

The proposed tax hike has raised concerns about its potential impact on the sports betting industry in Illinois. Some experts believe that the increased tax rate may lead sportsbooks to offer less favorable odds to bettors, as they attempt to offset the higher costs.

Adam Hoffer, director of excise tax policy at the Tax Foundation, commented:

The most likely result in the short term is bettors will get worse odds because the sportsbooks will want to make their money back. But there are long-run effects as well, where you might see it deter other companies from opening (sportsbooks) in Illinois, which would hinder competition.

Reduced competition and less attractive odds could drive some bettors to seek out illegal bookmaking operations, potentially undermining the state’s efforts to regulate and tax the industry. This is something other jurisdictions, particularly the UK, has been battling – and with more crypto and offshore casinos and sportsbooks than ever, it’s an increasingly tough task for lawmakers to regulate.

Sports Betting Industry Growth and State Comparisons

Despite these concerns, some experts point to the success of sports betting in states with even higher tax rates. New York, for example, imposes a 51 percent tax on sportsbook profits and has seen significant growth in the industry.

Alan Woinski, president of Gaming USA Corp., a gambling industry consulting firm, finds it astonishing that every state hasn’t increased their betting tax rate like New York has.

Illinois has enjoyed substantial revenue from sports betting since its legalization, with the state collecting over $150 million in taxes in 2023 alone. The majority of this revenue is generated through online betting apps, with less than $5 million coming from bets placed at physical sportsbooks.

Political Debate and Budget Priorities

The proposed tax increase has also sparked a political debate, with some Republican lawmakers expressing concerns about the potential impact on the industry and the fairness of the tax hike.

Senate Minority Leader John Curran argued that the governor’s inability to control the way he spends state money is what’s really led to this new tax increase – and he claims that it’s unfair to penalize Illinois families and businesses for what he calls “the influx of noncitizens into the US.”

Supporters of the tax increase, including Governor Pritzker, maintain that the additional tax revenue will help fund critical state programs and services, such as education, healthcare, and addressing the state’s migrant crisis.

As the legislature continues to deliberate on the budget proposal, the fate of the sports betting tax increase remains uncertain. The potential impact on the industry, bettors, and the state’s revenue will likely be key factors in the ongoing discussions.