By BBBB
Illinois has approved a major tax hike for sports betting operators as the state seeks to increase tax revenues for public spending which is expected to exceed $53.1 billion in the next fiscal year.
According to reports, members of the Illinois General Assembly have returned Gov. J.B. Pritzker’s record $52.7 billion budget proposal with an additional $400 million in expenditure.
As a result, the state needs to generate additional revenues from a variety of sources with sports betting being one of the biggest contributors.
Sports Betting Tax Increase
Gov. J.B. Pritzker had originally sought to increase the sports wagering tax rate from 15% of gross revenues to a flat rate of 35%. However, lawmakers have set out a new progressive tax structure that will see rates ranging from 20% to 40%. The rate charged depends on the sportsbook’s gross revenues.
The tax was passed as an amendment to HB4951, an unrelated bill.
The rates are as follows:
- 20% – Annual AGR up to $30 million
- 25% – Annual AGR $30 million to $50 million
- 30% – Annual AGR $50 million to $100 million
- 35% – Annual AGR $100 million to $200 million
- 40% – Annual AGR over $200 million
The increased tax rates are expected to generate an additional $200 million in revenues for the state.
Illinois now has the fourth highest sports betting tax rates in the United States.
When the tax rate increase was originally proposed, Illinois sports betting operators suggested that the increase would result in poorer odds for sports bettors. However, this has not been the case in states with higher rates such as New York, New Hampshire, and Rhode Island.
Stocks in sports-betting companies like DraftKings (DKNG) and FanDuel’s parent Flutter Entertainment (FLUT) slid on Tuesday following passage of the new state budget.
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