In Illinois, Governor Jay Pritzker has signed a controversial budget for 2025, introducing a much stricter tax regime for betting operators. The new budget mandates tax increases that could see rates rise from 15% to as high as 40%.
Industry experts have expressed concerns that such a tax increase could undermine the competitiveness of government-regulated operators. An alliance of betting companies, including BetMGM, Fanatics, DraftKings, and FanDuel, among others, attempted to convey their concerns to state officials. However, their pleas were disregarded, with Governor Pritzker deeming these concerns largely unfounded.
“I am incredibly proud to have signed our sixth budget today. Our work promotes financial stability by investing in the state's future and putting money back into the pockets of hardworking, law-abiding Illinoisans,” Pritzker stated.
The governor's office supports the move, predicting it will generate an additional $200 million in revenue. The new tax structure will apply a progressive scale: income up to $30 million will be taxed at 20%, the next $20 million at 25%, earnings between $50 million and $100 million at 30%, income from $100 million to $200 million at 35%, and amounts exceeding $200 million will be taxed at 40%.
While the rates might appear fair on the surface, operators argue that they will significantly reduce their competitiveness. They worry that most players will turn to offshore markets due to the lower odds and fewer markets offered by local operators.
This significant increase in taxes on bookmakers follows a similar move in New York, where the tax rate reaches 51%. Following New York's lead, other states have begun to consider raising their rates. New Jersey is contemplating a tax rate of 30%, while Massachusetts is aiming for a 51% rate, although its efforts have yet to succeed.
