Industry expert: More than doubling sports gambling tax will have negative impact | Illinois

(The Middle Square) – An industry expert says Gov. JB Pritzker’s budget proposal to increase the sports betting tax by 20% could have an impact on the industry.

If lawmakers agree, the tax on sports bettors would rise from 15% to 35%, one of the highest percentages in the country. If passed, the higher tax would take effect July 1, the start of the new fiscal year. Pritzker’s office estimates it could generate $200 million in increased tax revenue.

Dan Holmes of gambling information website PlayIllinois said a huge increase in the tax could potentially prompt some operators to scale back their operations.

“There have been situations like in New York where both Caesars and BetMGM said, ‘The cost of customer acquisition is so high that we’re going to reduce our market spending,'” Holmes said.

New York imposes a 51% tax on mobile sports betting revenue.

Holmes said major operators like DraftKings and FanDuel shouldn’t have any issues with the increased operating taxes, but may choose to offer fewer perks to Illinois sports bettors. However, there is speculation that smaller sportsbooks could suffer and close their operations in Illinois.

Sports bettors in Illinois wagered about $10 billion in 2023, ranking the state third in the nation behind New York and New Jersey. The operators set a record for monthly sports betting revenue in December with over $128 million.

The state collected just over $150 million in taxes from sports betting last year, an increase of $32 million from 2022.

The Illinois Department of Human Services recognizes March as Problem Gambling Awareness Month. If gambling has become a problem for you or someone you know, call 1-800-GAMBLER. Help is also available via the website AreYouReallyWinning.com.

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