Illinois Ought to Decrease Sports activities Betting Taxes, Says Coverage Group

• State has fifth-highest sports activities betting taxes within the US
• Illinois Coverage says state ought to go decrease, not larger on these levies
• Chicago may take into account its personal sports activities wagering tax hike

Illinois has among the highest on-line sports activities betting taxes within the US — a standing the state ought to rethink if it needs to proceed raking in money from dropping bettors.

Illinois Gov. JB Pritzker indicators a invoice in August 2023. A coverage group says the state ought to decrease sports activities betting taxes. (Picture: AP)

That’s the view of the Illinois Coverage Institute (IPI), which is described as right-leaning in some circles as a result of it advocates for decrease taxes and diminished authorities spending – insurance policies which can be arduous to come back by in deep blue Illinois. By way of its Illinois Policy publication, the institute mentioned the state’s excessive sports activities wagering taxes danger crimping what’s grow to be a formidable income stream.

Individuals needs to be free to put a guess, however state authorities shouldn’t be hoping they lose so it will probably spend extra,” in keeping with the group. “If Springfield needs a aggressive, wholesome betting market that funds public companies with out punishing residents, lawmakers ought to roll again the per-bet charge and maintain Illinois’ market engaging to gamers.”

The per-bet charge comment pertains a coverage signed into regulation in July beneath which the state applies a tax of 25 cents on an operator’s first 20 million booked bets and 50 cents thereafter.

Sure, Illinois Has Excessive Sports activities Betting Taxes

The per-bet tax scheme arrived a couple of yr after Illinois carried out a progressive sport wagering tax plan that shifted a lot of the burden to the most important operators — specifically DraftKings and FanDuel.

That’s to say the state isn’t shy about elevating wagering-related levies or practically some other taxes for that matter. Its sports activities betting tax charge quantities to 50%, tying it with Delaware for fifth-highest within the nation. When specializing in closely populated states, Illinois trails solely New York, which taxes sports activities betting at a charge of 51%. The following highest well-populated state is Pennsylvania at 36%.

Even Massachusetts and New Jersey — states identified for having an assortment of excessive taxes — apply levies of simply 20% and 21%, respectively, to on-line sports activities betting. The IPI believes that whereas sports activities betting has been a money cow for Illinois, that income might be in danger if the state doesn’t take into account a extra favorable tax construction.

“Illinoisans misplaced $1.12 billion betting on sports activities in 2024, together with $700 million on long-shot, high-payout bets often called parlays that require a number of outcomes. With the brand new charges in impact, these losses will climb even larger,” provides the assume tank. “The chance is bettors will return to unregulated, unlawful markets the place the state collects nothing and shoppers have fewer protections.”

Chicago Might Be Subsequent

Money-needy Chicago may take a web page from the state’s playbook and deploy its personal per-bet tax. In a brand new report, the Chicago’s Monetary Future Job Drive mentioned that if the town employs a per-wager charge of fifty cents on web sports activities wagers positioned inside metropolis limits, it’d add one other $17 million in annual income.

That’s pennies on the greenback relative to the estimated fiscal 2026 deficit of $1.1 billion, however that finances hole implies the town is compelled to discover new income sources.