Illinois passes $55.2B budget with new tax on online sports betting

Illinois lawmakers have approved a $55.2 billion state budget that includes a new tax on online sports wagering, part of a broader package of tax increases aimed at shoring up state finances and addressing long-term fiscal challenges.

The legislation, which passed both chambers in a matter of hours, introduces a new per-wager tax of a quarter or 50 cents on every online sports wager, targeting companies such as DraftKings and FanDuel. The measure is expected to bring in an estimated $36 million in revenue annually.

The sports betting provision builds on last year’s implementation of a graduated tax system for sportsbooks, marking another step in Illinois’ strategy of tapping high-growth sectors to help balance the budget.

“We’re presenting a budget that meets this moment,” said Rep. Robyn Gabel (D-Evanston). “It is balanced through smart cuts and through smart revenues, not balanced on the backs of working families.”

The tax hike on online betting is one element of a larger fiscal package that includes increased levies on tobacco products, nicotine pouches, and e-cigarettes, along with changes to corporate tax rules affecting out-of-state businesses.

“Our priorities are being fiscally responsible, preparing for the future, and facing the challenges that are coming our way head-on,” said Sen. Elgie Sims (D-Chicago).

Governor JB Pritzker, who is expected to sign the legislation, defended the budget as a necessary response to external economic pressures.

“Even in the face of Trump and Congressional Republicans stalling the national economy, our state budget delivers for working families without raising their taxes while protecting the progress we are making for our long-term fiscal health,” he said.

Republicans, however, blasted the process and substance of the bill, criticizing both the speed of its passage and its potential impact on taxpayers.

“Democrats introduced a bill, $880 million in tax increases… and six short hours from introduction to passing in both the House and the Senate. That’s not transparent,” said Senate Minority Leader John Curran (R-Downers Grove).

“Billions of dollars in tax increases that are driving working families out of Illinois — that’s on you,” added Sen. Chapin Rose (R-Mahomet).

Despite the backlash, Democrats hold a supermajority in both chambers, allowing them to push the legislation through without Republican support.

The move highlights a broader trend among U.S. states to capitalize on the rapid growth of online gambling and sports wagering as a means to fund public services and close budget gaps.