Sportsbooks adjust Illinois operations as per-wager tax takes effect

Facing an estimated $125 million annual burden from Illinois’ new per-wager tax, digital sportsbooks are adjusting pricing structures and user policies to offset the rising cost of doing business in one of the most active U.S. betting markets.

BetMGM will require a $2.50 minimum bet in Illinois starting Wednesday, according to a letter sent to users and posted online last week.

The letter, issued on Par-A-Dice Casino letterhead—BetMGM’s retail partner—states that the policy will apply to “all wager types,” including “bonuses, bonus bets, or tokens.” The company has not made a formal public announcement at the time of writing.

Hard Rock Bet has also implemented a $2 minimum bet on its Illinois platform, the company confirmed.

These changes come in response to a per-wager tax enacted by the Illinois General Assembly in May and effective July 1. Under the new structure, operators are charged $0.25 for each of the first 20 million bets placed annually, and $0.50 per wager beyond that threshold.

FanDuel was the first operator to respond, announcing on June 10 that it would apply a $0.50 surcharge per wager for Illinois users. DraftKings followed with the same policy two days later. Fanatics Sportsbook introduced a $0.25 surcharge later in June.

FanDuel and DraftKings are projected to surpass the 20 million-bet threshold in September and have scheduled their increased surcharge to begin on September 1. Fanatics Sportsbook, which has not previously crossed the 20 million-bet mark, has not specified when it will introduce the fee.

By instituting minimum bets, operators reduce the proportion of each wager paid in taxes. The strategy may also affect overall bet volume, which can be relevant for operators approaching the 20 million-bet limit.

The per-wager tax follows a 2024 legislative action that increased tax rates from a flat 15% to a progressive scale between 20% and 40%. That earlier increase prompted DraftKings to announce, but not implement, a betting surcharge. Flutter CEO Peter Jackson stated on an earnings call last year that FanDuel would not implement a surcharge, after which DraftKings backed off its initial announcement.

Operators that previously paid a 15% tax in Illinois moved to a blended rate of approximately 36% in 2024, with an estimated effective rate near 50% beginning July 1.

Illinois has 10 live digital sports betting platforms. So far, five have publicly adjusted pricing or wagering policies in response to the latest tax.