DraftKings stock tumbled from $35.86 to $33.06 on the news that Illinois will look to add a 50% tax on handles above $20 million. A tax that could see DraftKings, as well as every other sportsbook in the state, see their tax bill jump for the second time this year.
-
Image
This time, this new tax could easily be ed on to the sports bettors in Illinois.
Illinois New Sportsbook Tax
On Saturday, Illinois lawmakers ed their budget for the 2026 fiscal year, which included a sliding fee for every bet made. Books will be charged a 25-cent fee per bet on the first $20 million in total wagers made; that fee doubles when wagers increase to above $20 million in total wagers to 50 cents per bet.
The new fee/tax was called "discriminatory, punitive, and constitutionally suspect" by the Sport Betting Alliance (SBA). The SBA is a sports betting advocacy group that features the biggest books, including FanDuel, DraftKings, BetMGM, and Fanatics.
This is also the second tax increase on sportsbooks in Illinois in consecutive years. Earlier this year, Illinois increased the tax on gross gaming revenues (GGR) from a flat 15% to a tiered system that raises to 40% on GGR that exceeds $200 million.
Being a sportsbook in Illinois must feel like a movie production crew in The Simpsons, with new taxes popping up every second.
Tax ed Onto Consumers
Sportsbooks have already threatened to bake tax increases into the price of betting. DraftKings planned to tax a player's winnings in states where the GGR tax rate was above 20%; that plan was quickly abandoned.
Books could certainly add a fee to bets placed in proportion with the tax increase, they could also add it right into the odds. The SBA made it clear that customers "will be the ones to bear the cost of this new tax."
SBA's statement on the new Illinois sports betting tax: pic.twitter.com/E7EWoxgipG
— Sports Betting Alliance (@SBAllianceUS) June 2, 2025
Why Is Illinois Implementing This Tax?
Illinois' 2026 fiscal year budget has a nearly $1 billion deficit. To close it, legislators went after smokers with a 45% increase on various smoking products, a 10% tax on digital advertising for tech companies like Facebook, as well as a new fee on bets made.
The tax on sports bets is expected to bring $141 million from the two biggest books in the US, FanDuel and DraftKings, and millions more from the 22 other legal books operating in the state.
Per Deutsche Bank analyst Carlo Santarelli, the handle tax effectively raises the Illinois tax rate on sports gambling to 60%, the highest in the nation. Meaning the rate will quadruple on sportsbooks in the Land of Lincoln by 2026.
