Football is underway, and what should have been a reason to celebrate the most lucrative season on the sports betting calendar became a concern.
September’s data showed a smaller number of wagers this year in Illinois compared to last, with many blaming the legislature’s per-bet transaction tax on September’s declining wagers.
A Taxing Problem
The Illinois legislature has been getting creative with new ways to tax the sportsbooks that produce so much revenue for the state. After reconfiguring the tax structure into a tiered system, Illinois received a whopping $266.7 million in tax revenue last year.=
However, that wasn’t enough, and in July, the legislature added a per-tax fee for every sportsbook operating in the state. September was the first month of college and professional football, as well as the first full month of betting, in which the transaction tax of 25 cents for each online bet up to 20,000,000 bets and 50 cents on each bet thereafter was implemented.
The tax has been decried by all the sportsbooks and their industry mouthpieces, claiming it will dampen revenue in the long run when they pass this tax off to the consumer, which is precisely what the industry powerhouses DraftKings and FanDuel have already done.
Other sportsbooks have also implemented a 25-cent per-transaction fee, while several others have raised their minimum bet to cover the transaction tax.
Every bettor in Illinois who makes a wager with DraftKings or FanDuel will be subject to a 50-cent tax, and the effects are starting to manifest. The number of wagers in September declined 15% to 30.6 million, yet, because the minimum bets increased, the handle was up 9% year over year, a new record for Illinois’ September handle.
A Disturbing Trend?
Sports Betting Alliance of Illinois spokesperson Maura Possley pointed out that five million fewer bets were made in September 2025 compared to September 2024, and she believes this is the beginning of a serious problem unless the transaction tax is repealed.
If the legislature are so inclined to eliminate it, DraftKings and FanDuel have announced they, too, would rescind their transaction tax on the customer. Other Illinois sportsbooks have vowed to do the same, but until that time comes, the tax will be imposed on Illinois bettors.
Despite the onerous tax rate for FanDuel in the Land of Lincoln, its parent company’s leader, Flutter CEO Peter Jackson, appeared to be unfazed by the decline in wagers and instead focused on the increased revenue.
“As you’d expect, we’re seeing a reduction in the number of bets (in Illinois) but increasing handle per bet,” Jackson said during last week’s quarterly presentation. “When we look to the September data, Illinois is definitely behaving in line with other states.”
