There was so much talk during this legislative session about pro sports issues unlikely to advance – public aid for the stadium dreams of football and baseball teams – it somewhat crowded out the attention on a measure with much more momentum and potential for immediate influence.
As lawmakers blew past a self-imposed early deadline to complete the people’s business over the weekend, one proposal worth attention is a change in the way Illinois taxes sports wagering.
I like to take stock of the young market a few days before each Super Bowl. This year’s was just the fourth on which Illinoisans could bet legally. According to PlayIllinois.com, which takes its data from igb.illinois.gov, Illinois books took in $25.3 billion from March 9, 2020, through the end of November 2023, generating $329,456,593 tax dollars for the state. Our online market is second in the country and it is now impossible to watch most professional or collegiate sports broadcasts without being inundated with sports wagering promotions.
Gov. JB Pritzker has pushed for increasing the sports betting tax from 15% to 35%, hoping to generate $200 million for spending priorities. But lawmakers are floating a graduated rate system where casinos would pay between 20% and 40% depending on their adjusted gross revenue with the money to be shared between the general revenue fund and capital expenditures.
Under that schedule, all sports gambling revenue would be taxed at 20% up to the first $30 million. The next band is 25% for up to $50 million, 30% for up to $100 million, 35% for up to $100 million and 40% for $200 million and more.
State Sen. Celina Villanueva, D-Chicago, said the plan still gets to Pritzker’s targeted $200 million, according to The Daily Line’s Ben Szalisnki. Reporting for SportsHandle.com, Chris Altruda said only two of the state’s eight holders of mobile betting licenses would be in the top tier: FanDuel and DraftKings. He said three (BetRivers, Fanatics and possibly ESPN BET) might be in the 30% tier.
“A source close to DraftKings and FanDuel says that ‘all options are on the table, including withdrawing from the state,’ " according to reporting from Hannah Meisel of Capitol News Illinois.
While I don’t doubt a source made that claim to an ace reporter, I do question whether either company would seriously consider abandoning a huge market still shy of its peak over a top marginal rate that still falls well short of states like New York and New Hampshire, where the rate clears 50%.
The smaller books would happily slice into that pie, while the big dogs could avoid the top rate by doing less business. I don’t bet on sports, but I’ll wager this plan is a winner for Illinois.
• Scott T. Holland writes about state government issues for Shaw Local News Network. Follow him on X @sth749. He can be reached at sholland@shawmedia.com.
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