Due to a new per-bet state tax, DraftKings and FanDuel will begin charging Illinois bettors a 50-cent fee per wager on September 1. Operators warn that the move burdens consumers and benefits illegal markets.
The largest online sportsbook companies in Illinois have come to the same conclusion about the state’s impending tax increase: their consumers will bear the brunt of the burden.
DraftKings Inc., located in Boston, stated Thursday evening that all online sports bets placed with it in Illinois would be subject to a 50-cent “transaction fee” beginning September 1.
The idea is identical to one previously unveiled by competitor FanDuel.
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Tit for tax
Both upcoming transaction costs are in reaction to Illinois lawmakers recently adopting a per-bet tax on online sportsbook companies, which takes effect next month.
Under the new levy, the first 20 million bets placed in a year would cost a mobile bookmaker like DraftKings an additional 25 cents each. After 20 million wagers, the charge increases to 50 cents per bet.
The additional per-bet tax on Illinois sports betting follows state lawmakers’ vote last year to increase the tax rate on sportsbook earnings to up to 40% for companies such as DraftKings and FanDuel.
If Illinois removes its per-bet tax, DraftKings said it would “immediately” eliminate its per-bet cost for clients. FanDuel has stated the same thing.
“Illinois has been an important part of our growth, and we’re proud to have contributed meaningfully to the state through tax revenue, job creation, and a sustained investment in responsible gaming tools and resources,” said Jason Robins, CEO of DraftKings. “We are dismayed that Illinois politicians have chosen to more than quadruple our tax rate over the last two years, and we are deeply worried about the impact on the legitimate, regulated business. Meanwhile, Illinois continues to support the rapidly expanding illegal sector, which pays no taxes or fees and offers none of the consumer safeguards that licensed operators provide.
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