The Illinois Senate has advanced progressive legislation regarding sports betting

The Illinois Senate on Sunday evening passed a bill that includes a tax increase for sports betting, which would come from a progressive system based on operators’ revenues, starting with fiscal year 2025 that begins July 1.

The Illinois Senate has passed HB 4951 in an effort to implement a progressive sports betting tax on operators

HB 4951 passed by a vote of 37 to 22 after a key amendment was added to Saturday’s proposal. Gross revenues from mobile and retail betting would be taxed at the same progressive rates. However, they would be taxed as separate entities.

It is more likely that this measure will affect FanDuel and DraftKings – the state’s two highest-grossing mobile operators. Both sportsbooks typically reach $200 million in adjusted gross revenue (AGR), which triggers the 40% maximum rate.

The first $30 million of AGR would be taxed at 20%, followed by 25% for the next $20 million at 25%. Revenues of $50 million to $100 million would be taxed at 30%; sales from $100 million to $200 million at 35%; and income above $200 million would receive a 40% tax rate.

New York’s 51% tax rate on gross gambling revenue (GGR) is the highest in the country.

The bill must now pass the Illinois House before it can be signed into law by Governor JB Pritzker. Pritzker signed the Gaming Expansion Act into law in June 2019 to legalize sports betting in the Prairie State.

Sports Betting Alliance Disapproves of Progressive Tax Law

Naturally, the Sports Betting Alliance (SBA) called the budget an “extremely disappointing decision that will cause real damage.” The proposal nearly triples the tax rate for the most successful operators.

Licensed operators have been paying a 15% tax since sports betting first launched in June 2021. Earlier this year, Governor JB Pritzker proposed an increase to 35%. The Senate version of the budget exceeds that percentage. The cheapest tax would be 20% and the highest 40%.

Additionally, the Senate’s progressive sports betting tax separates AGR for retail and digital sportsbooks. The limits are the same if an operator offers retail and digital sportsbooks.

Additionally, SBA President Jeremy Kudon posted on

“This tax increase means worse products, worse promotions and inevitably worse odds for Illinois customers – not to mention giving a huge advantage to the dangerous, unregulated illegal offshore sportsbooks that don’t pay taxes and don’t play by the rules for sports betting in illinois. .”

Illinois would become the second state with a progressive tax on sports betting. In Arkansas, all casino revenue is taxed at 13% for the first $150 million and 20% for revenue above $150 million.

In fact, Arkansas sportsbooks pay 13% in taxes until the operator exceeds $150 million in total gaming revenue. The tax rate then jumps to 20%.