### Illinois Lawmakers Pass $55.2 Billion Budget with New Sports Betting Tax
Illinois lawmakers have successfully passed a $55.2 billion budget for the upcoming fiscal year, which includes a new tax on every sports betting wager placed within the state.
The budget was approved just before the close on May 31, marking the end of the 2025 legislative session. It is now awaiting the signature of Illinois Governor J.B. Pritzker.
Governor Pritzker has expressed his intentions to sign the budget, describing it as the “seventh consecutive balanced budget that continues to get the state’s finances back on track.”
### New Tax on Every Sports Betting Wager
The newly approved budget anticipates an increase of $800 million in tax revenues. Governor Pritzker, who previously stated that he would veto any budget that raised taxes on individuals, corporations, or sales, guided legislators to target specific industries such as sports betting for revenue enhancement.
The legislation mandates that operators must pay 25 cents for each of the first 20,000 bets placed on their platforms, with the tax rising to 50 cents per bet thereafter. This measure is expected to generate an annual revenue of about $36 million.
Industry experts, including Truist analyst Barry Jonas and Jefferies analyst David Katz, believe this tax increase will most significantly impact leading operators like DraftKings and FanDuel.
Katz also warned that the increased costs could be passed on to bettors in the form of higher minimum bets, potentially driving them towards alternative platforms like Kalshi, a market prediction site which recently faced a cease-and-desist from the Illinois Gaming Board.
This tax was introduced unexpectedly on the last day of the legislative session, catching operators off guard and with little time to react.
### Second Tax Increase for Illinois Sports Betting in a Year
With Governor Pritzker’s impending approval, this will mark the second tax increase for Illinois sportsbooks within a year. In 2024, the state introduced a graduated tax system:
– 20% for annual revenue of $0 to $30 million
– 25% for those generating $30 to $50 million
– 30% for revenue between $50 million and $100 million
– 35% for operators with annual revenues of $100 million to $200 million
– 40% for those earning over $200 million
Moreover, operators pay separate taxes for their retail and online sports betting services. Before the 2024 increase, a flat tax of 15% was imposed. Similar to the latest tax hike, major operators like DraftKings and FanDuel were significantly affected by the 2024 increase.
### Higher Sports Betting Taxes Instead of Legalizing iGaming
In their search for additional revenue sources, Illinois lawmakers overlooked a significant potential source: the legalization of online casinos.
Despite efforts from Representative Edgar González, Jr. and Senator Cristina Castro, who introduced the Internet Gaming Act to legalize iGaming in the state, the act did not progress past the committee stage. Projections suggest that legalized online casinos could generate a tax revenue of $450 million in the first year alone, potentially reaching up to $800 million over time—a figure comparable to iGaming markets in states like Pennsylvania.
### **Illinois Fails to Ban Sweepstakes Casinos**
The conclusion of the 2025 legislative session also means that sweepstakes casinos continue to be legal in Illinois.
In April, the Senate Gaming, Wagering, and Racing Committee introduced an amendment to address unlicensed retail and online sweepstakes machines, affecting sweepstakes casinos. Although Illinois is among 12 states that considered bills to ban these social gaming platforms, to date, only Montana has enacted an official prohibition.