Illinois sports bets fall after betting tax, but amount wagered hits new high
The introduction of a new per-wager tax in Illinois has been followed by a sharp decline in the number of sports bets placed, despite the total amount wagered reaching an all-time high.
The figures come from a report by the Illinois Gaming Board, which shows that there were approximately five million fewer bets in September 2025 compared to the same month last year.
At the same time there was a 9% increase in total wagering, which hit a record level of US$1.4 billion. The average bet size grew to US$46.44, up 28% from last year.
Illinois’ tax was the first of its kind when it took effect in July, charging sportsbook operators US$0.25 per wager for the first 20 million bets each year and US$0.50 per wager thereafter.
The measure followed a 2024 tiered tax increase that pushed effective rates above 30% for major operators, many of which responded by introducing new fees or increasing minimum bets.
Meanwhile, Chicago Mayor Brandon Johnson has proposed an additional 10.25% tax on sports gambling revenue, though a pending state bill would prevent local governments from imposing such levies.
The tax debate comes amid renewed pressure to curb illegal offshore betting, which prompted an August letter from 50 state attorneys general urging federal action.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
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The Backstory
Why Illinois’ wager fee changed the game
Illinois’ sharp drop in total bet count but record handle did not arrive out of nowhere. Lawmakers layered a first-of-its-kind per‑wager fee atop last year’s steep rate hike on operator revenue, reshaping incentives up and down the market. The new levy, enacted in late spring and effective in July, charges sportsbooks 25 cents per bet for the first 20 million wagers each year and 50 cents thereafter. It followed a 2024 increase that pushed effective rates for major operators above 30 percent. Operators began testing higher minimums, parlay nudges and new fees, changes that can compress casual bet volume while lifting average ticket size. That is consistent with September’s data: fewer slips, bigger bets, higher handle.
The late-session push to add the per‑bet charge was part of a broader fiscal package. Lawmakers framed it as a dependable way to harvest dollars from a fast-growing sector without depending solely on volatile win rates. The wager fee also aligns with a national trend toward squeezing more tax yield from sports betting, even in mature markets. But Illinois’ design stands out because it taxes activity, not just revenue, which amplifies marginal costs on small-stake wagers and could weed out microbets.
The early outcomes will be watched closely by other states weighing whether to prioritize predictable collections over consumer price sensitivity. The state’s monthly ledgers, published by the Illinois Gaming Board, will be the scoreboard of record. The IGB’s sports wagering reports provide the best view of where volume and dollars migrate next.
How a budget gap set the stage
The per‑bet fee was crafted amid a scramble to fund public transit and plug other needs in a US$55.2 billion spending plan for fiscal 2026. Minutes before midnight, lawmakers advanced the surcharge to help raise roughly US$1 billion tied to the budget. Our earlier coverage, Illinois raises sports betting tax as part of the 2026 budget, laid out the mechanics and politics: a per‑wager levy stacked atop last year’s revenue-rate jump, with little runway for operators or bettors to adjust.
The pressure to lean on sports wagering reflected competing choices elsewhere in the ledger. The state’s published financial plan, the Fiscal Year 2026 Operating Budget, underscored the need for recurring revenue. With sports betting already delivering rapid growth, lawmakers calculated that higher capture from a still-expanding base would be less risky than carving out new taxes or deeper cuts.
That strategy, however, came with market tradeoffs. A tax on each ticket can disproportionately hit small bettors and single‑leg wagers, which are common among casual users. If those customers scale back or churn out, the state is betting that higher average stakes and a still-robust core will offset the loss in volume.
Industry pushback and on‑the‑ground adjustments
Operators tried to head off the fee, warning it would raise consumer costs and dent competitiveness. As the measure advanced, top brands lobbied hard in Springfield. The Sports Betting Alliance, representing FanDuel, DraftKings, BetMGM and Fanatics, condemned the move in a post‑vote statement, arguing it would harm the regulated market and its customers. The group posted its response here: Sports Betting Alliance statement on Illinois per‑bet tax.
Consumer‑facing voices amplified that message. Barstool Sports personality Dan “Big Cat” Katz urged fans to oppose the fee in a video shared on social media before passage; that clip remains available: Barstool Big Cat video. Despite the blitz, the tax stuck, and operators began recalibrating. In the weeks after, users encountered higher minimums, altered parlay offers and other price signals that nudge bettors toward fewer, larger slips. Those changes are consistent with a market adapting to a per‑ticket cost that erodes margin on low‑dollar bets.
Local policy also complicates the picture. Chicago Mayor Brandon Johnson floated an additional city tax on sports gambling revenue, while state lawmakers considered preempting local levies. The uncertainty around a potential municipal add‑on, even if ultimately blocked, has factored into operator risk assessments and promotional spend this fall.
Early reads from the tape
Illinois’ September figures delivered a clean read on behavior under the new regime: bet count fell by the millions year over year, while record handle climbed and average bet size jumped more than a quarter. The composition of wagers likely shifted toward parlays and higher‑denomination bets, products that can better absorb fixed per‑ticket costs. Books appear to be prioritizing profitability per slip over raw volume, a rational response when each ticket carries a nontrivial fee.
If that pattern holds, the state may still meet its revenue goals even with fewer bets, because the fee captures each wager and the revenue tax captures the hold on bigger stakes. The open question is elasticity. Should casual bettors reduce frequency or migrate to illegal sites to avoid higher effective costs, the long‑run base could shrink. Regulators and operators alike have an incentive to keep the regulated channel attractive enough to prevent a backslide to offshore books, a point industry advocates stressed as the bill moved.
A growing national appetite for higher take
Illinois is not alone. States across the map are revisiting sports betting taxes, often to meet unrelated fiscal needs. North Carolina Senate Republicans proposed doubling their online sports tax to 36 percent, positioning the market alongside Pennsylvania on the high end and earmarking tens of millions for college athletics. Read our coverage: North Carolina proposes doubling online sports betting tax.
In Maryland, Gov. Wes Moore’s plan would lift the online sports betting levy to 30 percent and raise table game taxes, a package analysts said could “rattle” the sector and pressure cash flows at leading operators. Details here: Analyst: Maryland tax hikes would rattle online sports betting sector. Louisiana advanced a bill to more than double its rate to 32.5 percent, with sponsors touting new funding for addiction programs and college athletics. See: Louisiana lawmakers discuss tax hike for sports betting operators.
Even where headline rates hold steady, lawmakers are probing the base. In Colorado, a proposal would tax operators on free bets and promotional credits, redirecting proceeds to water projects amid drought and growth pressures. Our report has the details: Colorado lawmakers discuss taxing free sports bets. The throughline in each state is the same: a search for relatively painless revenue, buoyed by the perception that sportsbooks can absorb more without cratering demand.
What to watch next in Illinois
The data will tell whether Illinois struck a workable balance. Keep an eye on the IGB’s monthly releases for sustained shifts in bet mix, hold percentage and operator market share via the IGB sports wagering reports. If bet counts keep sliding while handle rises, expect continued product tweaks that favor larger slips and parlays. Should volume erosion accelerate, pressure will build for policy adjustments, especially if evidence mounts of migration to unregulated sites.
Budget season will also test the durability of the per‑wager strategy. If fiscal collections track targets in the FY 2026 budget, lawmakers could be emboldened to maintain or expand the model. If not, the debate may reopen alongside renewed calls for stricter action against illegal operators and for guardrails preventing local add‑ons. For now, Illinois has become a case study in how a fixed fee reshapes a mature betting market. The stakes are clear: billions in wagers, millions in tax dollars and the balance between consumer costs and a sustainable regulated ecosystem.
