Illinois Sports Betting Faces 15% Decline Following New Tax Implementation
Illinois has experienced a notable 15% decline in sports betting activity in September 2025 compared to the previous year, a change closely tied to the implementation of a new tax policy.
Major sportsbooks responded by passing the additional costs directly onto consumers, resulting in an extra $0.50 fee on each wager. This adjustment has raised concerns about its potential long-term effects on the market and state revenue.
The new legislation introduced a tiered tax structure, with a $0.25 tax on the first 20 million bets and a $0.50 tax on all bets beyond that threshold. Leading operators like FanDuel and DraftKings quickly adapted by adding a flat $0.50 fee to every wager, effectively transferring the tax burden to players. This shift has had unintended consequences, prompting many bettors to seek alternatives—particularly offshore sportsbooks—in search of more favorable odds and lower costs. Industry insiders warn that such trends could undermine Illinois’s efforts to sustain a robust legal sports betting industry.
Joe Maloney, president of the Sports Betting Alliance, expressed surprise at the recent data but remains optimistic that betting activity has not simply vanished. Instead, he suggests that many players are turning to unregulated offshore sites to maximize their potential returns and avoid Illinois’s tax policies. “Any bettor with any level of sophistication is really paying attention to their costs,” Maloney explained. “When you have multiple competitive options in the legal market and a wide array of illegal or unregulated sites, the choice is clear—most will go for the better deal.”
The decline in Illinois’s wagering volume stands out in a broader national landscape where several states continue to see growth despite higher taxes. For example, New York, with some of the highest tax rates nationwide, reports increasing betting activity. The core issue in Illinois isn’t merely the tax increase but its structure. The per-bet tax model has distorted economic incentives for both operators and consumers, especially frequent bettors, who may find the additional costs eroding their value and pushing them toward unregulated markets that offer better odds.
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Maloney noted, “Once consumers start leaving the legal market, there’s no additional tax revenue to support the programs and initiatives the state aims to fund.” At the end of 2025, the Sports Betting Alliance filed a lawsuit against Chicago challenging a new law that would impose a 10.25% tax on sports betting revenue within city limits. The ordinance also requires sportsbooks to obtain new licenses, adding further regulatory hurdles.
If current trends continue, Illinois might face the reality that higher taxes do not necessarily translate into higher revenue. Instead, the state risks driving bettors into the shadows of unregulated markets, which diminishes consumer protections, undermines oversight, and ultimately reduces the funds available for public programs funded through betting taxes. Illinois Sports Betting
