Illinois lawmakers have approved a $55.2 billion state budget for FY2025 that includes a big change for the gambling industry: a big tax increase on online gambling revenue.

The new structure introduces a graduated tax on gross gaming revenue (GGR) from online sports betting. Instead of the current 15%, operators will now pay between 20% and 40% depending on their annual revenue — and it will hit market leaders like FanDuel and DraftKings the hardest.

What You Need to Know:

  • The 15% flat tax is gone; instead, there’s a tiered rate: 20% for the first $30 million in annual revenue, up to 40% for revenue above $200 million.
  • According to Legal Sports Report, this will be the highest top-line tax rate on sports betting in the US.
  • Industry advocates, including the Sports Betting Alliance, say the change will stifle competition and drive users to offshore sites.
  • The budget also includes a per-wager tax — 25 cents per bet on the first 20 million wagers annually, then 50 cents per bet after that. (CDC Gaming Reports)

Illinois is betting big on gambling taxes to fill budget holes — but for affiliates and operators, the increase means tighter margins and a new user acquisition strategy.