Illinois Betting Tax Coincides with Noticeable Drop in Wagering
Illinois’ recent change to sportsbook taxation has been followed by a pronounced fall in the number of bets placed statewide.
LISTEN TO THIS ARTICLE:State data and industry reporting show sports betting activity in Illinois has weakened since the state enacted a revised tax structure late last year. Under the new rules, sportsbooks pay $0.25 per wager on the first 20 million wagers they process and $0.50 on each additional wager. Operators said the levy left many firms adjusting pricing and fee strategies to protect margins.
Publicly available figures from the Illinois Gaming Board reviewed by regional media indicate a year-over-year decline in betting volume: roughly 5 million fewer wagers were placed in September 2025 compared with September 2024, a fall of about 15% in total ticket count. While seasonal patterns and sporting calendars can influence monthly numbers, industry stakeholders and some analysts have linked the shortfall directly to the tax-driven rise in retail-level charges.
Major operators implemented customer-facing fees after the tax took effect. Several leading sportsbooks instituted a flat transaction charge on single wagers to offset higher collection costs. Those moves appear to have altered bettor behavior: casual customers are more price-sensitive and can quickly migrate to lower-cost alternatives when margin pressure is passed to them.
Joe Maloney, president of the Sports Betting Alliance, warned that higher betting costs could push volume outside the regulated market. "Any bettor with any level of sophistication is really paying attention to their costs, right? And so, when you have the ability to have multiple competitive entrants across the state of Illinois in the legal regulated marketplace and then a myriad number of options in illegal or unregulated sites, you’re going to go for that best price", he said.
Maloney and other critics say the tax undercuts one of the principal aims of legalization: to migrate gamblers from unregulated operators to licensed, monitored providers that safeguard players and funnel revenue into state coffers. If bettors shift to offshore or underground options, regulators lose oversight and tax receipts, even as licensed operators face weakened balance sheets.
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Regulatory Response and Industry Outlook
The Illinois Gaming Board continues to publish monthly activity reports and has said it will monitor market health and compliance closely. Regulators are aware that tax policy can drive unintended consequences; historically, sudden cost shifts have prompted debates about revenue optimization versus market competitiveness in multiple U.S. jurisdictions, from Nevada to New Jersey.
Operators in Illinois are now at a crossroads. Some have signaled they will absorb part of the tax to retain customers, while others have favored transparent per-wager fees to avoid eroding promotional budgets and odds quality. Smaller local sportsbooks – already operating on thinner margins than national brands – could be disproportionately affected by the higher per-wager charge after the initial 20 million threshold.
For bettors, the short-term effect has been clear: fewer bets and more scrutiny of price. For policymakers, the decline raises a policy question about whether the tax achieves its fiscal objectives without damaging the regulated marketplace that tax revenues were meant to support.
Industry analysts say the situation merits close attention over the next several quarters. If wagering volume does not stabilize, lawmakers and regulators may face pressure to reconsider the structure or application of the tax. In the meantime, market participants will continue adjusting product offers, loyalty incentives and risk limits to retain customers in a more price-sensitive environment.
Data-driven oversight and regular reporting will be critical to determine whether the downturn reflects a temporary recalibration or a longer-term migration of play to unregulated operators. Stakeholders across Illinois – from the Gaming Board to sportsbook executives and consumer groups – are watching the next reporting cycle for clearer signals about the tax’s net effect on public revenue and marketplace health.
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