DraftKings announced that it will set a 50-cent transaction fee on any mobile and online sports bets in Illinois. This is in response to a recent increase in sports betting tax within the state.
DraftKings joins FanDuel as the second operator to impose 50-cent fees in Illinois. The changes will take effect on September 1, 2025, right in time for the NFL season.
In a June 12 press release, DraftKings CEO Jason Robins stated, “We are disappointed that Illinois policymakers have chosen to more than triple our tax rate over the past two years, and we are very concerned about what this will do to the legal, regulated industry.”
Illinois will increase its tax rate from 20 to 40 percent and impose a $0.25 fee on each wager for the first 20 million bets placed at licensed sportsbooks within the state. Once that threshold is reached, there will be a $0.50-per-wager tax levied. This is why DraftKings and FanDuel matched that fee with a 50-cent charge of their own.
With these increases, Illinois has the second-highest tax rate on sports betting, behind only New York. This is despite Illinois having about half of the annual revenue that New York generates.
DraftKings was willing to remove its 50-cent fees if legislation were repealed, but that won’t be the case after Gov. J.B. Pritzker signed House Bill 2755, finalizing the new tax rate on sports betting. The new tax rate goes into effect on July 1.
In a June 10 press release, Flutter’s (parent company of FanDuel) CEO Peter Jackson stated that the Illinois transaction fees “will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state.”
Lower-stakes bettors are affected more because the 50-cent transaction fee is a larger portion of the wager for those who put down $10 or less on each pick. For example, a $10 wager with +100 odds would pay $9.50 instead of the usual $10. That means over 100 wagers, recreational bettors could lose out on $50 in potential winnings.
DraftKings and FanDuel are the industry leaders throughout the country, including Illinois, holding approximately 75% of the market share within the state. Many Illinois bettors choose DraftKings or FanDuel as their preferred platform, but the change in tax rate and incoming transaction fees may influence user behaviour.
With this new tax, Robins worries that Illinois will “fuel the rapidly growing illegal industry, which pays no taxes or fees and provides none of the consumer protections that regulated operators offer.”
Illegal offshore sportsbooks often offer limited banking methods, customer support options and responsible gaming tools. These operators are not required to comply with industry regulations, which puts sports bettors at risk if they are pushed to these platforms due to transaction fees.
Whether players switch from DraftKings and FanDuel to other regulated sportsbooks within the state that haven’t yet implemented a similar transaction fee, such as bet365 or BetMGM, is yet to be determined.
