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Read Full BioThe sports betting and iGaming platform Fanatics has confirmed that it will oblige its Illinois customers to absorb the cost of a new $0.25 per-bet tax on mobile bets.
The state launched the tax on July 1. Henceforth, Illinois sportsbooks must pay $0.25 on the first 20 million online bets placed in the state annually. If they exceed this threshold, they will have to pay $0.50 on every further bet.
Sports Business Journal quoted a Fanatics spokesperson as stating said its decision “reflects the high cost of operating” in Illinois.
The Fanatics move comes hot on the heels of similar announcements from the operators FanDuel and DraftKings.
CBS News Chicago reported that sports betting companies were only “expected to eat the costs” for a short period of time.
Both FanDuel and DraftKings have announced they will start charging gamers a $0.50 fee on every wager placed in Illinois from September 1 this year.
Lawmakers included the new tax law in the latest state budget, which passed the Illinois General Assembly early last month.
Fanatics Not Expected To Reach 20 Million Bets Threshold
Analysts said last month that DraftKings would have paid out around $68 million in additional taxes if the new levy had been in effect last year.
Experts also think that only FanDuel and DraftKings currently exceed the 20 million bet threshold, meaning that Fanatics bettors will likely only need to pay an additional $0.25 per bet for the foreseeable future.
Observers claim that the providers may cut the number of promotional events they offer in Illinois to offset rising costs.
Illinois last year introduced a progressive tax system of up to 40%, a steep rise from its previous rate of 15%.
The Sports Betting Alliance said last month that a per-bet tax mostly “penalizes small recreational bettors, many of whom are betting a single dollar or two.”
The alliance warned that lawmakers were “essentially urging customers, and especially these small-dollar bettors, to switch to unsafe and unregulated sportsbooks.”
It claimed that these unregulated platforms “defy state consumer protections and generate zero taxes for state priorities.”
