Governor J.B. Pritzker has suggested tax increases on corporations and has also set his sights on top-rated online sportsbooks operating throughout Illinois as a resource to fund a variety of projects in the Prairie State.
Pay Up
Billionaire Governor J.B. Pritzker has outlined his Fiscal Year 2025 budget proposal and revealed his intention to raise $800 million through taxes on corporations and sports betting revenues.
A few of the governor’s pet projects have the state earmarking $182 million to “welcome centers” for migrants and $500 million on expanding Illinois’ quantum computing industry while also funding a cryogenics facility.
Pritzker is calling for a substantial increase on the current 15% that online sportsbooks are paying on adjusted gross revenues. Last year, $11.6 billion was wagered amongst the 11 online sportsbooks at a hold –or win rate– of 8.6%, which yielded the sportsbooks approximately $1 billion, of which the state received $150 million.
The governor would like to see that tax increased to 35%, which would have brought in an extra $200 million to the state’s tax coffers last year.
Illinois has a comparable population to Pennsylvania, a state that not only allows mobile sports betting but is one of six states that permits online casino gambling. Pennsylvania levies a 36% tax on its sportsbooks, which is possibly why Governor Pritzker decided upon his proposed tax increase.
Illinois is also projected to bring in $52.2 billion in total revenues, and considering the $50.4 billion in authorized spending in last year’s budget, that gives the state a $1.8 billion surplus. However, spending is expected to increase, which is why the governor is seeking an increased tax on sportsbooks and corporations operating in the state.
Sportsbooks Counter
Naturally, the sportsbooks operating in Illinois were none too pleased about the governor’s proposed tax increase. That was vocalized through its trade group, the Sports Betting Alliance, funded by DraftKings, FanDuel, BetMGM and Fanatics.
The Sports Betting Alliance issued the following statement:
“Legalizing iGaming in Illinois would create much more revenue than raising sports betting taxes, and all without harming the health of the legal sports betting market and casinos. IGaming would create $775 million each year in ongoing new revenue for Illinois — more than triple the amount of this proposed tax increase ($230 million a year).
“Meanwhile, raising taxes on sports betting will allow illegal offshore sports operators to provide better odds and a competitive advantage over law-abiding sports books, crowd out smaller, startup and minority-owned operators and their business partners, and threaten the long-term health and tax revenue generated by the legal market.”
Still, the governor has not been eager to delve into the iGaming realm despite the fact it makes far more money than online sportsbooks. And he is not alone, as most states have avoided it as being too much of a good thing.
The fear is that allowing the public mobile access to playing hand after digital hand of blackjack or electronic slot machines could lead to a spike in gambling addiction.
Christina Gray, executive director of the Indiana Council on Problem Gambling, said, “First of all when you put anything on the internet, I think it can potentially increase the number of problem gamblers. You don’t have to physically get up and go anywhere. You can just simply get on your phone.”
