Under the proposed Fiscal Year 2025 budget, the tax for sports betting would increase from 15% to 35%

Illinois was among the US states that legalized sports betting one year after PASPA was struck down. With the activity legalized in the summer of 2019, the state officially launched its retail market in March 2020, followed by a mobile betting market launch in June of the same year.

Currently, the state imposes a 15% tax on mobile sports betting revenue, while retail betting revenue is subject to tax between 15-17%. But the current tax rate is likely going to change soon, judging by the state’s newly proposed budget.

On Wednesday, Illinois Gov. J.B. Pritzker proposed a $52.7 billion state budget, which seeks to address a number of key issues such as the ongoing migrant crisis, invest in the state’s economic infrastructure and education, among other key initiatives. As a part of the proposed budget, Gov. Pritzker suggested an increase in the tax rate applicable for sports betting.

According to the budget, described by the governor as part of his “multi-year plan to move Illinois forward, restoring the fiscal and economic health of the State,” the tax on sports betting would increase from 15% to 35%. This significant uptick in the tax rate is expected to generate an estimated $200 million, growing the state’s proceeds from the activity.

The FY25 Budget Is “Focused and Disciplined”

Gov. Pritzker’s first budget address in 2019 laid a foundation for the economic growth of the state. In his most recent budget address, the governor explained that he “inherited a hollowed-out state government notorious for its fiscal instability and structural deficits that prevented the State from moving forward.” A few years later the governor is in his second term and anticipates further prosperity for Illinois.

He explained that he hoped for a budget surplus but this was not the case. “Our FY25 budget proposal makes some hard choices. I wish we had big surpluses to work with this year to take on every one of the very real challenges we face,” explained Gov. Pritzker.

Describing the proposed Fiscal Year 2025 budget, the Governor said it is “focused and disciplined,” following strategic actions over the last few years. Additionally, he pointed out: “It’s important to note, that while this budget is tight this year, our fiscal house is in order, and we are able to keep our commitments to the people of Illinois.”

While the increase in sports betting tax will undoubtedly boost the budget, the sector is yet to respond to the proposed tax hike. Considering the increase more than doubles the current rate, it is not unexpected for the sector to oppose this drastic change.

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