Last updated on May 8th, 2024 at 03:35 am
The Sports Betting Alliance, a group of sportsbook operators, opposed the Illinois tax increase proposal from the office of Governor JB Pritzker. Its goal is to increase the sports betting tax rate from 15 percent to 35 percent. Thus, becoming a bookie will be more expensive in the start after the approval of the proposal.
As a countermeasure to the planned tax increase, the SBA initiated a campaign encouraging customers to reach out to their state representatives and voice their objections to increasing taxes on sports betting. A representative from the SBA informed the Legal Sports Report that more than 25,000 emails had been sent to state lawmakers and Governor Pritzker, expressly expressing the public’s strong objection.
The coalition’s concerns are legitimate. They argue that the tax increase would significantly impact the market, leading to poorer odds for players and potentially deterring them from betting on sports. The additional financial burden could result in fewer raises and bonuses, further affecting the industry’s competitiveness. Lastly, the SBA worries that bettors may be driven towards tax-free, illegal offshore operators, posing a threat to the industry’s integrity.
Illinois Tax Increase Proposal on Sports Betting
According to sportsbook pay per head sources, Illinois lawmakers will vote on the tax hike by the end of May. Residents must make their thoughts heard during this vital period.
The planned tax hike by the SBA would place a financial burden on sportsbook operators, which is another reason against it. There would be far less money for operators on responsible gaming, technological updates, and customer support services if the tax rate rose from the 15% they entered the market to 133%. Based on the initial tax rate arrangement, many businesses continue to commit to the state while operating at a loss.
Illinois is not the only state considering a tax increase. Other states are also contemplating the same. New Jersey is also considering raising its tax rate from 14.25% to 30%.
Financial Burden to Sportsbook Operators
FanDuel has spoken out against the planned tax rate hike as part of the Sports Betting Alliance. According to information for online gambling operators, the sportsbook operator is pushing Illinois players to oppose the tax increase.
Although Illinois’s tax rates are lower than the national average, advocates for the increase point out that the state would receive an additional $200 million in tax money because of the move.
Finding the right tax rate balance is crucial to avoid negative impacts, as FanDuel CEO Amy Howe emphasized.
