If there is one activity whose popularity has endured across centuries and evolved with human behavior, it is gambling. From the primitive methods of gambling of the olden days, there is now the ability to gamble from anywhere in the world on an Instant casino using digital assets. You can even opt for an anonymous casino to protect your privacy and play more games than you can imagine.
But as these games continue to evolve, so do the laws that govern how we access them. Case in point, Illinois governor JB Pritzker has signed a new state budget for the Fiscal Year 2025. Part of this budget will see an increased tax rate for sports betting operators in the state.
This new tax rate is a rather stringent one, going from 15% to potentially 40%. Any revenue up to $30 million in adjusted gross revenue will be taxed at 20%, and additional revenue of up to $20 million will be taxed at 25%. Revenue from $50 million to $100 million will see a 30% tax rate, $100 million to $200 million will be taxed at 35%, and any revenue above $200 million will be taxed at 40%.
Such a spike in tax rates will mean that sports betting operators might be less generous with bonuses given to players and could charge higher fees themselves to keep up. This rate is also being implemented rather quickly, coming into effect from July 1, 2024.
It has, naturally not gone down too well with operators in the state. Organizations like the Sports Betting Alliance tried to appeal to the government but had their efforts rebuffed.
It also means that Illinois has joined others like New York and Delaware who charge very high tax rates for sports betting. In the wake of these new rates, some operators might opt to move to states with more favorable rates or operate offshore.
But, the governor believes that this new rate will help generate new revenue for the states and is worth it.
“I’m incredibly proud to sign our sixth balanced budget today. Our work advances fiscal stability while investing in the state’s future and putting money back in the pockets of hardworking Illinoisans. This is how we open up doors of opportunity for everyone for years to come,” he said in a Twitter/X post.
He has also expressed skepticism about operators leaving the state because of this tax rate, arguing that New York continues to have a thriving sports betting scene despite its own high tax rate.
This entire saga, however, shows the hurdles that gambling operators have to contend with. There are regions all over the world where gambling is outright illegal and when it is allowed, there are many requirements to become and remain licensed. In light of this new tax rate, it will be interesting to see how operators behave moving forward. Will they exit the state? Push the financial burden onto customers? Only time will tell.
