Illinois sports betting tax hike leads to more revenue, fewer wagers
Sports betting revenue is growing in Illinois despite the state’s tax hike on sports betting and related wagers, bringing in over $56 million in tax revenue in October 2025 alone while the raw number of wagers decreses.
The Illinois Gaming Board (IGB) has 10 licensed sportsbooks operating in the state that managed to accumulate $1.6 billion in bets combined in the month of October alone. Here is how the state’s sports betting tax has shaped gambling activity in the last few months of 2025, from raw revenues to the number of bets made, and what it may mean for the future of betting in the US state of Illinois.
Illinois’ pre-wager tax is latest increase
In 2024, Illinois introduced a tiered system for gross revenue tax on sportsbooks. With this drastic change, licensed sportsbooks saw their taxes increase, especially the most successful online betting sites. The tiered system goes up to 40% on adjusted gross income (AGR) of over $200 million, which the state’s top operators are almost at. In AGR alone, Illinois collected $41.5 million in October 2025.
But that’s not the only way that Illinois has been taxing the online betting industry. Illinois implemented a pre-wager tax in July 2025. It’s 25 cents per wager for the first 20 million wagers. Multiple sportsbooks passed that threshold in September and then had to pay 50 cents per wager.
How is Illinois’ increased tax impacting sports betting activity?
While Illinois made more in October 2025 than it did in October 2024 by 11%, the actual number of individual wagers being placed has declined since the revised implementation. In fact, the volume of wagers has fallen by the millions, with Illinois residents placing fewer bets per month.
The reason? Sportsbooks aren’t as cheap anymore. After the per-wager tax was implemented, many sportsbooks started requiring a service fee on customer bets. This began in September 2025, when the amount of wagers started declining. This hardly seems like a coincidence.
Despite Illinois’ existing, and increased, taxes on gambling, some areas are costing sportsbooks and residents even more. Cook County charges 2% on all wagers placed in that region. Chicago, a city within Cook County, is hoping to push forward an additional 10.25% tax on sportsbooks’ revenue. The Sports Betting Alliance has been fighting back against this law, which will lead to a hearing in March 2026.
Initially, the city of Chicago hoped to make sportsbooks pay $50,000 for a Chicago-specific license ahead of 2026, but the SBA pushed back over the ambiguous wording and confusing process that could result from it.
Illinois Representative Dan Didech, the chair of the House Gaming Committee, was one of 30 signatures opposing Chicago’s local tax.
Didech has offered that taxes so high as to become “cost-prohibitive for gamblers” would lead players to pursue overseas alternatives instead, where sports betting and esports betting sites are “untaxed and unregulated,” making it a potential problem for both players and for the state’s government.
With Illinois already seeing a decline in gambling activities as tax increases and service fees, the SBA and others will likely continue to fight back against any additional taxes. Illinois saw more money from collecting more tax, but that may only last so long if gamblers decide to take their wagers elsewhere.
Featured image credit: US State Department
Olivia has worked in media ever since graduating from college, with her coverage ranging from traditional newspaper reporting to digital coverage of all things gaming, online betting, and nerd culture. She has traveled around the world pursuing that coverage, from the far coasts of the United States to the busy downtown core of Tokyo, Japan. Olivia’s favorite games include Overwatch and Super Smash Smash Bros, and she has been published at Esports Illustrated, Inven Global, EsportsInsider, Upcomer, and elsewhere.
View full profile