Proposed tax hike for Illinois sports betting receives serious pushback
A group of major commercial sports betting operators have joined forces to block attempts to hike taxes in Illinois.
Gov. JB Pritzker has tabled a $52.7 billion budget for the coming fiscal year, and contained in it, are details about a steep 20-percentage point to bolster taxes from 15% to 35%.
Understandably, this has not gone down well with the Sports Betting Alliance (SBA), which represents some of the US’ biggest brands, such as BetMGM, DraftKings, and FanDuel.
The threat is tangible enough that the SBA has persuaded consumers to engage with state lawmakers to advocate against a tax hike.
According to the SBA, roughly 25,000 emails have been fired off to the Illinois legislature and Gov. Pritzker to express their disgruntlement.
There are, of course, implications for a tax rate increase. The SBA fears that bettors will have less favorable odds, be limited in terms of promotions and bonuses available, and there could be a potential uptick in the activity of illegal offshore betting.
As things stand, Illinois legislators have until the end of the month to vote on the proposed tax raise, and SBA spokesperson Nathan Click has already voiced his concerns.
He said: “SBA companies entered Illinois with the understanding that would be operating under a 15% tax rate. All of them are currently operating in the red, but are still investing in the state based off long term potential under a 15% tax rate.
“Doubling the tax rate massively, that changes the calculus — and basically makes these investments exceedingly harder to recoup — much less turn a profit.”
But Illinois isn’t an isolated case. More tax hikes are looming on the horizon across the US.
New Jersey is considering raising its taxes for sports betting to 30% from 14.25%, while Washington D.C. is also mulling over the prospect, and the local council thinks this could create a more competitive marketplace.
The subject of a tax hike isn’t palatable in Illinois, and inevitably, it will be a thorny issue.
While it may seem like Illinois sports betting operators are staring down the barrel, all is not lost just yet.
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