What the $0.25–$0.50 Fee Means for Bettors and Operators
The online betting industry is always changing, especially in the last couple of years, where we’ve seen new laws that changed how we place bets (literally). But in Illinois, things are taking a new turn, and it is something that’s totally new and confuses bettors even more.
Not too long ago, Illinois rolled out a groundbreaking adjustment to its sports wagering tax structure. They introduced a new per-wager excise tax for online and mobile bets. But for you and me, this doesn’t mean much. Bettors are confused and are wondering whether the money will come out of their pockets.
The state will now charge operators $0.25 per wager for the first 20 million bets placed annually, and $0.50 per wager thereafter. This makes Illinois the first U.S. state to adopt this per-bet taxing scheme.
But let’s dig deeper and find out how it works.
Why the Change, and Why Now?
Is Illinois up to something with this new change? Or is this only going to negatively affect the betting industry? Well, this tax was embedded in Illinois Public Act 104-0006, which is part of a broader $55 billion state budget signed into law in mid-June 2025 by Governor JB Pritzker.
They faced a $1 billion budget gap, which is why lawmakers acted swiftly, botting on the measure just before a procedural deadline, just to ensure it passed before requiring a supermajority.
This move adds to last year’s progressive revenue tax (up to 40%) and brings anticipated annual excise revenue to roughly $36 million. But who is hurt by this change?
Fortunately, bettors are safe, because Illinois aims this law at operators (or are they?). In other words, they have to pay a lot more money in taxes this year, especially large ones with more than 20 million bets annually.
What’s the Impact on Operators?
So, for major sportsbooks that are processing well over 20 million Illinois bets annually, this means that they will face a full $0.50 per wager surcharge. Analysts estimate that this will cut their earnings in 2026 by tens of millions.
Other, less popular operators will pay lower amounts since they are in the $0.25 rate.
Many of them are unhappy with this change. Even the Sports Betting Alliance (which represents these companies) criticized the tax as disproportionately burdensome to recreational bettors. They even say that this could drive bettors towards unregulated offshore platforms, where the state will lose most of the tax revenue.
But how will this impact bettors, and why would they go to an offshore sportsbook since they aren’t the ones affected? Maybe sportsbooks already found a way to pass this tax expense to bettors, who knows?
How Bettors Will Feel the Pinch
Well, that’s exactly what happened. Major online sportsbooks already announced a $0.50 transaction fee on every online wager in Illinois starting September 1, 2025. Other lower-volume sportsbooks also passed their tax obligations as fees to end users and charge $0.25 per bet.
Some even went on full creative mode and introduced minimum wager thresholds (example $3 bets) just to reduce the number of taxed bets they take in. This means that bettors still have to pay fees, even if they lose the bet.
Is This Sustainable?
Critics argue Illinois is pushing too hard. With online gambling booming at the moment, over 1.3 billion bets placed and $50 billion wagered since legalization in 2020, skeptics warn that heavy fees could stifle growth, reduce promotions, and incentivize users to leap into illicit markets.
Indeed, the Sports Betting Alliance claims the per-bet excise may drive casual bettors away, undermine legal operators, and ultimately undercut the broader tax base it was meant to bolster.
What to Expect Next
- Larger operators will continue absorbing the higher tax and shifting costs to customers.
- Smaller platforms may maintain loyalty by promoting lower fees and minimal wagers.
- The state aims to raise $36-40 million annually from this tax, feeding its general revenue fund via the Sports Wagering Fund.
- Legislators and advocates might push for revisions if evidence shows sporting activity migrating underground.
- Some operators, are considering exiting the Illinois market if margins deteriorate, though none have made public plans to do so yet.
Final Thoughts
Illinois’s new per-wager tax marks a major shift in how the state monetizes sports betting. At $0.25 to $0.50 per online bet, it directly affects both operators and bettors, especially those who place frequent, small-dollar bets.
While the state projects significant new revenue, the industry warns this could chill casual play, reduce promotional offers, and push gamblers toward unregulated markets.
Nobody knows how this will affect the entire industry. But both the state and operators need to be cautious. Why? Well, in most cases, aggressive taxation may bring short-term gains, but risk long-term participation and the overall industry health.
