Gov Pritzker Defends Sports Betting Tax Rise in Illinois as Fair
Following the decision in the US state of Illinois to raise the sports betting tax from 15% to a graduated top tax rate of 40%, Governor J.B. Pritzker says the sports betting companies are just paying their “fair share”.
Illinois defends its new increased sports betting tax.
LISTEN TO THIS ARTICLE:Gov. Pritzker proposed the 40% graduated tax over a week ago during a debate. This amendment was passed after a prolonged debate between legislators. This means the sports betting operators will be taxed between 20% and 40% depending on the company’s Average Gaming Revenue (AGR). DraftKings and FanDuel are the only two operators that will achieve the top 40% tax rate.
Many politicians in the state have expressed the opinion that some of the largest sportsbook operators in Illinois are bluffing when they threaten to quit and cease operations in the region.
It is estimated that the two operators in the state who will pay the most, FanDuel and DraftKings, made a combined profit of more than $729 million last year. Gov. Pritzker says the over $120 million extra revenue that would be achieved through the new graduated tax for the big two operators is a fair price to pay on these profits.
Gov. Pritzker believes corporations should pay their fair share in Illinois. Now, thanks to these adjustments, which put the state in line with similarly sized markets, they will.
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Sports Betting Alliance Warns of Impact of New Tax
Some Republicans and Democrats have joined forces to voice their concern over the level of the proposed tax on the sports betting companies. Especially as the sports betting industry in Illinois is a relatively new regulated market.
The leading sports betting operators in Illinois combined to form the Sports Betting Alliance to lobby legislators in the state against high taxes on sports betting revenues. Stakeholders in the gaming industry in the state say the changes could have a dramatic negative impact on revenue to the local economy and lead to job losses in the local community.
This tax hike doesn’t just threaten the legal, regulated sports betting market — it will have devastating effects for operators’ in-state partners, including the most vulnerable downstate casinos, who rely on sports betting revenue to create jobs and invest in communities.
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