Story Reported By DePaul University’s Center for Journalism Integrity & Excellence
Online sports gambling is an increasingly lucrative industry, and the state of Illinois is cashing in, but the cost to play is quietly increasing.
With a vote in the General Assembly just hours before the end of the spring legislative session in May, Illinois became the first state in the country to impose a per-wager fee, which the DePaul Center for Journalism Integrity & Excellence (CJIE) found is already raking in millions of dollars for the state.
Even with those increased revenues, economists and bettors say the tax is tackling the wrong players in the booming industry.
In June, Gov. JB Pritzker signed House Bill 2755, creating the nation’s first online per-wager sports betting tax. According to the law, for the first 20 million wagers placed annually, sportsbooks will be charged a $0.25 fee per wager; with the fee increasing to $0.50 once that threshold is met. Reports submitted to the Illinois Gambling Board show the benchmark was reached in the first month, with the state raking in $5 million.
In response to the per-wager fee, CJIE found that sportsbooks have either raised minimum betting amounts or passed the tax directly onto bettors.
Unlike other sin or vice taxes, such as Illinois’ legalization of marijuana, the amendment to the Sports Wagering Act does not have any earmarked funds for the additional tax revenue. Instead, the revenue is first deposited into the Sports Wagering Fund, then the General Revenue Fund — essentially the state’s checking account.
A taxation timeline
When HB 2755 was first introduced in February by chief sponsor State Rep. Curtis J. Tarver II, the bill’s synopsis included in its title a designation for a statewide “Emmett Till Day” in remembrance of the 14-year-old boy from Chicago whose murder made headlines around the globe and became a catalyst for the civil rights movement.
Such practices by Illinois lawmakers are fairly common, and as HB 2755 continued through rounds of reading and amending, by the time it was signed into law, all references to Till disappeared from the eventual 1,283-page revenue reform omnibus bill.
“That is business as usual,” said political observer Delmarie Cobb. “Even in Washington, as we know, they hide things in other bills and hope … that those bills will get passed because they’re not as controversial.”
A spokesperson for the Illinois General Assembly told CJIE “it is not uncommon for bills originating in the House to be amended in the Senate, and vice versa.”
Despite multiple requests for comment, none of the co-sponsors of HB 2755 answered questions about the amendments to the Sports Wagering Act, including the bill’s chief sponsor State Rep. Tarver II, and Senators Celina Villanueva and Napoleon Harris III.
The final House vote on May 31 passed HB 2755 with 71 “yeas” to 43 “nays”, according to the state assembly, with all opposing votes coming from Republican representatives.
Opponents cry foul
After the bill was introduced, the Sports Betting Alliance (SBA), an industry lobbying group that represents DraftKings, FanDuel, BetMGM and other popular sportsbooks, launched a campaign to fight the unprecedented tax.
The SBA sought to shape the narrative around what the flat-rate tax would mean for sports bettors and operators alike, ultimately claiming the SBA’s opposition campaign resulted in lawmakers receiving “nearly 100,000 emails” against the per-wager tax.
“This discriminatory, punitive and constitutionally suspect tax increase on legal sportsbooks who have invested more than a billion dollars in the state will be destabilizing for regulated sports betting in Illinois,” the SBA said in a press release.
The “IL New Wager Fee: Tell Lawmakers How It Hits You” initiative was publicly endorsed on social media by former New England Patriots tight end and current FanDuel ambassador Rob Gronkowski. The group invited everyday fans to tell their legislators how the tax would alter their betting experience.
The campaign focused mostly on small-dollar bettors who see wagering as entertainment rather than a potential livelihood. Bettors were invited to record short videos, highlighting how the new tax may drive them to bet illegally across state lines or on unregulated platforms.
“I am very disappointed about the tax on betting. As a result, I pretty much have stopped betting on DraftKings,” said Jeff, an Illinois resident who did not want his last name published, in one of the short videos obtained by NBC 5 and the DePaul CJIE. “I have some offshore accounts that I’m using now, and I probably won’t be betting on DraftKings anymore.”
While the SBA was focused on keeping the government from cutting into profits of the sportsbooks that they represent, the group argues the voices that they were able to gather speak loudly to the potential behavioral effects of Illinois’ novel tax.
An influx of cash for Illinois
The per-wager tax is undoubtedly a welcome new source of revenue for Illinois, bringing in more than $21 million since becoming law, according to reports filed with the Illinois Gambling Board.
That total, which accounts for tax revenue from the start of NFL and NCAA football seasons, does not include tax revenue for the NBA and NHL regular seasons that had yet to start when the most recent reports were released to the public.
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An analysis of sportsbooks’ reports by CJIE revealed that more than 68 million online wagers have been placed on professional sports alone since the revised law kicked in. Those bets account for a fraction of the $13.18 billion of total dollars bet in Illinois over the past year from Aug. 2024 to Aug. 2025.
Even before the new law, Illinois already had the fifth-highest tax rate on sports betting in the country, according to our analysis of nationwide tax-rate data.
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Local limitations
Sports betting is a burgeoning industry in Illinois, and the increased popularity of online platforms is no surprise. There are only 15 brick and mortar sportsbooks in Illinois, with DraftKings at Wrigley Field serving as the only such outlet within Chicago city limits.
With the early returns yielding lucrative results for Illinois, it’s no surprise that other states and municipalities are looking to follow the state’s lead to cash in on the massive popularity of online sports gambling as a solution to their own budget woes.
The city of Chicago appears to be one such municipality, as local sports bettors may have to contend with even higher taxes in the near future if Chicago Mayor Brandon Johnson has his way.
Mayor Johnson’s proposed budget recommendations for 2026 include additional taxes on online sports wagering, and while final votes are not set, Chicago may become the first city in Illinois to have their own such tax.
Chicago’s tax, which is one of 89 proposed revenue increases from Johnson’s Chicago Financial Future Task Force, balances the sports wagering tax to Chicago’s existing amusement tax; both will be taxed at 10.25%.
The city already taxes in-person sports wagering at 2%, which will also be raised to match the online rate. In all, the budget proposal estimates roughly $26 million of tax revenue from online sports wagering, which would chip away at the $1.1 billion budget deficit facing the city, according to a task force estimation.
Members of Chicago’s budget task force and its chairs, Karen Freeman-Wilson and Jim Reynolds, declined to comment on the tax.
Lawmakers who backed Illinois’ per-wager tax have also moved to block similar measures at the
local level. Recently proposed House Bill 4171 would further amend the Sports Wagering Act to prohibit municipalities from imposing additional wagering taxes.
Introduced Oct. 20 by Rep. Daniel Didech and sponsored by Rep. Curtis Tarver II — the lead sponsor of the earlier HB 2755 — the bill has bipartisan support but has not advanced since its filing. A vote has not yet been scheduled, and Didech did not respond to requests for comment.
Health hazards also a concern
While the state’s tax has already brought in millions for the state, gambling experts raise questions about the bill’s price beyond dollars and cents. Noah Henderson, a sports economics professor at Loyola University Chicago, said the tax is “regressive,” disproportionately affecting lower-income and small-scale bettors.
“I think that as far as the state’s concerned, they’ve brought in sports gambling primarily to have a tax base and grow the tax base,” Henderson said. “If you’re only placing (a) $5, $10 (wager), you can see how big of a percentage of your wager is going to be impacted by this tax as opposed to someone who’s routinely placing larger amounts.”
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The effect is especially significant for parlays, Henderson adds, which combine multiple wagers that must all win in order to pay out. He said this type of gambling is popular with small-scale bettors chasing big payoffs, but is riskier than typical straight bets.
“The amount of money the house — DraftKings, FanDuel — anticipates making can be six times as large on a parlay as it is on one of those individual straight bets,” Henderson told the DePaul CJIE. “If you have ever used one of those applications, you’re likely to see them push you towards … smaller microtransaction bets.”
Still, whether it is a straight bet or a multi-legged parlay, the per-wager tax heavily impacts one thing important to both casual and frequent bettors: the bottom line.
While bettors are ultimately trying to make money while watching sports, users are frequently hooked on the product in an addictive fashion, a unique trait of the billion dollar industry that Henderson said legislation has yet to catch up with.
“Sports gambling got legalized quite rapidly, and it feels like the regulation often lags behind in a way,” Henderson said.
Mental health experts warn the tax may also intensify gambling-related harm
Chris Tuell, the Clinical Director of Addiction Services at the Lindner Center of Hope in Cincinnati, notes the dangers of Illinois profiting off of one of the nation’s most problematic addictions.
“Out of all addictive behaviors — drug, alcohol and behavioral addictions like gambling — the one with the highest suicide rate by far is problem gambling,” Tuell said. “And yet we’re normalizing it more than ever.”
Tuell noted that online gambling is specifically prevalent among younger men.
“About 25% of men under the age of 30 have placed bets online,” Tuell said. “Of that, about 10% have problem gambling.”
That’s the same odds as being left-handed, Tuell added.
“About 25% of men under the age of 30 have placed bets online. Of that, about 10% have problem gambling.”
Chris Tuell, Clinical Director of Addiction Services at the Lindner Center of Hope in Cincinnati
He and Henderson both linked the prevalence of young males gambling to the phenomenon of loot boxes and microtransactions in video games, which mirror gambling trends in a way that minors are legally able to engage with.
“We’ve normalized the behavior at times, (and have) shown it to younger audiences,” Henderson said.
Henderson thinks that, economically speaking, the Sports Wagering Act is like any other excise tax.
“You’re giving people autonomy to use something that’s probably not good for them,” Henderson said. “You need some sort of excise tax to offset the negative costs that come with it. Hopefully the revenue is used for education, problem gambling literature and informing high schoolers about the risks associated with sports gambling.”
NOTE: This story was reported by Peter Jurich, Bing Wang, Francesca Corona, Jake Cox, Laura Vázquez David, Sofia Joseph, Anna Barth, Jeremy Battle, Laine Wyatt, and Riley Sommers
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