A new bill in Illinois aims to repeal the state’s controversial per-wager tax on online sports betting. House Bill 5143, introduced by Rep. Daniel Didech, seeks to end the tax on individual online sports wagers placed through licensed operators, effective July 1, 2026. The bill follows growing concerns from sportsbooks and operators about the impact of the tax on both their business operations and the state’s legal sports betting market.

Repealing the Per-Wager Tax

Illinois lawmakers initially implemented the per-wager tax in July 2025 as part of a broader effort to increase state revenue. Under the current system, sportsbooks are charged 25 cents per wager for the first 20 million bets placed annually, with the rate rising to 50 cents for wagers beyond that threshold. The tax is separate from the state’s graduated tax system, which charges operators a percentage of their revenue, ranging from 20% up to 40%, depending on the amount earned.

The per-wager tax was expected to generate an additional $36 million annually for the state. However, according to data from the Illinois Gaming Board, the tax led to a noticeable decline in sports betting activity, particularly in the months following its implementation. A report released in November 2025 showed a 15% decrease in the number of bets placed in the state compared to the previous year. This drop in betting activity was attributed to the per-wager charge by the Sports Betting Alliance (SBA), which represents major operators like FanDuel, DraftKings, and BetMGM.

While the Illinois Gaming Board reported a drop in the number of bets, the state’s overall sports betting handle continued to grow, suggesting that the decline was tied to the additional costs imposed by the per-wager tax. Sportsbooks have responded by increasing surcharges or raising minimum bet stakes to offset the tax, passing the cost onto customers. This adjustment has contributed to frustrations among both bettors and operators.

The introduction of the per-wager tax is part of a broader trend of increasing tax burdens on sportsbooks in Illinois. In addition to the per-wager fee, Illinois has one of the highest tax rates for online sports betting operators in the U.S. As of July 2024, the state implemented a graduated tax on operators’ adjusted gross revenue (AGR), starting at 20% for revenue up to $30 million and escalating to 40% for revenue above $200 million.

On top of the state taxes, Chicago imposes a 10.25% tax rate on online sports bets placed within the city limits, while Cook County adds an additional 2% tax. This cumulative taxation makes Illinois one of the most expensive states for sportsbooks to operate in, leading to calls for tax relief from the industry.

According to WCIA.com, Rep. Didech’s HB 5143 aims to alleviate some of this burden by eliminating the per-wager tax, which would give operators more flexibility and help encourage more bettors to engage with legal sportsbooks. However, this effort faces resistance from lawmakers who argue that the tax is a vital source of revenue for the state.

The Competing Forces Behind HB 5143

The debate over Illinois’ sports betting taxes is not limited to the state legislature. There has been significant pushback from sportsbooks and industry associations, who argue that the tax burden harms their ability to compete with illegal betting platforms. According to the SBA, the reduction in bets placed on legal sportsbooks is a direct result of the per-wager tax, which has driven customers to black-market sites and illegal bookies. This, in turn, undermines the state’s goal of creating a legal and regulated sports betting market.

While the state has experienced overall growth in its sports betting handle, the decline in bets placed within Illinois suggests that bettors may be opting for more affordable or accessible alternatives. This situation mirrors national trends, where illegal betting continues to siphon revenue from regulated markets.

Illinois continues to be a major player in the U.S. sports betting landscape, ranking second behind New York in total sports betting handle for 2025. Despite the recent drop in the number of bets placed, the state’s legal sports betting market remains robust. The state’s sports betting industry has grown rapidly since legalization, particularly in regions like Rockford, where mobile sports wagering has flourished.

However, the state’s high taxes and fees remain a challenge for operators. The passage of HB 5143 could signal a shift in Illinois’ approach to sports betting regulation, making it more competitive with other states. By eliminating the per-wager tax, Illinois would create a more favorable environment for legal sportsbooks, potentially drawing more players to licensed platforms and curbing illegal betting activities.