FanDuel Pushes against Tax Rate Increase in Illinois

Back in February, Illinois Gov. J.B. Pritzker introduced a proposed $52.7 billion state budget. Announcing the budget, the Governor said that it addresses a number of issues while providing funding for important initiatives, including education and economic infrastructure. Gov. Pritzker’s proposed budget included a proposed betting tax increase.

Currently, mobile betting is subject to a 15% tax on revenue. Land-based betting operators pay between 15% and 17% tax on their revenue. Compared to other states, the betting tax rate in Illinois isn’t that high. The highest tax rate out of all US states is in New York, where mobile betting operators are subject to 51% tax.

Still, the 15% tax rate on betting in Illinois may soon change, considering the proposed budget. Per the proposal, the levy on betting revenue would increase from 15% to 35%. According to the proposed budget, this increase would bring an extra $200 million in tax.

Understandably, not everyone agrees with the proposed tax hike. The leading betting and gaming operator, FanDuel, recently encouraged customers in Illinois to say “NO” to the proposed tax increase, a screenshot of a message from the sportsbook released by PlayIllinois reveals. The message was reportedly sent to FanDuel’s Illinois during the weekend.

In the message, the sportsbook wrote: “STOP THE SPORTS BETTING TAX HIKE! We NEED your HELP! The Illinois legislature wants to MASSIVELY increase the tax rate on your favorite form of entertainment – placing bets on the teams, players, and games that you love!” Moreover, the message encouraged customers to support the repeal of the tax increase with the following instructions: “Use the link below to tell Gov. Pritzker and your state representatives to say NO to a sports betting tax hike.”

Finding the Right Balance with Tax Rate Increases Is Important

In an interview for LSR, Amy Howe, FanDuel’s CEO, spoke about the company’s position toward tax rate increases. “Our government affairs teams do a really good job of trying to educate the regulators on how to get that balance right, because at the end of the day, the revenue to the state is really important,” she explained.

Still, Howe warned that increasing the tax rate may decrease competition. Additionally, she said that there are unintended consequences that may follow tax rate increases, such as pushing customers to the unregulated, black market. FanDuel’s CEO explained that such a transition is “not in the best interest of the state or consumers.” According to her, when it comes to increasing taxes, it is important for legislators and regulators to find the right balance.