Illinois
Analyst warns Illinois betting tax hike could trigger similar moves in other states
The decision by lawmakers in Illinois to push ahead with an increase in sports betting tax could push other states across the US to take similar action, an analyst from consultancy B Global has warned.
Last week, the Illinois house of representatives passed a progressive wagering tax rate. This will see the state’s most prolific sports betting operators pay tax at 40%, a sharp rise from the current rate of 15%.
The new-look structure sets rates at between 20% and 40%, depending on each operator’s adjusted gaming revenue (AGR). Operators posting more than $200m (£157m/€184m) face the highest rate of 40% – second-highest tax rate in the US behind New York at 51%.
Other boundaries include a 20% tax rate for operators with an AGR of under $30m, 25% for between, 30m and $50m, 30% for AGR ranging from $50m to $100m, and 35% for AGR of $100m to $200m.
The proposal, which forms part of the FY2025 budget in Illinois, is now with Illinois governor JB Pritzker for sign-off. Should Pritzker decide the pass the law, the new rates will come into effect from 1 July.
Potential knock-on effect of betting tax increase
Brendan Bussmann of B Global, a consultancy serving the gaming, sports and hospitality industries, has now tabled further concerns through a note from Truist. These primarily relate to the knock-on effect the increase could have, saying further states could follow suit with similar increases.
“With Illinois the second state to increase its tax rate [after Ohio raised its rate from 10% to 20% in 2023], investors have an increased concern around contagion,” Bussmann said.
Singling out other states, Bussmann highlights recent activity elsewhere that could signal a move to higher taxes. Massachusetts considered a hike this year, though it was quickly rejected, with Bussmann saying this is unlikely to pass in the future.
Bussmann said there has also been talk about a hike in New Jersey. However, he believes this is unlikely given how seasoned the state is with governing gaming policy. In addition, he referenced Pennsylvania as a possible candidate, but said attention here is more likely to be on the proliferation of skill-based games.
Higher taxes punish largest contributors in Illinois
Bussmann, himself a proponent of lower tax operating environments, also criticised Illinois for going after the most lucrative operators. He noted how the higher tax rates will hit the operators that already contribute the most tax revenue in the state.
He also warned that pushing tax up could have a negative impact on the overall market in Illinois. With operators facing higher costs, this may see them withdraw promotions, cut back on their offering and offer worse odds.
DraftKings and FanDuel Group’s parent company Flutter Entertainment both saw their stock price declinewhen the plans were announced. DraftKings and Flutter would be facing the highest rate of tax, with both having AGR un excess of $200m.
In addition, Bussmann went as far to say as the rise would be most beneficial for offshore betting operators. As these brands do not pay tax, any potential exit of licensed operators from the market would push more traffic their way.
What is happening elsewhere?
Longer-term, Bussmann worries states yet to legalise betting will institute higher tax rates at conception without understanding industry dynamics.
Among the states yet to legalise wagering are Minnesota, which ran out of time in the latest legislative session, Georgia, and Missouri, where a ballot initiative aimed at this November’s ballot will likely fae strong opposition from land-based casinos.
Bussmann said California and Texas continue to be key states to watch, given their size and the potential impact on the overall legal gambling picture in the US. According to Bussmann, California is having productive conversations around sports betting being on the ballot in 2026. However, he adds that a 2028 move is more likely, given ongoing tribal opposition.
As for Texas, opposition from Governor Greg Abbott to legal gambling means any move is not likely for several years, perhaps as far ahead as 2027.
Elsewhere, Bussmann notes the decision by the DC Office of Lottery and Gaming to switch from Gambet DC to FanDuel. This, he says, has seen an immediate pickup in traction – to the point where there is now talk of opening up the market to other operators.
Could we see more legal igaming?
Away from sports betting, Bussmann acknowledges an effort by Arkansas to consider legal igaming earlier this year. However, this ultimately came to nothing, with Bussmann saying legalisation is not likely to be imminent,
Maryland also failed to get igaming across the line during the last session, though continues to face budget constraints potentially driving the conversation.
In addition, Illinois itself remains a candidate for legalising igaming, with Bussmann expecting the state to make a move at some point. However, he recognises how other legal activity in the state could slow progress.
Alongside the higher sports betting tax, Illinois faces expanding video gaming terminals into Chicago and Bally’s building a land-based casino in the downtown region.
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Previewing the Illinois high school football state championship games
Top-ranked Loyola’s offense has three primary plays: running with Drew MacPherson, passing to MacPherson and running with quarterback Ryan Fitzgerald.
The key blocker on most of those Fitzgerald runs? MacPherson.
“[MacPherson] has breakaway speed,” Ramblers coach Beau Desherow said. “He’s also a really good receiver. His ability to block isn’t talked about enough. He’s a devastating blocker. He is a totally selfless player that will do whatever it takes to win.”
MacPherson leads Loyola (11-2) in touchdowns (19), rushing yards (1,038) and receiver yards (678). The Iowa recruit will be a major focus of York’s defense in the Class 8A state championship game at ISU’s Hancock Stadium on Saturday at 7 p.m.
On the other side, the key is Bruno Massel. The Dukes’ quarterback may be the fastest in the state. The senior qualified for the Class 3A state track finals last spring in the 100 meters and 4×100 relay, earning a medal in the latter.
Massel vs. Loyola’s stout run defense is the matchup that could decide the game. Mount Carmel and Lincoln-Way East, programs that pride themselves on consistent running attacks, didn’t even attempt to succeed on the ground against the Ramblers this season.
The Griffins called just four rushing plays in the semifinals against Loyola and the Caravan ran nine rushing plays in a Week 9 loss to Loyola.
“We take away the run pretty early,” Desherow said. “Our defensive line has done an amazing job and our linebackers have stepped up. They are players. Max Mendoza had an amazing game [vs. Lincoln-Way East].”
This is the first title game appearance for York (11-2) The Ramblers, Mount Carmel in 7A and Nazareth in 5A are attempting to three-peat and all are favorites.
Class 7A: Batavia (12-1) vs. Mount Carmel (10-3), 4 p.m. Sat.
This is a rivalry, but one-sided. Mount Carmel has ended Batavia’s last four seasons.
“The first time was a war,” Bulldogs coach Dennis Piron said. “The last three we had things happen in the first quarter and it got out of hand.”
The Caravan is young overall but has solid veteran leaders on both sides, including quarterback Jack Elliott and linebacker Matt Mucha.
“I’m the head coach but it is Jack Elliott’s team,” Mount Carmel coach Jordan Lynch said “It is not what I’m comfortable with it is what the kids see and what the kids trust. He comes with his own game plan on what we should run.”
Mucha has led the Caravan in tackles the last two seasons.
“Our defense is peaking at the right time,” Lynch said. “Mucha is the best linebacker in the state and will be one of the best players on the field Saturday.”
Batavia’s top weapon is senior running back Nathan Whitewell, who has rushed for 1,669 yards and 27 touchdowns. The Caravan is allowing 22 points a game this season and the Bulldogs’ best chance at an upset may be to get in a high-scoring shootout.
Class 6A: Geneva (12-1) vs. East St. Louis (12-1), 1 p.m. Sat.
The Flyers dominated Loyola in Week 1 and their only loss was 14-13 to IMG Academy, a prep school powerhouse from Florida. East St. Louis is the best team in the state.
Flyers’ quarterback Kendrick Lyons has thrown for 2,402 yards and 31 touchdowns. Keandre McClendon leads the team with 12 sacks.
Geneva counters with perhaps the most talented player in the state, Georgia recruit Talyn Taylor. The senior wide receiver has scored 27 touchdowns.
Class 5A: Nazareth (11-2) vs. Joliet Catholic (10-3), 10 a.m. Sat.
This could be the best game of the weekend. Nazareth is loaded with stars including quarterback Logan Malachuk and linebacker Gabe Kaminski. The Roadrunners have a special group of receivers in Garrett Reese, Jake Cestone, Trenton Walker and James Penley.
“Kaminski is a four-year starter and an awfully fun kid to watch,” Nazareth coach Tim Racki said. “He plays football the way it is meant to be played.”
The Hilltoppers don’t have a major star, just a lot of experience. It’s a testament to the strength of the program, which is tied with Mount Carmel for the most state titles, that it has advanced to another title game.
“This is probably the toughest schedule that I’ve been around as a coach or when I played here,” Joliet Catholic coach Jake Jaworski said. “We have definitely learned from those three losses.”
Running backs Larry Stringham (14 TDs) and Nate Magrini (13 TDs) lead the Hilltoppers’ attack.
Class 4A: DePaul Prep (10-3) vs. Mt. Zion (10-3), 7 p.m. Fri.
The Rams’ Cinderella run to state is the best story of the playoffs. DePaul Prep has a daring offense, led by daring quarterback Juju Rodriguez, running back Nick Martinez and receiver Braden Peevy.
Mt. Zion is a regular playoff contender but this is its first title game as well.
Class 3A: Montini (11-2) vs. Monticello (11-2), 4 p.m. Fri.
Montini’s losses this season are to larger Catholic League powers Marist and Fenwick. The Broncos, led by quarterback Israel Abrams (1,778 passing yards, 24 TDs) are heavy favorites.
Class 2A: Chicago Christian (12-1) vs. Maroa-Forsyth (12-1), 1 p.m. Fri.
The school from Palos Heights led by first-year coach CJ Cesario could have its hands full with the Maroa-Forsyth, one of the state’s traditional small school powers. The Knights’ offense is well-balanced with Christian Flutman throwing for 23 TDs and Kenny Jager rushing for 27.
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