Illinois Sports Betting Handle Surges to $878 Million for August

The Illinois Gaming Board reported nearly $878 million in traditional sports betting handle for August on Friday as sportsbooks in the Land of Lincoln had a middling performance.

The completed events handle was $865.2 million, with the difference likely represented by college and NFL futures wagering. Traditional handle was up nearly 30% compared to August 2023 and 13.5% from the $773.7 million reported in July. Illinois will likely finish August second to New York for handle as only Arizona has yet to report figures for the month.

Operators, which included Hard Rock for both retail and mobile betting after their late August debuts, totaled close to $59.2 million in adjusted gross revenue. That was an increase of 26.1% from 12 months prior, but also down 17% from July as the 6.7% hold was nearly 2.5 percentage points lower.

Despite the sharp month-over-month decrease in revenue, taxes only declined by 4.3% to $13.6 million. The state's progressive tax rates, introduced with the start of the fiscal year July 1 after being voted into law in late May, start at 20% and can reach as high as 40% based on revenue thresholds for operators.

Let the Grousing About Tax Rates Begin

The progressive tax rate — which was different than the straight proposal of more than doubling the rate from 15% to 35% that Illinois Gov. JB Pritzker initially asked for in February — also met with much consternation from mobile operators, notably FanDuel and DraftKings as they would be the ones most impacted by reaching the higher revenue thresholds as the state's two operators.

Illinois' new rates were an impetus for DraftKings CEO Jason Robins' widely panned counter in early August to place a surcharge on winning wagers in the state to claw back some of that lost revenue in four states where tax rates were above 20%. Robins stood down less than two weeks after his announcement when no other operator was willing to join his cause.

Original projections showed both FanDuel and DraftKings having the likelihood of reaching the maximum 40% threshhold — done by accumulating $200 million in AGR during a fiscal year — and already both mobile titans have triggered rate rises. FanDuel had $20 million of its $21.6 million taxed at 25% after crossing the initial $30 million threshhold, and it edged into the 30% bracket with $50.2 million in winnings in the first two months.

DraftKings also progressed into the 25% tax bracket after leading Illinois mobile books with $22.3 million in revenue, lifting its overall total to $45.8 million. By moving through their respective tax brackets, DraftKings and FanDuel have already paid $6.6 million more in taxes than they would have at the previous 15% rate.

Given the nationwide rout sportsbooks enjoyed in September coupled with a notable year-over-year rise in handle further pumping revenue numbers higher, it would not be surprising to see both operators have a portion of their September winnings taxed at 35% by surpassing $100 million in fiscal year revenue.

Hard Rock Debuts and Fanatics Surges to Third for Handle

Illinois welcomed its ninth mobile sportsbook in late August with the launch of Hard Rock Bet, coinciding with the Seminole tribe opening a casino in Rockford. Hard Rock Bet generated $1.6 million handle in its first six days of business, with bettors coming out $10,100 ahead in the early going.

Among the legacy sportsbooks, there was a shuffling of the order for handle as Fanatics Sportsbook roared into third place ahead of BetRivers, the first book to take mobile bets in Illinois. Fanatics' $62.7 million in traditional handle was its most since entering the state in April and the most for a licensee tethered to Hawthorne Race Course since predecessor PointsBet had a $72.7 million handle in January 2023.

It is not the first time BetRivers has been knocked off the podium — ESPN BET did so in December as part of its national rollout with a heavy promotional spend in reaching $96.5 million in action. But sustaining that momentum has proven challenging for the PENN Entertainment-owned sportsbook: ESPN BET finished seventh in handle in August with $32.2 million, which was only 9.9% better than predecessor Barstool Sportsbook at the same time last year.

BetRivers, though, did claim the final podium spot for revenue with $4.4 million, putting a 7.4% hold on $59.5 million in completed events wagering. FanDuel had the highest hold of the group of nine, but it was low by its standards at 8.2%. BetRivers was the only other operator to clear the 7% industry standard, while DraftKings came up just short at 6.9%.

Fanatics was a clear fourth for revenue with $3.6 million, while BetMGM rounded out the top five at $2.1 million. Caesars edged ESPN BET for sixth with $1.9 million despite a 4.7% win rate on $40.6 million in handle. Bettors got the better of Circa Sports for a third consecutive month, pocketing $443,100 above the $12.7 million in accepted wagers. Circa has paid out $482,800 above wagers accepted in that three-month span, with August's loss dropping it below $1 million in year-to-date revenue.