Illinois Sportsbooks Pot $71.3 Million for July as New Tax Rates Take Hold

The Illinois Gaming Board reported $71.3 million in adjusted gross sports betting revenue for July on Thursday, the first month the state's new progressive tax rates took effect.

Gov. JB Pritzker changed the rates from a flat 15% to revenue-based tiered ones that begin at 20% when he signed the Fiscal Year 2025 budget into law in late May. He originally proposed more than doubling the rate to 35% in February to generate an estimated $200 million in revenue for the state, but the progressive tax rate proposal entered the mix late in budget negotiations.

The Sports Betting Alliance, which includes top Illinois mobile operators FanDuel and DraftKings among its members, voiced strident opposition to the new tax rates during the budget process. FanDuel and DraftKings are likely to be most impacted by the progressive rates, as they are the only two projected to reach the highest 40% tier that kicks in after $200 million in AGR during a fiscal year.

DraftKings CEO Jason Robins last month planned to place a surcharge on winning bets as a countermeasure — Illinois was one of four states Robins targeted along with New York, Pennsylvania and Vermont — but his idea was widely panned on both social media and by financial analysts. No other mobile operator was willing to follow his lead, and Robins eventually stood down after FanDuel's parent company Flutter said it had no plans to follow suit.

The 20% floor, though, did provide an initial boost to Illinois coffers, as they collected close to $14.3 million in receipts. That is $3.6 million more than what the previous 15% rate would have provided. Additionally, FanDuel and DraftKings are already on the edge of progressing to the 25% tier, which starts when an operator reaches $30 million AGR.

There is also a chance both may be taxed at 30% for a portion of their August winnings, as that rate kicks in at the $50 million threshold. FanDuel is the more likely of the two to reach that benchmark first after claiming $28.6 million in July winnings compared to DraftKings' $23.6 million.

The Parlay Train Rolls On

As is the norm in Illinois, more than half of operator revenue was derived from parlay wagering. The overall hold for the multi-leg bets was 19.3%, as the house won $40.4 million from $208.9 million in completed events handle. FanDuel's mobile book accounted for more than half that haul, reaping $20.2 million thanks to a 23.3% win rate against close to $87 million wagered.

DraftKings was a distant second at $11.5 million, attaining a 17.2% hold from $67.2 million handle. Two other mobile sportsbooks, Fanatics and Caesars, posted parlay holds above 20% as they claimed $2.6 million and $1.2 million, respectively.

Six of the eight mobile sportsbooks in Illinois had at least $1.2 million in parlay revenue for July; bettors limited BetMGM to a 3.9% hold and $483,200 in revenue, while Circa Sports came out $18,400 ahead after accepting $533,900 in bets placed.

The overall statewide hold of 9.2% contributed to an 18.1% rise in revenue from July 2023, which lagged behind the 26.6% bump in handle to $773.7 million. Revenue dipped 24.6% compared to the $95 million reported for June, as the hold was nearly two percentage points lower. Despite July's hold being more than two percentage points above the 7% industry standard, it ranks as the third-lowest of the 31 states to report figures for the month, with only Arizona outstanding.

Overall, FanDuel finished with an 11.1% hold against $258.1 million handle, while DraftKings landed at 8.5% while taking $277.8 million worth of wagers. Fanatics claimed the final podium spot for revenue with $5.2 million, leading the eight mobile books with a 10.3% hold while generating $45.8 million handle.

BetRivers was third for handle with $50.5 million and crafted an 8.9% win rate to claim nearly $4.5 million. ESPN BET rounded out the top five for revenue with $3.2 million thanks to a 10.8% hold on $29.5 million handle, while BetMGM did likewise for handle at $45.2 million. BetMGM, though, took only $2.6 million in winnings with a 5.7% hold.

Caesars finished just shy of $2.5 million in revenue, fashioning a 7.8% win rate. Bettors eked out a small win against Circa, coming out $26,300 ahead while wagering nearly $10.7 million.

Baseball Provides an Eight-Figure Windfall

Looking beyond parlays for sport-specific figures, operators won $11.4 million in baseball bets, as they notched a 5.3% hold from $214.7 million handle.

Tennis ranked second at just shy of $5 million, with completed events handle reaching nine figures for the first time at $100.3 million. Soccer ($4.4 million), the catch-all "other" category ($4.2 million) and basketball ($3.9 million) rounded out the top five.

The Grant Park 165, NASCAR's street race held for the second straight year in Chicago, did not stoke as much interest as 2023. Total motorsports handle dipped 17.7% to $1.4 million, but Aaron Bowman's victory was good to operators. It helped create a 23.1% hold, as the $321,000 in revenue represented a 29.6% increase.