Illinois passes increased sports betting tax, FanDuel adds 'transaction fee'

SPRINGFIELD, Ill. (WAND) - When the fiscal year 2026 budget passed a couple of weeks ago, so did an increased tax on sports gambling in the state of Illinois.

The tax is on sportsbooks that operate in the state. The two biggest ones are DraftKings and FanDuel.

In the new budget, each sports bet placed through each sportsbook will be taxed $0.25 for the first 20 million wagers at each book. After that, the tax increases to $0.50.

DraftKings and FanDuel will likely surpass 20 million bets in the state over the course of a calendar year.

Although the companies will be responsible for paying the tab, the cost will be passed onto the individual bettor.

State Senator Chapin Rose (R, Champaign) voted against the budget and says the tax is not meant as a deterrent to gambling, but as another revenue stream for the state.

"They're happy to cash the tax check, but they didn't really solve a problem," Senator Rose said. "That belies the fact that this really is about nothing other than a cash grab."

On Tuesday, FanDuel's parent company Flutter announced it would charge a $0.50 'transaction fee' on all bets made in Illinois starting September 1, just before the start of football season.

In a statement, Flutter said, "The introduction of this fee by the state follows a substantial increase in the betting tax rate in Illinois in 2024. Following the 2024 increase, extensive efforts were made by FanDuel to absorb the cost fully without impacting customers."

The company also said it would rescind the fee should the state reverse course.

Those who make higher wagers will not feel the fee as much as those placing $1 or $5 bets.

"It will make the poor poorer, there's no doubt about it," Sen. Rose added. :Another societal cost will be the fact that it will push people back into the unregulated, illegal marketplace, you know, the old-school bookie in Vegas type of deal."

With odds already juiced in favor of the sportsbooks, that gap effectively widens.

A game with 50/50 odds generally has a line set at around -110, meaning you have to bet $11 to win $10, even though it's a coin flip.

If you bake in FanDuel's new fee, on a $10 wager at -110 odds, you would win $8.59 instead of $9.09, effectively raising the odds to about -116, which is worse value than the original -110.