FanDuel adds 50-cent sports betting surcharge in Illinois
Sports betting site FanDuel will levy a 50-cent-per-wager surcharge on sports bets made in Illinois to offset a state per-bet tax, company officials announced on Tuesday. File Photo by John Angelillo/UPI | License Photo
June 10 (UPI) -- Sports betting service FanDuel has added a 50-cent surcharge to all wagers laid in Illinois to offset the state's per-wager tax of up to 50 cents per bet.
The surcharge transfers the tax to FanDuel's customers and remains in effect for as long as Illinois continues to levy the per-wager tax.
"Should the state reverse its decision at any point in the future, FanDuel will immediately remove the $0.50 transaction fee," officials at FanDuel-owner Flutter Entertainment said in a press release.
The Illinois tax will disproportionately affect bettors who lay small wagers, Flutter Chief Executive Officer Peter Jackson said in a prepared statement.
"There is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth and maximize revenue for states over time," Jackson said.
"We are disappointed that the Illinois Transaction Fee will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state," he added.
Instead of paying a 50-cent surcharge on a $5 wager, Flutter said many customers will switch to offshore betting sites that aren't subject to the Illinois tax.
DraftKings is another popular sports betting site that is considering charging its Illinois customers to offset the state tax.
"DraftKings anticipates taking action and expects to share more information soon," a DraftKings spokesperson told CNBC.
About three-fourths of Illinois sports betting wagers are made through FanDuel and DraftKings.
Illinois sports books paid about $276 million in state taxes in 2024, according to an LSR analysis.
FanDuel paid $74 million and DraftKings $67.9 million in state taxes on their combined total of more than 150 million bets.
Illinois' new per-wager tax charges 25 cents per bet on the first 20 million wagers each online sports book accepts, followed by 50 cents per wager on additional bets.
The transactional tax could cost FanDuel $86 million and DraftKings $79 million in 2026, Citizens gaming analyst Jordan Bender told CNBC.
The per-bet tax is in addition to Illinois levying between 20% and 40% on sports book profits after raising the tax from 15% last year.
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