Latest news with #IllinoisTransactionFee
UPI
2 days ago
- Business
- UPI
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.
USA Today
3 days ago
- Business
- USA Today
FanDuel appears ready to sacrifice bettors on the altar of lower taxes
FanDuel appears ready to sacrifice bettors on the altar of lower taxes Last week, we talked about the new online sports betting tax in Illinois that would hit operators with a 25 cent fee for each of the first 20 million bets they take and a 50 cent fee for every bet after that -- and how those operators appeared ready to pass those fees on to customers. On Tuesday, FanDuel became the first operator to do just that. In response to the new Illinois tax (which followed a separate increase in 2024), FanDuel announced the addition of a 50-cent transaction fee for every bet by Illinois customers beginning Sept. 1, which is two months after the tax goes into effect on July 1 and, according to InGame, the month when the operator is likely to hit the 20-million bet threshold that triggers the 50-cent tax. FanDuel would effectively eat the first two months of the tax at 25 cents. "Should the state reverse its decision at any point in the future, FanDuel will immediately remove the $0.50 transaction fee," the statement said. If that doesn't make obvious what FanDuel is attempting to do -- use bettors to pressure lawmakers into retracting the new tax -- Flutter CEO Peter Jackson's words should: "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. We also believe the introduction of the Illinois Transaction Fee will likely motivate some Illinois-based customers to bet with unregulated operators." It's all right there. FanDuel isn't wrong that this transaction fee has the potential to push some customers to unregulated operators -- particularly if other regulated operators follow suit with their own fees -- but that can only happen if said operators are passing the fee to customers in the first place. Remember, this is originally a tax on the operator. Then again, that seems to be the point. Bettors are set to get the raw end of this deal, and FanDuel is doing its part to make sure lawmakers get the blame. Whether that's fair is a question for someone smarter than myself. I have no clue whether the new taxes actually are too exorbitant to expect operators to continue eating the costs. But that's obviously what they want us to believe, and they appear willing to sacrifice customers to prove as much -- because not everyone is going to care the reasons behind why a $1 bet is costing them $1.50. They'll just take their business elsewhere. After last year's Illinois tax increase, DraftKings announced its own plans for a surcharge that never actually saw the light of day after other operators didn't follow suit. This time, it's FanDuel putting its brand loyalty to the test in what feels like an attempt to make lawmakers to reverse course. But with three months before these transaction fees are set to hit customers, that pressure will eventually shift to FanDuel to follow through. The unfortunate part about this game of chicken between operator and government is that bettors are the ones caught between the headlights.
New York Post
3 days ago
- Business
- New York Post
FanDuel introducing shocking new betting surcharge after controversial tax passed
Gambling content 21+. The New York Post may receive an affiliate commission if you sign up through our links. Read our editorial standards for more information. FanDuel's antagonistic response to the Illinois state legislature is not going to go over well with bettors in the Prairie State. Flutter, the parent company of the gaming giant, announced Tuesday that starting Sept. 1, each bet made at FanDuel will be subject to a 50-cent transaction fee, no matter the amount of the wager or whether it wins or loses. The unpopular decision, which will come into action right before the start of the NFL season, was made in response to a surprising set of new taxes passed by Illinois lawmakers last week. The new levy subjected sportsbooks operating in the Land of Lincoln to a 25-cent tax for the first 20 million bets and 50 cents per bet beyond that. The new taxes were passed in the middle of the night, without much warning, and understandably upset the bookmakers operating in the state. Instead of trying to work with the lawmakers, FanDuel has chosen to essentially pass the buck to the customer. 'It is important to recognize that 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,' Flutter CEO Peter Jackson said in a company release. The new surcharge will be unpopular across the board, but it will be a real kick to recreational punters who prefer to bet small amounts at a time. The Illinois State Legislature raised taxes on sports betting companies. Randy Runtsch – If you're going to build a six-team parlay for $2 in Week 1 of the NFL season in Illinois, you'd essentially be paying a 25% tax on your wager. '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,' Jackson said. Jackson also noted that the surcharge would be removed if Illinois reversed the new tax hike. FanDuel is quote popular during the NFL season. Getty Images This is not the first time that one of the sports betting heavyweights has tried a pass-the-buck approach to new legislation. Last year, DraftKings tried to combat high taxes in states like New York by adding a surcharge to every winning bet in certain states. The decision was panned, and DraftKings walked it back before implementation. Betting on the NFL? It is unclear if this decision by DraftKings' biggest rival will put that plan back in motion. What is clear is that, in this ongoing battle between the House and the House, there is always going to be one loser: The Punter. Why Trust New York Post Betting Michael Leboff is a long-suffering Islanders fan, but a long-profiting sports bettor with 10 years of experience in the gambling industry. He loves using game theory to help punters win bracket pools, find long shots, and learn how to beat the market in mainstream and niche sports.
CNBC
3 days ago
- Business
- CNBC
FanDuel adds 50-cent surcharge on Illinois bets to offset state taxes, DraftKings may follow
FanDuel is upping the ante in Illinois with a new 50-cent surcharge on all wagers, and DraftKings may be next. Flutter-owned FanDuel is introducing the charge to mitigate the impact of new taxes that the state instituted with its new budget, which disproportionately affect the two leading sportsbooks. The new tax is applied to each wager that a sportsbook accepts — 25 cents per bet for the first 20 million wagers, 50 cents per wager after that. "Should the state reverse its decision at any point in the future, FanDuel will immediately remove the $0.50 transaction fee," Flutter said in a press release. DraftKings may be following suit. In a statement issued on Tuesday, a company spokesperson said, "DraftKings anticipates taking action and expects to share more information soon." Combined, FanDuel and DraftKings account for about 75% of the Illinois sports betting market. Citizens gaming analyst Jordan Bender estimates the new transaction fee will translate to $79 million in new 2026 revenue for DraftKings, or 5.4% of its projected EBITDA for that year, and $86 million for FanDuel, about 2% of EBITDA. The Illinois tax comes on top of a progressive tax passed last year, which leaves the most successful sportsbooks paying taxes at a rate of 40%. Before the change, they were paying at 15%. When that tax bill passed, DraftKings initially said it would pass along the costs to consumers. After massive backlash, it reversed course. Now FanDuel has picked up the gauntlet to manage the impact. "It is important to recognize that 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. We are disappointed that the Illinois Transaction Fee will disproportionately impact lower wagering," said Flutter Entertainment CEO Peter Jackson in a statement. There are a number of other state legislatures considering raising their own tax rates, including New Jersey, Maryland, Massachusetts, Michigan and Pennsylvania. Jackson said the tax disproportionately punishes the companies that have invested the most in growing the regulated market, adding the fee will motivate gamblers to head to unregulated operators who don't pay taxes and don't have the same consumer protection. And he said, the tax most affects recreational customers who make small bets. "It is important to recognize that 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," he said.
