May 8, 2024 3 min read

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Sports Betting Giants Unite as SBA Fights Illinois Tax Hike Proposal

The Sports Betting Alliance (SBA) initiated a campaign to combat the proposed tax increase, urging consumers to reach out to state lawmakers to voice their opposition to higher taxes

The Sports Betting Alliance (SBA), a consortium of some of the biggest sports betting operators in Illinois, including BetMGM, DraftKings, Fanatics, and FanDuel, has opposed a major tax hike proposal in the state filed by Gov. JB Pritzker. The bill aims to increase taxation on sports betting from 15% to 35%   

SBA Campaign Spurs 25,000 Emails to Fight Sports Betting Tax Hike

To counter the proposed tax hike the SBA launched a campaign asking consumers to contact state lawmakers expressing their opposition against raising taxes on sports betting. According to a statement from an SBA spokesperson made to the Legal Sports Report, over 25,000 emails have already reached the inboxes of Gov. Pritzker and state lawmakers highlighting the strong opposition coming from the public.

According to the alliance, the tax hike will have numerous negative effects on the market. One of the organization’s key arguments is that it will lead to worse odds for players, which will discourage them from placing sports bets. Additionally, increased taxes will most likely mean fewer promotions and bonuses. And finally, the SBA has expressed concerns that the tax hike may drive bettors toward illegal offshore operators, which are tax-free.

According to the information posted on SBA’s website, Illinois lawmakers have until the end of May to vote on the proposed tax increase, highlighting the importance of citizens making their voices heard during this critical period.

SBA Warns of Financial Strain from Proposed Tax Hike

Another argument against the proposed tax increase the SBA has underscored is the financial strain that it would impose on sportsbook operators.  Operators entered the market under the 15% tax rate and a 133% increase would mean that their opportunities to invest in technology upgrades, responsible gaming practices, and customer support services would be significantly reduced. Many operators are already operating at a loss but remain committed to the state based on the original tax rate agreement.

The problem of tax increases is not on the table only in Illinois. New Jersey is also considering a tax hike from the current 14.25% to 30%. 

Separately from the SBA, FanDuel has also actively expressed its opposition against the proposed tax rate increase. The sportsbook operator has asked its customers in Illinois to resist the tax hike. 

Illinois’s tax rates are indeed not as high as those in other US states and proponents of the tax hike have highlighted that the change will add another $200 million in tax revenue for the state. 

Yet, FanDuel CEO Amy Howe has pointed out how important it is to find the right balance for the percentage of the tax rate in order to avert consequences such as decreased competition and driving bettors to the unregulated black market. 

Author

Silvia has dabbled in all sorts of writing – from content writing for social media to movie scripts. She has a Bachelor's in Screenwriting and experience in marketing and producing documentary films. With her background as a customer support agent within the gambling industry, she brings valuable insight to the Gambling News writers’ team.

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