The Illinois Gaming Board reported a record $1.66 billion in sports betting handle for November on Wednesday despite a continued notable year-over-year decline in wagering.
The main reason for the decline in the volume of betting has been the wager surcharge on mobile operators that was passed in July as part of the state’s budget for the 2025-26 fiscal year. The decline in November was 15.4% — more than 6.1 million bets — to 33.5 million overall. The levies, $0.25 per wager for the first 20 million accepted by an operator per fiscal year and $0.50 thereafter, generated $14.6 million worth of receipts for the state in November.
The chatter around the surcharge — and Chicago’s recently enacted 10.25% tax on city-based revenue that took effect at the start of the year and is currently the subject of legal and legislative challenges — obscured monthly all-time highs set for both handle and revenue. It was the second straight month wagering topped $1.6 billion and was up 8.1% from last year.
Gross revenue totaled $160.4 million, but adjustments resulted in $169.1 million worth of taxable revenue. Adjusted revenue ticked 9.2% higher from November 2024, as the 10.2% hold was up just over one-tenth of a percentage point.
That led to an inflow of $53.5 million in receipts from operator winnings, an increase of $5.3 million from last year. The surcharge has generated $49.8 million in tax revenue, while receipts from operator winnings are running $35 million ahead of the first five months of Fiscal Year 2024-25.
We’re talking about taxes, not the game
There are so many places to start talking about sports betting taxes in Illinois, and the surcharge is as good as any. November’s decline in wagering was slightly less in terms of volume and percentage in October at 6.4 million and 15.9%, respectively.
Prior to the release of the November numbers, the Sports Betting alliance continued to sound warning bells about both the year-over-year decline in wagers and the Chicago tax, claiming it would be a gateway for bettors to leave the regulated market and wager through offshore sportsbooks.
“The IGB’s recent data illustrates more alarming evidence that tax hikes are creating a lose-lose situation for fans, where they’re either being forced to pay higher fees or left to abandon the legal sports betting market,” the Sports Betting Alliance said in a statement. “This a warning sign, and with Chicago city leaders lumping even higher taxes on fans, Illinois lawmakers are putting at risk the very sturdy regulated market they’ve built since legalization.”
FanDuel and DraftKings are the only mobile books currently paying the higher $0.50 surcharge, having long passed the 20 million threshold. The two digital titans accounted for nearly 85% of the $14.6 million in wager surcharges for November, as FanDuel remitted close to $6.6 million and DraftKings $5.8 million. The pair have remitted more than $40.7 million in surcharge payments to the state, with FanDuel tops at $21.8 million.
Fanatics is currently the only other operator averaging more than the 1.67 million per month to reach the 20 million threshold in the fiscal year, having processed nearly 9.3 million bets in the first five months. England-based bet365 is within shouting distance with almost 7.7 million wagers accepted.
FanDuel and DraftKings also face the added costs of the maximum 40% tax on operator revenue for the remaining seven months of the fiscal year after crossing $200 million in AGR. FanDuel led all operators with $66.6 million following an upward adjustment of roughly $6 million.
DraftKings reported $53.4 million in taxable winnings following a positive adjustment of more than $2 million. FanDuel led the state’s 10 mobile operators with a 12.6% win rate, while DraftKings attained an 8.7% hold against $589.2 million in completed-events handle.
Once more, Fanatics is the only other operator making any real noise and currently the only book paying above the 20% base rate. It will likely cross into the 30% bracket with December’s report after its $13.6 million AGR left it $2.4 million shy of the $50 million threshold. Fanatics posted a 10.2% hold on $129.4 million in handle as it continues to cement its status as the No. 3 mobile option in Illinois.
Bet365 ($7.5 million), BetMGM ($6.5 million), and BetRivers ($6.5 million) all had productive Novembers, with holds of 7.2% or better to move within $5 million of the $30 million benchmark that would advance them to the 25% tax bracket.
Taxes in that toddlin’ town
The sports betting tax proposed by first-term Chicago Mayor Brandon Johnson was one of the few items not challenged by his City Council, which wrested control of the budget from Johnson and passed their version, which notably did not contain a head-count tax on corporations.
Johnson estimated the 10.25% levy would generate $26.3 million in annual revenue. Using that estimate, InGame determined roughly 40% of mobile operator winnings generated in Cook County originate in Chicago. If the tax had been enacted for November’s report, the city would have seen an inflow of $3.5 million into its coffers, based on $34.3 million in online revenue.
FanDuel and DraftKings would have combined to pay more than $2.5 million of that amount, and their effective tax when adding up levies on operator revenue, the wager surcharge, the 2% Cook County levy, and the Chicago-based tax would have been slightly above 50% for November. That percentage would then trend higher for the remainder of the fiscal year as both operators would be paying the maximum 40% tax rate on all their adjusted gross revenue over the next seven months.
As a point of comparison, Bally’s generated $1.3 million in receipts for the city with its temporary casino in November. The River North venue has consistently underwhelmed in terms of meeting revenue projections in Johnson’s budget, with the mayor having earmarked $35 million in receipts for 2025 and receiving less than $15.9 million.
