You can now add BetRivers to the ever-growing number of Illinois sportsbooks that have either added a fee or a minimum bet threshold in the wake of the state’s legislature passing a law that taxes the books with a 25-cent fee per bet on the first 20 million bets taken in a calendar year.
That number goes to 50 cents after those first 20 million bets, and the tax is projected to collectively cost operators $125 million per year.
BetRivers’ minimum bet size will be $1, as announced during the company’s Q2 earnings call Wednesday.
It joins BetMGM and Hard Rock in the minimum bet category. BetMGM announced a $2.50 minimum bet that went info effect July 16, and Hard Rock added a $2 minimum bet for its Illinois customers earlier.
While these thresholds are clearly in place to avoid paying a fee on a bet that doesn’t even reach a quarter, the math is still not all that favorable for sportsbooks.
To wit: If one bettor places a $2.50 bet on the Eagles giving 7 points at -110 at BetMGM for the NFL opener, and another bettor places $2.50 on the Cowboys getting the 7 points at -110, BetMGM would end up losing money on the deal. The sportsbook would pay out $4.77 either way on the $5 wagered, but would still have to pony up another 50 cents for the fees, yielding a loss of 27 cents.
It would be more pronounced at BetRivers on a $1 bet; the payout would be $1.91 either way, but with the fees, the sportsbook would lose 41 cents.
You pay
Three other sportsbooks — DraftKings, FanDuel, and Fanatics — opted to tack a fee directly on to every bet, no matter the size.
FanDuel and DraftKings — both sportsbooks routinely fly past the 20 million wager a month number — have instituted a flat 50-cent fee on each wager.
Fanatics — which hasn’t gone over the threshold — has put a 25-cent fee on each bet.
Illinois’ four other online sportsbooks — Circa Sports, Caesars Sportsbook, bet365, and ESPN Bet — have yet to take any action.
The fee saga has deeper roots than just this year’s legislation. DraftKings first floated the idea of a surcharge in Illinois and other high-tax states in 2024, after the Illinois legislature more than doubled the tax rate for the state’s biggest operators. Gov. JB Pritzker had asked lawmakers to bump the then-15% flat tax to 35%, but legislators went further, creating a progressive scale that runs from 20% to 40%.
Following that 2024 increase, DraftKings announced it would implement a betting surcharge, but never pulled the trigger. Flutter executive Peter Jackson said during the company’s Q3 earnings call that year that it wouldn’t impose a surcharge, and DraftKings subsequently backed down from its announced fee.
But this latest hit has clearly pushed operators past their breaking point. The math is stark: DraftKings and FanDuel essentially went from paying that 15% flat tax to a blended rate of 36% in 2024, and as of July 1, will likely be paying about 50%.
