Circa Sports late Friday announced that it is the latest digital sportsbook to impose a minimum bet in Illinois, where lawmakers passed a per-wager tax in May. Circa’s $10 minimum is the highest to date, though it reflects its customer base.
Circa founder Derek Stevens told the Missouri Gaming Commission (MGC) last Wednesday that the average bet on his company’s site is $50 — well above the national average. Circa caters to high-limit bettors, and Stevens was making a presentation to the MGC about why his platform should get an untethered digital betting license. Friday, Circa and DraftKings were awarded licenses in Missouri, which will launch wagering Dec. 1.
According to InGame‘s Chris Altruda, in Illinois the average digital bet on Circa’s platform through the first five months of the year was $350. In addition, while many competitors point to parlays as their most lucrative and oft-made wagers, at Circa they account for just 16.3% of bets and 4% of handle.
“After thoughtful consideration, we believe the best course of action for a low-hold, high-volume sportsbook such as Circa Sports is to raise the minimum wager in Illinois,” Stevens said in a statement Friday. “We are reluctant to compromise our best-in-class betting splits or charge our customers a per-bet fee. Beginning Monday, September 1, a $10 minimum wager will take effect, protecting the vast majority of bettors in Illinois. No one should have to pay a fee to make a wager.”
Some operators will assess surcharge
Stevens was referring to DraftKings, Fanatics Sportsbook, and FanDuel, all of which have plans to begin passing through the new Illinois tax to bettors. DraftKings and FanDuel will charge 50 cents per bet, and Fanatics will charge 25 cents. The state of Illinois in July began charging sportsbooks 25 cents per wager for the first first 20 million made in a fiscal year and 50 cents for the any bets above that. DraftKings and FanDuel are likely the only operators to cross the 20-million bet threshold, probably beginning next month.
In a 12-month period, Illinois moved from charging a 15% flat tax on sports betting operators to charging an effective tax rate of more than 50%. In addition, the Illinois Gaming Board, per a July 10 letter, appears poised to tax DraftKings, Fanatics, and FanDuel on the surcharge, which amounts to double taxation, according to Adam Hoffer of the non-partisan Tax Foundation.
“Technically government can tax a tax,” Hoffer previously told InGame. “We call this tax pyramiding, and it is most often the result of poor tax design somewhere along the line. This happens more often than you would think, especially with sales taxes.”
Circa joined BetMGM ($2.50), Hard Rock Bet ($2), BetRivers ($1), and ESPN Bet ($1) in setting a minimum bet. Of the operators live in Illinois, only bet365 and Caesars Sportsbook have not announced how or if they will respond to the per-wager tax.
‘We won by staying true to who we are’
In Missouri, the announcement that Circa was awarded one of two available stand-alone mobile licenses came as something of a surprise. Stevens’ authentic and almost folksy presentation differed significantly from the slick, statistic-heavy presentations from executives at DraftKings and FanDuel.
The national market leader, FanDuel, did not receive a license but has announced a market-access agreement with Major League Soccer’s St. Louis City SC. Tethered license applicants will present to the MGC on Sept. 12. No date has been accounted for when up to 19 remaining licenses will be awarded.
“We came in as the long shot against national giants like DraftKings and FanDuel, but our licensure approval today proves there’s room for a different kind of operator,” Stevens said in a statement Friday. “Circa Sports is built for bettors, with sharp odds, high limits and a low hold. We’ve already connected with 81,000 Missourians through our Club One loyalty program, and we’re ready to be an active part of the community, from local events to supporting youth sports. We didn’t win by trying to be the biggest. We won by staying true to who we are.”
