Illinois Wagering Volume Continues To Be Notably Down

The Illinois Gaming Board reported on Tuesday sports betting handle of $1.17 billion for February, a figure that hides the continuing sharp year-over-year decline in the number of wagers placed in the Land of Lincoln.

The state’s 10 mobile sportsbooks accepted 20.6 million wagers in February, down 25.2% from last year. The downturn is 30.7% when excluding bet365, which took 1.5 million bets this February and did not launch in Illinois until last March.

The per-wager surcharge passed in last year’s budget continues to be an albatross dragging wagering volume down. Proponents can argue the 25-cent or 50-cent tax per bet placed has more than served its purpose; the $83.6 million in tax receipts generated the first eight months of the fiscal year is more than double the $40 million estimated prior to Illinois Gov. JB Pritzker signing the budget into law last June. FanDuel and DraftKings, the lone digital operators paying the higher 50-cent surcharge, accounted for $7.4 million of the $8.8 million in remits for February.

A bill to repeal the law in time for fiscal year 2027 has been filed by state Rep. and House Gaming Committee Chairman Daniel Didech, but it is currently languishing in the Rules Committee with a Friday legislation crossover deadline looming in Springfield. FanDuel announced last Thursday it was waiving its pass-through on the surcharge through June 19, but no other sportsbook has followed suit.

Despite the lesser volume of wagers, handle still increased 1.5% from the previous February. The $109.2 million in adjusted gross revenue, however, was down 14.7% from last year as the 9.4% hold was nearly 1.8 percentage points lower. The state collected $38.1 million in revenue-generated receipts, and the $400.2 million in state-level levies this fiscal year is running $128.9 million ahead of last year’s pace.

The ongoing tale of parlays and pass-throughs

Parlays have long been the bread-and-butter of Illinois operator revenue, and February was no different as the house claimed $60.4 million in winnings with a pedestrian 17.7% hold against $340.4 million handle.

FanDuel, DraftKings, and Fanatics are the clear-cut top three options for bettors, though there is still a sizable gap between Fanatics and the two leviathans of digital sports betting. But how each operator incorporated its respective pass-through has impacted operator performance in this key wagering metric.

Fanatics is the only one of the trio that has reported year-over-year increases in both parlay volume and parlay handle. It currently has a 25-cent per wager pass-through on all bets that cancels out the surcharge.

Its February 2025 average parlay wager amount is by far the highest of the three — more than three times that of FanDuel ($17.21) and nearly triple DraftKings ($18.94). Though Fanatics reported a near-8% drop in its average parlay wager amount this year, the $50.45 per multi-leg bet placed is still more than double the overall mobile average of $20.47.

Fanatics, though, failed to make hay on parlays in February. Its 10.9% win rate was the lowest among the nine operators who generated at least $5 million handle as it totaled $3.9 million in winnings.

FanDuel, like Fanatics, opted for a universal pass-through on all wagers, but set its rate at 50 cents knowing it would easily blow past the 20 million wager threshold to trigger the higher rate. Long the gold standard for parlay bets, the higher surcharge created issues in Illinois since many bettors often enjoy putting together wagers ranging from $1 to $5 with high leg counts and long odds in hopes one would hit.

The 50-cent surcharge eliminated some players from that market and perhaps even drove some to Fanatics and bet365, which also has a 25-cent surcharge on sub-$10 wagers. FanDuel has slipped behind DraftKings in terms of parlay handle, but its usual stellar performance — FanDuel attained a state-best 23.6% hold in February to reap $24.6 million in revenue — has helped mitigate lesser action.

It can be argued DraftKings has come closest to solving the pass-through riddle through its nuanced approach that includes waiving the surcharge on parlay bets of $10 or more. It gets the best of both worlds: The staggering decline in the volume of wagers means less in surcharge payments, and the surge in the average wager for a bet type that more greatly favors the house provides an avenue for increased revenue compared to single-event wagering.

DraftKings was near the statewide hold for parlays at 17.2%, collecting $20.7 million in revenue.

Checking the effective tax rates

The per-wager surcharge, coupled with the progressive tax rates based on revenue thresholds, has created elevated effective state tax rates. FanDuel and DraftKings are currently paying the maximum 40% tax on operator generated revenue, though FanDuel’s effective state tax rate is nearing 45% when combining both levies as it has remitted close to $163 million this fiscal year.

DraftKings is not far behind at 43.9%, having crossed $150 million in receipts after a $16 million bill for revenue and another $3.6 million in wager surcharges.

February was the first full month for Fanatics being tethered to Argosy Casino Alton following its break from embattled Hawthorne Race Course in late January. The move reset Fanatics’ revenue total as the tax rate is based on the master sports wagering licensee and not the management services provider licensee.

That meant Fanatics went from a 30% rate back to the 20% base rate. That has resulted in a savings of nearly $960,000 as the $9.6 million AGR accumulated since the changeover would have generated nearly $2.9 million in receipts had Fanatics still been tethered to Hawthorne. It had an effective tax rate of 28.6% while operating via Hawthorne; that is currently 23.8% through wagering with the Argosy.

Circa Sports, whose high-limit, low-hold business model is distinctive, has also proven an interesting case study. The public came out $127,639 ahead in February, the third consecutive month it finished in the black.

The Las Vegas-based sportsbook has generated only $564,000 in AGR this fiscal year, and the gap between its revenue-based tax payments and per-wager surcharges is less than $40,000, having remitted $73,200 in per-wager taxes. It’s also resulted in an effective tax rate of 27.6%, the highest among the five operators still paying the 20% base rate.

Circa’s retail book at The Temporary in Waukegan has fared better than its mobile counterpart this fiscal year with $821,700 in winnings.