When Illinois Gov. JB Pritzker proposed raising the state sports betting tax from 15% to 35% in February 2024, his goal was to raise an additional $200 million in revenue for the fiscal year budget that began last July 1.
It turns out the progressive tax rates ranging from 20% to 40% agreed upon during those ensuing budget negotiations last May could help reach that target faster than expected.
Sportsbooks remitted $45.8 million to state coffers for the month of February according to figures released late Wednesday by the Illinois Gaming Board (IGB) after a wildly successful month in which they posted an 11.1% hold and claimed $128 million in adjusted gross revenue.
The $1.15 billion in handle was up 7.5% from last year and marked the 20th time it cleared $1 billion.
DraftKings and FanDuel feel the pinch
Pritzker’s original ask led to vehement protests via social media from the Sports Betting Alliance, which includes FanDuel and DraftKings among its members. The organization was equally unhappy with the end result in which Illinois legislators passed the first true progressive tax rates on sports betting in the U.S.
DraftKings took its displeasure one step further with a proposal to place a surcharge on winnings in high-tax states that was panned and quickly dropped when FanDuel showed no interest in following suit. But it was clear the two biggest U.S. mobile operators were going to bear the brunt of the new rates, and it has played out in that exact fashion.
Both operators entered the top 40% tax rate in January by surpassing $200 million in fiscal-year revenue and paid a combined $36.4 million in taxes in February after generating $90.9 million in winnings between them. That accounted for more than 80% of the $45.3 million in taxes paid by the other eight mobile sportsbooks in the state.
Tax receipts have totaled $271.3 million in Fiscal Year 2025, $138.8 million higher than what the previous flat 15% rate would have generated. FanDuel ($67.3 million) and DraftKings ($54.8 million) account for $122.1 million of that amount, with Fanatics Sportsbook a distant third at $6.7 million in receipts above the 15% rate remitted to the state in progressing to the 30% tax bracket.
Fanatics emerges as the X-factor
Fanatics is currently the only second-tier mobile operator in the 30% bracket — triggered when reaching $50 million in revenue in January — thanks in part to a months-long surge in which it has supplanted BetRivers as the No. 3 generator of handle. In addition to topping $100 million worth of accepted wagers for the fifth consecutive month in February, Fanatics established a new high in revenue at $14.5 million on the strength of a 13.3% hold.
The feat is more impressive considering Fanatics had the worst performance of the nine mobile books for football wagering as bettors came out $51,600 ahead on $2.4 million bet. The IGB does not release Super Bowl-specific numbers, but sportsbooks reaped $11.4 million in winnings with a crushing 17.1% hold on all football bets.
Fanatics made its mark by taking a page from FanDuel and DraftKings — pounding the public on parlays. It made out with $8.4 million in revenue from those bets thanks to a 25.8% hold likely augmented when Philadelphia Eagles running back Saquon Barkley and Kansas City Chiefs tight end Travis Kelce both failed to score a touchdown in Super Bowl LIX.
Overall, operators combined for $76.1 million in revenue and a 22.3% hold on $340.8 million worth of parlays placed. FanDuel led all mobile books with a 26.2% win rate for parlays in claiming $34.4 million in winnings, while DraftKings totaled $22.4 million with a 19.4% hold.
Checking out the rest of the Illinois scene
Though BetRivers narrowly slipped to fifth in handle just behind BetMGM in February, it did place fourth in revenue thanks to a 9.7% hold that resulted in $6 million in revenue from $62 million handle. BetMGM did have a solid 9% hold in claiming $5.7 million in winnings.
ESPN BET joined FanDuel and Fanatics as the only operators with double-digit holds, notching a 10.4% win rate to collect $3.9 million. The PENN Entertainment-powered mobile book, though, was a distant seventh in handle at $38 million, down 33.8% from February 2024.
Caesars ($3.3 million) and Hard Rock Bet ($1.4 million) both failed to reach a 7% hold, while Circa Sports paid out $134,500 above the $12.4 million in bets accepted. It was a rough February for Circa, which came out ahead only in tennis, parlays, motorsports, and the catch-all other categories.
