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At first glance, it appears Illinois sports betting is as hot as ever. Here’s a market that’s becoming one of the highest-grossing since legalizing sports betting in 2020.
However, when you look under the hood, there’s some cracks starting to show in the marketplace. Maybe it’s a flukey month, but September data shows that the state’s greediness might finally be catching up to it. Keep on reading and we’ll tell you all about it.
Illinois Handle Hits a Record… While Revenue Tanks
If you only pay attention to the headlines, Illinois had a strong September. Bettors wagered $1.42 billion — up 9 percent year-over-year and the state’s first billion-dollar month since May. It’s also the sixth time in the last 12 months Illinois has cleared the $1.4 billion mark.
But zoom in closer and you’ll see weakness. Operators generated $100.7 million in revenue for the month — down a brutal 26 percent from the $137.1 million they pulled in last September. Hold collapsed to 7.1%, the second-lowest of 2025 and a far cry from the 10.5% clip operators enjoyed last fall.
Parlays, the lifeblood of every book, took the biggest hit. Statewide parlay hold plummeted to 13 percent. DraftKings was hammered especially hard, turning a 5.6 percent hold on more than half a billion in bets — a disastrous return compared to previous months for one of the top sports betting apps.
So how does the handle go up while revenue falls off a cliff? Because bettors are placing fewer bets — but bigger ones. We’ll explain in the next section.
The Per-Wager Tax Is Squeezing Bettors, Not Books
The minute Illinois implemented its new per-wager tax on July 1, everyone in the industry said the same thing: books aren’t going to eat that cost — they’ll pass it on to customers. And in September, we saw exactly that happen.
Illinois now charges either $0.25 or $0.50 per ticket, depending on volume. DraftKings and FanDuel crossed the 20-million ticket threshold almost immediately, meaning most of their users are now paying the full 50-cent surcharge every time they place a bet.
So what happens? Bettors cut back. Ticket count crashed a whopping 15 percent to just 30.6 million statewide. Look, we can’t pin ALL that fall-off on the new tax, but it has to play some role, right? We think so.
At the same time, average bet size ballooned to $46.44, up from $36.20 last September — a massive 28 percent jump. Bettors are placing fewer wagers to avoid fees, but pushing more money into each individual bet. That’s great for the tax base, but terrible for responsible gambling efforts. Even the former head of the National Council on Problem Gambling warned last month that these types of structural changes increase risk.
And regardless of the chaos, the state cashed in. The per-wager tax alone generated $10.6 million in September — a staggering 37 percent of all tax revenue Illinois collected from sports betting that month. DraftKings alone cut a $4 million check. FanDuel paid $4.5 million. Together, they’ve funneled more than $16 million to the state from wager taxes in just three months.
Illinois’ Greed Knows No Bounds
To recap, in the last 18 months, Illinois has raised taxes on sports betting twice. The tax-per bet wasn’t the first instance of greed.
Remember the state-level progressive tax? The state once taxed all sports betting at a flat 15 percent. Now? It’s a 20–40 percent sliding scale. That alone doubled the tax burden on the biggest operators like BetMGM, DraftKings, and FanDuel.
You’d think the state would stop there, right? Nope, they’re thinking of extracting even more from the new fledgling industry.
Get this, Chicago mayor Brandon Johnson is now pushing a 10.25 percent local tax on sports betting revenue earned inside city limits. Yes, another tax — stacked on top of the state tax, on top of Cook County’s 2% cut, on top of the per-wager fee. Triple-dipping, basically.
His justification: fill a $1.15 billion city deficit “fairly,” without raising property taxes. The city expects $26 million from the tax — barely a dent in the deficit. But the pain to operators (and bettors) would be very real and perhaps disastrous.
State Lawmakers Finally Step In
The proposal isn’t law yet — and thankfully, state lawmakers are already trying to kill it. For once, they’re against raising taxes on this new industry.
A new bill, HB 4171, would explicitly ban cities from taxing or regulating sports betting. The sponsor, Rep. Dan Didech, says letting Chicago impose its own rules would destroy market stability, push bettors to popular offshore sites, and cannibalize state revenue. “In 2019, it was never our intent to allow local governments to create their own rules,” he said.
Four other Chicago-area representatives backed the bill immediately. The only problem? The legislature doesn’t reconvene until January 2026. That means the city’s proposal will hang over the market like a storm cloud for more than a year.
If October and November sports betting numbers show the same cracks that September did, maybe, just maybe, lawmakers will fight this new tax. After a certain point, bettors will just slow down on sports betting, as September showed.
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