Sports betting in Illinois fell 15% after the state imposed a new tax on every bet, prompting warnings from licensed gambling operators that more gamblers are fleeing to the illegal online market, officials said.
According to Illinois Gaming Board statistics, more than 5 million fewer bets were placed in September 2025 than in the same month last year—a 15% decline.
Despite the decline in the number of bets, sports wagering in September was up 9% year-on-year to a new record high of $1.4 billion. This means that on average bettors spent more per bet, receiving $10.6 million in taxes.
The average ticket for the month rose to $46.44, up 28% from last year, according to Legal Sports Report. Keith White, former chief executive of the National Council on Problem Gambling who now advises on gambling issues, wrote about harmful effects of higher taxes pushing players towards the illegal market.
The decline in betting runs counter to sports betting across the country, which is generally on the rise, said Maura Possley, spokeswoman for the Illinois Sports Betting Alliance, which represents online and retail gambling companies such as Bet MGM, FanDuel and DraftKings.
“These data are a warning sign to Chicago, Illinois and other state policymakers that over-taxing legal bets will have profound negative consequences for the sustainability of the legal market and future state tax revenues,” Possley said.
The new state tax, which was a first in the nation when it took effect in July, charges 25 cents per bet on each company's first 20 million bets and 50 cents per bet thereafter.
The state tax follows tiered tax hikes enacted in 2024 that hit the largest online betting companies like FanDuel and DraftKings the most, potentially increasing the tax rate by more than 30%. Many companies passed the new tax on to consumers in the form of transaction fees. But some companies skip commissions on bets of $50 or more or increase minimum bets.
Additionally, Chicago Mayor Brandon Johnson proposed an additional 10.25% tax on sports gambling revenue as part of his proposed budget. The proposed state law would prohibit municipalities from imposing a tax on sports betting.
The debate over taxes on sports betting began after a letter sent in August by the attorneys general of 50 states asking the US Department of Justice combat illegal online gambling.
Illinois Attorney General Kwame Raoul wrote that illegal gambling fuels criminal enterprises and preys on vulnerable adults and youth.
“These operations also increase the tax burden for all taxpayers as states are forced to recoup billions in lost gaming revenue,” he wrote. “I urge the Department of Justice to prioritize combating illegal offshore gaming operations while upholding the rule of law while protecting states and our residents.”
Anti-gambling groups criticize online gambling, both legal and illegal, as corrosive because it is constantly available on users' phones, making it more addictive for problem gamblers. Illinois is one of the largest sports betting markets in the country, with nearly $11 billion in bets this year through October.
Legitimate online gaming companies were once the target of criticism themselves. Before online sports betting was legalized in Illinois in 2020, former Illinois Attorney General Lisa Madigan considered online fantasy sports betting illegal, but the Illinois Supreme Court ruled otherwise.
