In response, Flutter announced via a press release that FanDuel will introduce a $0.50 transaction fee on each bet placed on its platform in Illinois, beginning 1 September.
This decision by Flutter directly addresses the increased operational costs in Illinois. The introduction of this transaction fee by the state follows a substantial increase in the betting tax rate in Illinois in 2024.
Flutter Entertainment CEO Peter Jackson said in the statement: “We are disappointed that the Illinois Transaction Fee will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state.”
Following the 2024 increase, FanDuel had absorbed the costs to avoid impacting customers. However, the new per-bet fee has prompted a different approach.
Flutter has stated that if the state reverses its decision regarding the transaction fee in the future, the $0.50 charge will be immediately removed.
Flutter told Next.io that it “sees a need for an optimal balance on tax rates that allow states to generate revenue”, while allowing “operators to provide a strong customer offering and compete effectively.”
The new Illinois tax mandates that licensed sportsbooks pay a fee per bet. This fee is $0.25 for the first 20 million wagers placed by a licensee in a fiscal year, increasing to $0.50 for each subsequent wager.
Backlash to increase grows
This measure, part of the state’s broader budget proposal, has generated concerns within the sports betting industry regarding its impact on operator sustainability and the consumer experience.
Industry representatives and sportsbook executives have voiced strong criticism of the new provision, characterising it as economically harmful and structurally flawed.Derek Stevens, CEO of Circa Sports, publicly commented on the policy during an appearance on the Vegas Stats & Information Network’s “Follow the Money” show.
Stevens initially described the state’s action as “not a good, logical, well-thought-out design.”
While later softening his language due to the imperative of maintaining a preferred license, Stevens elaborated on the potential business consequences for companies like Circa.
Stevens highlighted that the fee structure will disproportionately affect sportsbooks that offer low-stakes options or that operate with smaller profit margins.
He also cautioned that small-denomination bets, such as those of $1, $2, or $5, already popular among many bettors, could become economically unviable.
Stevens suggested that the new tax system might compel sportsbooks to implement minimum wager requirements, potentially set at $10, to maintain financial viability.
He further noted that after ing for the federal excise tax and other licensing expenses associated with professional leagues, the new system leaves minimal profit margins.
The industry broadly shares the concern that this tax structure could push bettors towards unregulated, offshore betting markets that do not incur such fees or offer consumer protections.
Jackson added in Flutter’s statement: “We also believe the introduction of the Illinois Transaction Fee will likely motivate some Illinois-based customers to bet with unregulated operators. These operators do not contribute tax revenue to the state, will not collect the newly announced transaction fee and do not offer the same levels of customer protection that regulated operators provide.”
