FanDuel's parent company, Flutter, announced that it will add a $0.50 surcharge to bets in Illinois. The announcement is in response to Illinois' decision to charge a $0.25 or $0.50 fee to sportsbooks for each bet placed on their platform.
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The state will charge $0.25 per bet for the first 20 million bets placed and $0.50 for each bet placed above 20 million. Illinois hopes this extra fee will generate additional revenue as it attempts to plug a nearly $1 billion budget deficit.
FanDuel First To Market With Surcharge
These new fees for Illinois customers will take effect on September 1, 2025. Flutter CEO Peter Jackson voiced his displeasure in having to enact this surcharge, citing that more taxes and fees are not the right approach.
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"It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth and maximize revenue for states over time." -Peter Jackson, Flutter CEO |
FanDuel is the first book in the Land of Lincoln to enact this surcharge on each bet. But with such a giant of the industry doing so, you'd expect other books like DraftKings, BetMGM, Caesars, etc, to follow suit.
This new fee for Illinois bettors is exactly what the Sports Betting Alliance (SBA) had warned, that customers "will be the ones to bear the cost of this new tax".
SBA's statement on the new Illinois sports betting tax: pic.twitter.com/E7EWoxgipG
— Sports Betting Alliance (@SBAllianceUS) June 2, 2025
Tax Upon Tax
In enacting this per-bet fee, Illinois lawmakers aimed to raise additional revenues to address a $1 billion budget deficit. The fee is projected to add another $141 million to state coffers per year. Illinois also increased taxes on smoking products and taxes on digital advertising for out-of-state tech companies.
This surcharge is effectively the second tax increase on sports gambling in Illinois in back-to-back years. In 2024, the state more than doubled the tax rate on gross gaming revenues (GGR) for sportsbooks from 15% to between 20% and 40%, depending on total GGR.
With this new surcharge, the effective tax on sportsbooks in Illinois has risen to nearly 60%, per one analyst. That makes Illinois the highest taxed sports gambling state in the US.
Potential Fallout From Surcharge
This $0.50 surcharge hurts recreational bettors the most, those of us who only bet small amounts at a time. Those bettors will have to reconsider their betting habits, leading some to either place their bets with a smaller book where the surcharge is halved from $0.50 to $0.25 or return to the unregulated books.
Either way, customer habits will change, and it will harm the state's goals of collecting new tax revenues. As Flutter CEO Jackson pointed out earlier in this piece, there is an optimal level of taxation that will maximize state revenues. Illinois is likely to find that out the hard way.
Not The First Attempt
While FanDuel is the first sportsbook to add a $0.50 surcharge to every bet in Illinois, they weren't the first book to attempt such a surcharge.
Last year, DraftKings attempted to add a surcharge on winning bets in states with tax rates above 20%. The company received negative reviews for its decision and eventually cancelled its plan to add the surcharge.
At the time, Flutter indicated that the best approach to higher taxes was to "cut local marketing or moderate customer offers." That's not the approach Flutter is taking regarding this new surcharge, but after cutting marketing and offers after a tax increase in 2024, there's likely little left for them to cut in the Prairie State.
