Legal sports betting in Illinois dropped sharply in September following the implementation of a new tax, raising alarms that state policy is pushing bettors into the illegal gambling market. The Illinois Gaming Board reported a 15% decline in betting activity compared to September 2024.
According to the Sports Betting Alliance of Illinois, five million fewer bets were placed this September, despite the usual spike associated with football season and major league baseball’s playoff race. Industry spokesperson Maura Possley called the drop a “red flag” and said the data points to bettors abandoning the legal market in favor of untaxed alternatives.
Governor J.B. Pritzker’s $55.2 billion state budget, passed in June, included over $480 million in new tax hikes. Among them was a per-wager tax of 25 cents for up to 20 million mobile or online bets, and 50 cents for every bet beyond that. Betting operators are allowed to pass the cost on to consumers, effectively raising the price of legal bets.
September was the first full month under the new tax, and Possley said the impact was immediate. She warned that overtaxing the legal betting market may drive users to unregulated platforms, undermining the state’s tax revenue goals and leaving consumers without protection.
Nationwide trends show sports betting is increasing in other states. Illinois’ decline is an outlier, suggesting the state’s tax structure may be discouraging legal participation. Illinois now ranks among the highest in per-wager taxes across the country.
Possley also criticized a new proposal by Chicago Mayor Brandon Johnson to impose an additional city-level betting tax, calling it “unprecedented.” She said such a move would only further incentivize residents to bet through illegal or out-of-state channels.
The state attorney general and counterparts nationwide have urged the Department of Justice to crack down on illegal online gambling operations. However, Possley warned that the current tax climate in Illinois is actively pushing people toward those very platforms.
