Due to a new round of heavy taxes imposed on the sports betting industry by Illinois, Flutter Entertainment announced that starting from September 1, a transaction fee of $0.50 will be added to each bet placed on its FanDuel platform in the state. This new policy marks the first time the company has passed part of the tax burden onto consumers.
Flutter stated that this move is a direct response to the new gambling tax policy recently enacted in Illinois. According to the latest legislation in the state, each sports betting operator must pay a tax of $0.25 per bet, which will increase to $0.50 per bet once the annual total exceeds $20 million. This is also the first state-level policy in the United States to tax "per bet".
In addition, this additional fee is also added on top of the income-related tax base that the state had previously raised. Since last year, Illinois has implemented a floating tax rate system, setting the minimum tax rate at 20% of adjusted gross revenue (AGR), significantly higher than the previous uniform rate of 15%. Top-ranking operators like FanDuel and DraftKings face tax rates as high as 40%.
Although FanDuel has always opposed the tax increase, it had not previously charged its users. However, the cost pressure brought about by the new tax type eventually prompted Flutter to take action and start charging transaction fees to users in Illinois.
Flutter: "No way back"
In a statement, Flutter pointed out that the company had tried to absorb the cost impact of the 2023 tax reform and strive to maintain the user experience, but the new per-bet tax system left it "no choice". However, the company also emphasized that if Illinois withdraws such taxes in the future, they will "immediately" cancel this additional fee.
Flutter CEO Peter Jackson criticized the Illinois government's "overly aggressive" taxation method. He believes that such a tax system will have a negative impact on market development and consumer experience, especially for small and medium-sized betting players.
"We are disappointed with this policy. It imposes a greater burden on small recreational players and also punishes those companies that have invested the most in building the online gambling market in Illinois," Jackson said.
He also pointed out that the new charges might force some users to move to unregulated gray platforms—these platforms neither pay taxes nor comply with regulatory requirements, and their user protection mechanisms are far inferior to those of legal operators.
"We are concerned that this transfer of burden will stimulate the expansion of unregulated gambling platforms, attracting users who should be within the legal system to platforms that neither pay taxes nor are regulated."
