Posted on: February 22, 2024, 10:45h.
Last updated on: February 23, 2024, 01:54h.
Illinois Gov. J.B. Pritzker (D) on Wednesday unveiled a $52.7 billion spending plan for the state’s upcoming fiscal year that begins on July 1. The billionaire governor in his second term plans to partially cover the 2% spending increase by raising taxes on sportsbook operators.
Illinois is home to in-person and online sports betting. Bettors last year wagered $11.6 billion at the 11 brick-and-mortar and eight online sportsbooks.
Oddsmakers kept about $1 billion of the action on an 8.6% hold. The state’s cut of the $1 billion in gross gaming sportsbook revenue was roughly $150 million.
Illinois has emerged as a major player in the sports betting space. Pritzker thinks the state should get a bigger piece of the sports betting revenue pie.
In his budget presentation, Pritzker, whose wealth stems from his family owning the Hyatt hotel chain, pitched more than doubling the tax on sports betting win. Pritzker suggested increasing the tax from 15% to 35%.
In 2023, the tax difference would have amounted to an additional $200 million. A 35% sports betting tax would be among the highest in the nation, and nearly mimic Pennsylvania’s 36% sports betting tax rate. Illinois and Pennsylvania have similarly sized populations.
New York, Delaware, New Hampshire, and Rhode Island have the highest tax rates on sportsbooks at 51%.
The Sports Betting Alliance, a trade group consisting of DraftKings, FanDuel, BetMGM, and Fanatics, issued a statement on Pritzker’s proposed sports book tax hike.
“Legalizing iGaming in Illinois would create much more revenue than raising sports betting taxes, and all without harming the health of the legal sports betting market and casinos. IGaming would create $775 million each year in ongoing new revenue for Illinois — more than triple the amount of this proposed tax increase ($230 million a year). Meanwhile, raising taxes on sports betting will allow illegal offshore sports operators to provide better odds and a competitive advantage over law-abiding sports books, crowd out smaller, startup and minority owned operators and their business partners, and threaten the long-term health and tax revenue generated by the legal market.”
Migrant Spending
Part of Pritzker’s spending increase has to deal with providing funding for migrants shipped to Illinois from Texas. The governor wants to allocate $182 million for migrant “welcome centers” and to coordinate housing and provide legal services.
Listen, maybe some of you think we should just say, ‘This is not our problem,’ and that we should let the migrant families starve or freeze to death,” Pritzker said. “But that’s not what decent Midwesterners do. That’s not what leaders do. We didn’t ask for this manufactured crisis. But we must deal with it all the same.”
Pritzker said Illinoisans against the migrant funding should blame Texas Gov. Greg Abbott (R).
“Abbott willfully planned the arrival of these individuals in locations and at times that would engender the maximum chaos for the city of Chicago and the asylum seekers themselves,” Pritzker continued. “Children, pregnant women, and the elderly have been sent here in the dead of night, left far from our designated welcome centers, in freezing temperatures, wearing flip-flops and T-shirts. Think about that the next time a politician from Texas wants to lecture you about being a good Christian.”
Pritzker also wants to spend $500 million on expanding Illinois’ quantum computing industry and to fund a cryogenics facility.
The governor is projecting a 1.5% increase in state revenues for the fiscal year to nearly $53 billion. The boosted funding primarily comes from an estimated $800 million in tax increases on large businesses.
Gaming Piggybank
Pritzker has a track record of turning to gambling to fund his spending initiatives. The governor spearheaded Illinois’ gaming expansion package in 2019. That authorized an integrated casino resort in downtown Chicago and five smaller regional casinos in the Windy City’s South Suburbs.
The 2019 casino bill nearly doubled the size of the Illinois gaming industry. The legislation additionally provided the legal framework for sports betting. The US Supreme Court the prior year struck down a federal law that had limited single-game sports betting to Nevada.
Bally’s, Chicago’s casino developer for the downtown property, said this week it’s on track to open the $1.7 billion casino destination at the former Tribune printing plant in the third quarter of 2026.
