Regulatory
Per-Wager Tax
Definition
A per-wager tax is a flat charge levied on a betting operator for each individual bet it accepts, regardless of the stake, the odds or whether the bet wins. Illinois introduced the first US example on 1 July 2025: each master sports wagering licensee pays 25 cents on each of its first 20 million online wagers in a fiscal year and 50 cents on each wager after that, in addition to the state's existing tax on adjusted gross sports wagering receipts.
The Illinois charge applies only to bets placed over the internet or through a mobile app, not to bets at retail counters or kiosks, and it accrues when the bet is placed. Because it is fixed per bet, a per-wager tax falls hardest on small stakes: 50 cents is 5% of a 10 dollar bet but 0.05% of a 1,000 dollar bet.
Key takeaways
- A per-wager tax is a fixed amount charged to the operator for every bet accepted, whatever the stake or outcome.
- Illinois charges online sportsbooks 25 cents per wager for the first 20 million wagers in a fiscal year and 50 cents per wager after that, from 1 July 2025.
- The Illinois tax covers internet and mobile bets only; a parlay counts as one wager, and bonus bets and pushes are taxed.
- Because it is flat, the tax is heaviest on small, frequent bets and lightest on large single stakes.
Formula
Annual per-wager tax (Illinois) = 0.25 x min(N, 20,000,000) + 0.50 x max(0, N - 20,000,000), where N = online wagers accepted in the fiscal year
The Illinois Gaming Board treats the year as the state fiscal year (1 July to 30 June) and counts each composite bet, such as a parlay or round robin, as a single wager. Separate bets on one slip are separate wagers.
Worked example
The figures below are round and illustrative.
An Illinois online sportsbook accepts 30,000,000 wagers in a fiscal year with an average stake of 25 dollars, so handle is 750,000,000. At a 9% hold, adjusted gross receipts are 67,500,000.
- First 20,000,000 wagers x 0.25 = 5,000,000
- Next 10,000,000 wagers x 0.50 = 5,000,000
- Per-wager tax = 10,000,000, about 14.8% of adjusted gross receipts, before the state's receipts tax.
If the same handle came from 75,000,000 bets averaging 10 dollars, the per-wager tax would be 32,500,000, nearly half of receipts. Bet count, not handle, drives the cost.
Why it matters
A per-wager tax changes which products make money. Because the charge is the same for a 5 dollar bet and a 5,000 dollar bet, it penalises high-frequency, low-stake products such as micro-betting and favours larger single stakes and composite bets: under Illinois rules a same-game parlay counts as one wager however many legs it has. Pricing teams therefore track average stake per bet alongside hold percentage when they assess a state.
For suppliers, the tax shifts the economics of promotions, because bonus bets are taxed like cash bets, and it puts pressure on any revenue-share arrangement that does not account for a cost driven by bet count rather than revenue. Operators must also adapt reporting: the Illinois Gaming Board taxes a wager in the month it is placed, not when it settles.
Illinois is the only US state with this model so far, and other states considering new revenue will look at how it performs. The US online gambling regulation course covers how state tax design differs across the country.
Per-Wager Tax vs Turnover Tax (Stake Tax)
| Per-Wager Tax | Turnover Tax (Stake Tax) |
|---|---|
| A fixed amount per bet, so the tax as a share of the stake falls as bets get bigger. | A percentage of each stake, so the tax rises in proportion to bet size. |
A sportsbook with many small bets suffers more under a per-wager tax; one with high average stakes suffers more under a stake tax. The customer mix decides which regime is heavier.
The bottom line
A per-wager tax charges operators a fixed sum for every bet, so its cost depends on how many bets are placed rather than how much is staked or won. Illinois's model, in force since July 2025, makes small and frequent online bets markedly less profitable.
Sources
- FAQs on New Statutory Sports Wager Tax - Illinois Gaming Board
- Illinois Passes 56 Billion Dollar Budget with Prediction Market, Fantasy Sports Tax - Sportsbook Review
Frequently asked questions
What is the Illinois per-wager tax?
The Illinois per-wager tax is a charge on each online sports bet placed with a licensed sportsbook, introduced from 1 July 2025 by Public Act 104-0006. The licensee pays 25 cents per wager for its first 20 million online wagers in a fiscal year and 50 cents for each wager after that. It is in addition to Illinois's tax on adjusted gross sports wagering receipts and is paid monthly to the Illinois Gaming Board.
Does the Illinois per-wager tax apply to parlays?
A parlay, round robin or other composite bet counts as a single wager, so it attracts one per-wager charge regardless of the number of legs, according to Illinois Gaming Board guidance. However, several separate bets on the same betting slip are each taxed as individual wagers. Bets placed with bonus credits and bets that push are also taxed, because the tax applies to every wager regardless of outcome or funding source.
Does the per-wager tax apply to retail sports bets?
No. Under the Illinois statute the tax applies only to wagers placed over the internet or through a mobile application. The Illinois Gaming Board has confirmed that bets placed in person at retail locations, whether at a cashier or a kiosk, are not subject to the per-wager tax, although they remain subject to the state's other sports wagering taxes.
Who pays the per-wager tax, the operator or the bettor?
The legal liability falls on the master sports wagering licensee, which reports and remits the tax to the Illinois Gaming Board each month. The law does not impose it on the bettor directly. Whether an operator passes the cost on to customers, for example through fees or changed pricing, is a commercial decision, and any such charges must follow the state's rules on transparency and consumer protection.