Illinois sports bettors are now facing a “double whammy” as DraftKings has announced it will join rival FanDuel in implementing a $0.50 transaction fee on all sports wagers placed on its platform within the state. This move means customers of Illinois’ two largest sports betting providers have now been hit with the very same surcharge, a direct consequence of the state’s contentious new per-bet tax that has drawn widespread industry criticism.

The state of Illinois enacted a new tax on sports wagering last week (early June 2025), a measure that has drawn widespread criticism from the industry. Effective from July 1, 2025, operators will be required to pay $0.25 in tax on each of their initial 20 million wagers within a fiscal year, with the tax rate later increasing to $0.50 for each wager beyond that threshold. This new per-bet levy is in addition to an existing progressive tax on Adjusted Gross Revenue (AGR) that can reach up to 40 percent for major operators like DraftKings and FanDuel.

DraftKings Follows Suit, Citing Tax Burden

In announcing its decision to implement the surcharge, DraftKings mirrored the rationale provided earlier by FanDuel’s parent company, Flutter Entertainment. DraftKings stated that the new fee is a necessary measure to offset the increased operational costs imposed by the Illinois tax. While the company has stressed its efforts to absorb previous tax hikes, the new per-transaction levy was presented as a burden too significant to bear without a direct impact on consumers. This decision marks a major development, especially considering that DraftKings had previously considered and then abandoned plans for a similar surcharge in other high-tax states in 2024, reportedly due to strong public and customer backlash. The current alignment with FanDuel’s fee suggests a unified front from the industry’s largest players in response to what they deem an unsustainable tax environment.

FanDuel Set the Precedent

Just days prior, Flutter Entertainment announced that its FanDuel brand would initiate a $0.50 per-bet fee in Illinois, with the fee set to become effective on September 1, 2025. Flutter CEO Peter Jackson had previously expressed disappointment regarding the Illinois tax. He stated that the Illinois tax “will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state.” Jackson also warned of the potential for bettors to migrate to unregulated offshore platforms that offer no consumer protections and contribute no tax revenue to the state. Flutter has publicly pledged to remove its fee if Illinois lawmakers reverse the per-bet tax.

Unified Response, Unified Impact on Bettors

With both DraftKings and FanDuel now set to impose identical $0.50 per-bet fees, Illinois bettors will find little refuge if they wish to use the state’s most popular regulated platforms. The flat fee structure is particularly punitive for casual bettors placing smaller wagers. For example, a $0.50 fee on a $1 bet effectively doubles the stake for the bettor, representing a 50 percent surcharge, while the same fee on a $100 bet is a comparatively minimal 0.5 percent.

This development is likely to intensify concerns voiced by the Sports Betting Alliance (SBA), which represents major operators including DraftKings and FanDuel. The SBA has previously labelled the Illinois tax as “crippling” and “discriminatory.” The SBA and individual company executives have consistently warned that such tax policies risk driving customers, especially those who place small bets, towards the unregulated black market.

The decisions by both DraftKings and FanDuel to pass the cost of the new tax directly to consumers underscore the significant financial pressure operators are facing in Illinois. The state’s aggressive tax strategy, layering a per-transaction fee on top of an already high AGR tax, is now directly translating into increased costs for bettors. The industry and market observers will be closely watching the impact on betting volumes, customer behaviour, and the overall health of the legal sports betting market in Illinois, a situation that could have ripple effects across other states considering similar tax measures.

Broader Implications and Political Context

The budget approval and the sports betting tax hike occurred amidst political divisions. While the Pritzker administration celebrated the state’s seventh consecutive balanced budget, Republican opponents sharply criticised the late additions to the budget. Republican Rep John Cabello objected, stating that the process once again lacked transparency, arguing that “We’re rushing this process like we always do: ‘Let’s hide this stuff. Let’s hide it so that the public doesn’t see it until it’s too late.’” State lawmakers first introduced the proposed tax hike on sports wagers on Friday, May 30, just the day before passing the measure.

The latest Illinois sports betting tax hike, particularly the per-wager fee, has ignited a “firestorm of criticism” from the industry, which fears it will stifle the legal market and inadvertently drive players to offshore sites. Major sportsbooks are now weighing their options, including potentially exploring new product verticals like prediction markets, as the state navigates the financial implications of its budget decisions against the industry’s warnings of negative consequences for both legal operators and consumers.