Illinois may soon abandon one of its most controversial betting taxes. Following months of declining wagers, state lawmakers are advancing a bill to repeal the per-bet sports wagering tax that many say has driven bettors away.

House Gaming Committee Chairman Daniel Didech introduced HB 5143 last week in Springfield, seeking to eliminate the $0.25 and $0.50 surcharges currently levied on mobile sportsbook operators. The extra charges, added unexpectedly to Governor JB Pritzker’s 2025 budget package, have generated over $62.2 million in revenue in just half a fiscal year—well above the $40 million projected for the entire period.

Yet behind that seemingly strong figure lies a troubling trend: Illinois’s sports betting volume has dropped steadily for four consecutive months, marking the most significant slowdown since the state’s markets opened in 2020.

Betting Decline Undermines Tax Goal

A Four-Month Downturn

Between September 2025 and January 2026, Illinois recorded 27.6 million fewer bets compared to the same months the previous year. Overall, 2025 saw a 4.1% decline in wagers, costing the state $6.9 million in lost tax revenue.

Legislators say this drop undermines the purpose of the surcharge, which was supposed to boost state collections but instead appears to have discouraged participation.

Surcharge Costs Passed to Players

Rising Costs Across Leading Operators

When the per-bet tax took effect, sportsbook operators responded quickly—by passing the burden on to players.

  • FanDuel and DraftKings added a $0.50 fee per wager
  • Caesars, Fanatics, and bet365 imposed $0.25 per bet, with bet365 applying it only on wagers under $10
  • TheScore and Hard Rock Bet raised minimum bets to $1 and $2, respectively
  • BetMGM raised theirs to $2.50, and Circa up to $10
  • Even BetRivers, favored among casual bettors, increased its minimum bet to $5

These adjustments have frustrated recreational bettors, many of whom see the added fees as an unnecessary financial penalty. The double tax hit came just a year after Illinois replaced its flat 15% gaming tax with a tiered system that pushed top operators into paying rates as high as 40% on revenue.

Didech Expands Focus to Prediction Markets

HB 5142 Aims to Regulate New Betting Platforms

In parallel, Rep. Didech’s HB 5142 seeks to redefine prediction markets—platforms like Kalshi, Polymarket, and Crypto.com—as part of Illinois’s regulated sports wagering industry.

The bill clarifies that any transaction resembling a derivative, option, or binary contract will fall under the state’s sports wagering laws. It covers:

  • Peer-to-peer transactions, where players bet against each other instead of the operator
  • Non-counterparty marketplaces marketed as “investment” or “forecasting” platforms
  • Exchange-style platforms that allow speculative outcomes similar to sporting wagers

Regulators have been cautious about such markets. The Illinois Gaming Board has already issued cease-and-desist orders to several prediction-based operators, warning sportsbooks against any form of partnership with them.

Regulatory Pressure Rises

The crackdown began in early 2025 with warnings to Kalshi, Robinhood, and Crypto.com. In January 2026, Polymarket also received a cease-and-desist notice, though no lawsuits have yet followed.

Didech’s new proposals suggest the legislature wants to create a clear legal framework before prediction markets evolve into a grey area beyond state oversight.

Summary

Illinois lawmakers are pushing to reverse the per-bet sports wagering tax, citing declining participation and frustrated bettors. The move, coupled with efforts to regulate prediction markets, reflects a broader attempt to stabilize Illinois’s gaming ecosystem and make wagering more sustainable for both operators and players.