DraftKings chief executive officer (CEO) Jason Robins has hit out against Illinois’ new sports betting tax, calling it “incredibly ill-conceived.” He warned that the new levy will hurt both the industry and everyday bettors.
In a candid interview with CNBC, Robins said, “It just makes no sense. It was done in the dead of night,” He added, “We had no warning. We actually met with legislative leaders in the weeks before the budget was released, and they made no mention of this.”
As part of its fiscal year 2026 budget, approved by the legislature and set to be signed by Governor J.B. Pritzker, Illinois will introduce a per-wager tax taking effect on 1 July 2025. This new levy imposes a charge of 25 cents on each of the first 20 million wagers accepted by an operator during the fiscal year, escalating to 50 cents per wager for any volume exceeding 20 million. State officials anticipate this measure will generate over $36 million in annual revenue for Illinois’ General Revenue Fund.
Impossible to turn a profit without increasing fees: Robins
Robins has argued that the implemented tax makes it impossible for companies to turn a profit without increasing fees for users. As a result, both DraftKings and FanDuel have announced they will introduce a 50-cent surcharge on every bet starting 1 September. However, the companies have said they were willing to drop the fee if a compromise is reached. Apart from that, he believes the move would drive users toward unregulated, offshore betting sites.
“All it’s going to do is drive people to the illegal market or drive people to bet more. It just makes no sense and it was done in the dead of night. We had no warning, actually met with legislative leaders in the weeks before the budget was released, and they made no mention of this, so it’s sort of crazy how it all went down,” he added.
Robins explained the issue using a simple example, “Say somebody wants to make a bet of $1. The actual profit margin on that bet is probably about 10 cents.” He added, “You’re getting charged 50 cents plus a tax on the 10 cents. Even at $10, the math doesn’t really work. You have to pass some of that along to the consumer. Otherwise, you can’t take that bet no matter what your size and scale is.”
Market reaction to tax hike
The announcement of this new tax had triggered an immediate and pronounced negative reaction in the financial markets, resulting a decline of nearly $3 billion in combined market capitalisation. It marks the second consecutive year that Illinois lawmakers have increased taxes on regulated sportsbooks. In the preceding fiscal year, Illinois transitioned its sports betting tax structure from a flat 15 percent rate to a progressive tiered system, ranging from 20 percent to 40 percent based on adjusted gross revenue. This progressive framework already guaranteed that more substantial sportsbooks, producing greater revenues, bore a larger tax load.
