Pritzker Signs Illinois’ $55.1 Billion Budget with Sports Betting Tax Hike
Governor JB Pritzker signed Illinois’ record-breaking $55.1 billion budget for 2026, greenlighting a new sports betting tax expected to rake in $36 million.
A Historic Budget Takes Shape
Governor JB Pritzker put pen to paper on Monday, locking in Illinois’ largest-ever budget at $55.1 billion for fiscal year 2026, starting July 1. The spending plan, backed by $55.3 billion in projected revenue, leans on $709 million in new taxes, including a fresh levy on sports betting.
“Illinois shows a better way: balancing the budget while keeping programs people rely on,” Pritzker said, defending tough calls. Passed by Democrats just before midnight on May 31, the budget drew Republican ire for its tax hikes.
The budget’s sports betting tax, effective July 1, 2025, charges operators 25 cents per bet for the first 20 million wagers annually and 50 cents for each bet beyond that. Expected to generate $36 million, it primarily targets FanDuel and DraftKings, the only platforms handling over 50 million bets each in 2024.
Analysts estimate the tax will cost FanDuel $77 million and DraftKings $68 million yearly, potentially rising to $86 million and $79 million in 2026. This marks Illinois’ second sports betting tax hike in a year, following a July 2024 shift from a flat 15% to a progressive 20%-40% rate.
FanDuel and DraftKings Push Back
FanDuel and DraftKings, stung by the tax, plan to slap a 50-cent transaction fee on Illinois bettors starting September 1, to offset costs without cutting margin. “Illinois has tripled our tax rate,” DraftKings CEO Jason Robins said.
Both companies vowed to drop the fee if the tax is repealed, a move to pressure lawmakers. The fee hits low-stake bettors hardest – a $2 bet now costs $2.50, a 25% markup.
Operators warn it could drive players to unregulated offshore sites, which dodge taxes and consumer protections.
Why Illinois Needs the Revenue
Illinois’ $55.1 billion budget, up from $53.1 billion in FY2025, funds schools, healthcare, and pensions while tackling a $1.8 billion deficit. The sports betting tax, part of $709 million in new levies, joins taxes on video gambling and corporate loopholes.
Sports betting, legal since 2019, generated $1.5 billion in 2024 revenue and $557 million in taxes, with FanDuel and DraftKings holding 78% market share.
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