iGaming Weekly Recap (June 2–8, 2025): Chicago, We Have a Problem

Governor J.B. Pritzker and Illinois lawmakers have introduced a new sports betting tax that charges operators for each individual bet. The new fee is 25 cents per bet for the first 20 million bets annually, then 50 cents for each bet beyond that. This change was included in the state’s $55.2 billion 2026 budget to raise an additional $36 million annually, addressing a $1 billion budget deficit.

This isn’t Illinois’ first tax hike. Just last July, the state implemented a progressive tax, raising rates from a flat 15% to 20%-40% based on revenue. The new per-bet fee, introduced less than a year after the previous increase, further burdens operators, making Illinois’ tax regime one of the harshest in the U.S., surpassed only by New York’s 51% rate. Governor Pritzker’s team argues it’s about fairness, ensuring corporations pay their “fair share” in Illinois.

Brian Quintenz’s Senate confirmation hearing is scheduled for June 10, 2025, at 3:00 PM Eastern Time (EST). It will take place before the Senate Agriculture Committee in the Dirksen Senate Office Building.

Selected by President Donald Trump for the role of Commodity Futures Trading Commission (CFTC) chairman, Quintenz’s hearing aims to vet his candidacy for the position, to which he would return after serving as a commissioner from 2017 to 2021. He is set to replace Rostin Behnam, who stepped down in February.

Arizona, through its gaming regulator (Arizona Department of Gaming – ADG), has called on federal authorities, specifically the Commodity Futures Trading Commission (CFTC), to impose a federal ban on prediction market platforms like Kalshi, Crypto.com, and Robinhood.

Arizona argues that these platforms, which allow users to purchase contracts tied to sports event outcomes, constitute illegal gambling, a crime in the state. They are said to bypass Arizona’s 2020 Gaming Act and operate without licenses or proper safeguards.

Senate Bill 1235 (SB 1235) passed unanimously in the House of Representatives (146-0) and previously in the Senate (36-0). It now sits with Governor Ned Lamont, awaiting his signature or automatic enactment without a veto. The governor has 15 days to decide. If signed, the bill will take effect on October 1, 2025. While Lamont hasn’t signaled his intentions, the bill’s unanimous, bipartisan support makes a veto highly unlikely.

The situation for sweepstakes is rapidly deteriorating. In recent weeks, Montana also banned sweepstakes through Senate Bill 555, effective October 1, 2025. In Louisiana, Senate Bill 181 passed the Senate (99-0) and awaits Governor Jeff Landry’s signature. In Nevada, Senate Bill 256 has been sent to the governor.

Rhode Island plans to open its online sports betting market, inviting three to five new operators. The goal is to end the current monopoly held by International Game Technology (IGT), which operates through Sportsbook Rhode Island. The change is set for January 31, 2026, when IGT’s contract expires.

The Rhode Island Senate passed Senate Bill 748 by a 30-2 vote on June 4. However, the bill now faces hurdles in the House of Representatives. A companion bill (H6048), introduced by Representative Matthew Dawson, awaits action in the House before the session ends on June 30. The House Speaker has questioned the necessity of the legislation.

Bonus: Nobody Will Save the Betting Industry If It Doesn’t Save Itself

Illinois’ new sports betting tax was, without a doubt, last week’s most shocking and significant news. Operators in the state took a critical hit and will soon pay a steep price for their presence in the Prairie State.

The way this unfolded starkly exposes the risks facing companies in the betting industry. No matter how much you already pay in state taxes, how many responsible gaming campaigns you run, or how loudly you warn about offshore operators, prediction markets, or sweepstakes, any random day you could wake up slammed with a crippling tax rate. Without public debate, as seen with last year’s Illinois tax hike, and without broader consultation, lawmakers or the governor can slap you with new fees to patch a budget deficit. This is operational risk, and as a sports betting company in the U.S., you have to live with it. Does Illinois’ change have a deeper purpose? For now, it seems not.

Let’s outline the potential consequences and side effects of this tax hike.

• FanDuel and DraftKings will pay the state 50 cents for every bet placed – operators will need to offset these costs, and players will likely bear the brunt of it.
• The Illinois market has been active since 2019, so promotional spending isn’t significant – operators won’t save much there.
• The infamous surcharge model, which DraftKings tried to push last year, remains an option – will operators opt for such transparent cost-shifting to players? That’s questionable.
• Additional costs will be spread through higher margins – players will face worse odds.
• Players have more options today and may turn to alternatives – Illinois is hiking taxes amid the rise of prediction markets, sweepstakes, Daily Fantasy Sports, and offshore operators, none of which generate state tax revenue.
• Low-stake bets won’t be profitable for operators – or for players if costs are passed on transparently. How can we discuss responsible gaming while promoting high-stake play?
• Smaller operators will pay the tax even with zero revenue – FanDuel and DraftKings will survive, but the real trouble begins for the long tail of operators.

We doubt lawmakers or the governor considered even two of these consequences. Illinois’ tax hike will trigger a cascade of unintended effects they likely never contemplated. In moments like this, no one will lose sleep over the betting industry’s fate. Nobody will care for it if, in this complex market landscape, the industry doesn’t more effectively care for itself.