25 Cent per Bet Tax: How Illinois Democrats Fumbled the Ball on Legal Sports Betting

On May 31st, the state of Illinois passed SB2510 which established a $55.2B budget for the government in 2026. The bill did nothing to address the structural problems with spending in the state and instead focused on short-sighted tax increases to attempt to balance revenue with the budget. Due to approaching deadlines, there was less than 24 hours for review of this bill. This is the recipe for how a 25 to 50 cent per sports bet tax was included in the bill purporting to raise an additional $36 Million in tax revenue. Sportsbook operators in Illinois must now pay 25 cents per bet for the first 20 Million bets they accept and 50 cents per bet for any bets in excess of this threshold. The 'per bet' tax adds to the tax burdens of sportsbook operators in Illinois which are already elevated relative to other states. Online only Illinois sportsbooks pay $20 million up front as a license fee just to operate in Illinois, but they can partner with land-based casinos to reduce this license fee to $10 Million. They remit 20-40% of their Gross Gaming Revenue (GGP) [wagers minus wins paid out] as a tax to the state of Illinois. Compare this to neighboring Iowa where sportsbooks are licensed at $45,000 and taxed at 6.75%.

And yet, even with the tremendous tax burden, some operators have been able to conduct business in Illinois.  Maybe that's what emboldened Illinois Democrats to include such a poorly considered additional tax which takes effect July 1st, 2025.

Let's analyze a $5 wager on a -110/-110 market like a spread for an NFL game. A typical hold (vig) for a sportsbook on a main market is 4.5%. Overly simplified, this means that in the long run, that $5 wager will make a sportsbook 22.5 cents. Already we can see that this wager isn't viable anymore. The sportsbook can't accept it as they will lose money just on the 'per bet' tax. This is before we start to consider all of the other taxes and expenses like marketing costs a business has to cover. Sportsbooks will be forced to respond. They can continue operations, but they must increase the hold %. They must also eliminate or reduce promotions which were a source of real value for sports bettors. They may instead choose to cease operations. 

This tax is a rare lose/lose/lose/lose as I see 4 groups who will be affected by this negatively in different ways.

Sharp Bettors - There are some of us who make a real side living or even a main income from gambling on sports. These people have been completely eliminated by this tax. The sportsbooks will be forced to eliminate promotions and increase hold size on markets to such an extent that it will be impossible for smart bettors to make money. So they will stop. The tax revenue they generated for the state of Illinois will completely dry up. Beyond just thinking of Illinoisians as wallets that can be reached into by the state, consider that these people and their families will now be worse off. They may decide to leave the state of Illinois completely, taking their income, sales, and real estate tax payments with them. 

Gambling Addicts - Not only does this law reach deeper into the pockets of those with gambling addiction, but it actively encourages destructive gambling behaviors. 25 cents on a $5 wager is 5% of the wager. With existing hold %, we can expect a gambling addict to lose 9.5% of their money over time with $5 wagers after this tax comes into effect. But something occurs to the gambling addict...if I wager $20, now I'm only losing 5.75% over time. $100...4.75%. The gambling addict won't think in those specific analytic terms, but they will see that this tax is diluted with larger wagers. Sportsbooks will likely have to impose minimum bets to deal with this tax. This tax encourages destructive habits for the most vulnerable among us.

Operators - Obviously the sportsbooks and their shareholders are completely devastated by this tax. They must now make hard decisions about whether to even continue business operations. The bigger operators - Fanduel and Draftkings - need to worry about what to do if they get to 20 million wagers as that's when the tax becomes 50 cents per wager - a figure so horrible I'm not sure what they even do. If I'm an executive at one of those companies, why even try to compete for more betting handle in Illinois? Shut down promotions. Bake extra vig into every bet. Consider predatory practices to increase revenue from losing bettors. Ban winning bettors.

The State of Illinois - This type of tax will actually decrease or keep flat the amount of tax revenue the state collects. Governments often think that they can raise taxes and raise taxes and that tax revenues will go up. But at a certain point, this is not the case [read: Efficient Tax Hypothesis]. This is the type of onerous tax that will force sports bettors en masse to flock to illegal sportsbooks and to those quasi-legal "Sweeps Coins" sites which are not protected and regulated by the state and for which the state sees no tax income. The amount of revenue that the state estimates to collect from this tax does not consider the sharp decrease the tax will cause in legal sports betting and the lost existing tax revenue therefrom. 

How bad will this get for legal sports bettors in Illinois? Let's examine the 2024 Sports betting Handle data.

I combined professional, college, motorsports and other events which are each reported separately into a pivot table to get the full picture for 2024. Tier 1 wagers are simply wagers on specific events with an outcome like a team to win or cover the spread. Tier 2 wagers are everything else like player props.

We can see that Fanduel (Fairmont) and Draftkings (Casino Queen) dominate sports betting in Illinois. This means 82.8% of the wagers taken in the state last year were above the 20,000,000 bet threshold. Therefore, Fanduel and Draftkings need to be acting at the margins and analyzing this tax at 50 cents. 

The mean wager in 2024 was $37.83. The median is likely much lower due to right skew, but we don't have that data.

On $40 -110/-110 wagers, the expected GGP for a sportsbook would be $1.80 [$40*.045]. Take away 50 cents in tax and they are left with $1.30. Take away another ~30% for GGP tax and they are down to $.76. Now consider that we haven't even addressed covering the cost of the massive license fees in the state. Additionally, it cost money to run a business. There are employees, real estate, technology and marketing costs.

So I think we will start seeing -115/-115 or (shivers) -120/-120 main markets. And the alternative markets which already have massive vigs, we may see -125/-125. Futures markets and other many-way markets like golf where it is easiest to hide the vig will be hit hard. There will have to be some kind of minimum bet which goes against every 'Responsible Gaming' PSA the hypocritical state of Illinois has put out.

After the tax takes effect and we observe these conditions, why would anyone except addicts wager on markets that will have to be 10%+ hold when you can go to sites like NoVig which have a good reputation and hold < 1%. These sites circumvent gambling laws by operating as peer-to-peer exchanges for bets. They can't accept cash bets, but they skirt this by accepting your money, converting into their own currency, and allowing you to bet with that. Then at withdrawal time you can convert their currency back to good ole' USD. There are drawbacks, however. If a legal Illinois sportsbook goes awry of the law in refusing to pay a bet, I can complain to the Illinois Gambling Commission and get my money. I would have no such resource with a non-sanctioned company. 

But this is where gamblers are being pushed to by the state of Illinois. Fewer wagers in a functioning, regulated system and more illegal or non-regulated wagers. The result is poorer, less free, and less protected Illinoisians and less tax revenue for Illinois. 

4th and Goal - College Football Week 3 Review Podcast

In which we review the 3rd week of college football.

Celebrations: A User's Guide

Are you a dominant world class athlete?  Do you ever win a tournament/championship/Super-Stanley-World-Bowl-Cup-Series and not know what to do next?  It can be hard to let out all the joy of winning gracefully, but fear not, for here is a step by step guide enumerating all the do’s and don’ts of how to celebrate your sport’s ultimate victory:

Tennis

Moment of Victory:  When the last point is won, immediately release your racket, lose control of all motor skills, and fall to the ground screaming.  If you do it right, it should look like you just got shot in the neck.  Continue writhing on the ground uncontrollably for a few seconds, then immediately compose yourself to hug your opponent and shake the line judge’s hand.


Your Opponent:  After losing a championship match, your opponent is physically and emotionally exhausted.  This is the perfect moment to give him shit for all his double faults and mock his comically high-pitched grunts.  That being said, keep it to yourself.  It’s likely that he’s 5 years younger, and he’ll eventually crush you.

Postgame Interview:  You’re probably European, in which case, your broken english is adorable and great for ratings.  Don’t fight it.

Kissing The Trophy:  Treat it like a “you may kiss the bride” moment.  It should be passionate, but remember, your parents are watching.  Easy on the tongue.


Basketball

Who To Thank:  As a general rule of thumb, God and family are always safe bets.  Thanking your teammates, coaches, and fans is all well and good, but considering your 1 in a billion size and stature, you probably owe a tip of the hat to your genetic code. 


Postgame Interview:  You will inevitably be given the opportunity to guarantee next year’s championship.  Do it!  History remembers the Joe Namath’s of the world and forgets the Anthony Smith’s.  Don’t know who Anthony Smith is?  Exactly.


Trophy Presentation:  Unlike some other sports, you will have to wait to hold the trophy until after your team’s owner.  This might seem unfair to the men who played the games and gave everything they had throughout a lifetime of dedication towards achieving this singular goal, but in the owner’s defense, he is incredibly wealthy.  

Golf

Do’s:  Get the crowd involved.  They’ve been standing around all day, slowly coming to the realization that they actually paid money to watch people play golf.  They desperately want to be entertained.  Give them a show by dancing around with your 9-iron clearly placed as a phallic symbol, jump into the pond, and make out with your trophy wife.  Basically, do everything Happy Gilmore did.

Don’ts:  Mess up your scorecard.  This is one the few ways you can actually lose after celebrating.  You might think it’s ridiculous that they’re making you keep your partner’s score since every shot is recorded on film, seen live by millions, and carefully counted by a man who follows you around all day, holding up a sign telling everyone exactly how many shots he’s taken, but none of that matters if you miscounted his attempted bunker flopshots on 7.

Champagne?  No.  Think about your audience watching at home.  Rich white men willfully wasting expensive alcohol at a private country club might come off a bit 1 percentish.

Hockey

Moment of Victory:  Throw your gloves, stick, and helmet in the air and go jump on your goaltender.  Don’t worry, it’s perfectly safe to have a dogpile with 20 large men who have sharpened knives on their feet.  

Postgame Interview:  You might also be European, but given your repeated facial injuries and imposing stature, your foreign accent just makes you seem like a Bond villain.  Keep your answers short and pass the mic to a Canadien.

Your Opponents:  Fuck ‘em.  Celebrate with your teammates for an extended period of time.  They will literally stand there and wait.  When you eventually go to shake their hands, keep it simple.  There’s no need to pretend you’re friends with the brute who slashed you in the back of the knee.  Also, avoid sarcasm at all costs.  They are still running on a dangerous high of adrenaline and testosterone.  One misplaced joke about a funny-looking playoff beard could result in a Todd Bertuzzi situation.


Baseball


Moment of Victory (fielding): Alright, this one can be complicated. First, look around. If there is no one within 40 feet of you, you are in the outfield and you need to sprint as fast as you can to the pitcher's mound. But keep in mind that you are a baseball player, and sprinting in straight lines is the number one cause of injury. Now, if you are an infield player, you must also run to the pitcher's mound. But, be weary! Beating the catcher the catcher to the pitcher is a big faux paus. As the pitcher, keep a wide stance. This will allow you to stay upright when the catcher comes in for a jump-hug.


Moment of Victory (walkoff homerun): This is your opportunity to thrust any dance move you'd like into the public sphere. You have 270 feet of jogging/sprinting/dancing/doing whatever the hell you want and people will love you forever afterwards no matter what you do. Me? I'd slide into every base and signal 'safe' after every one.

Olympics

Moment of Victory:  Wrap yourself in your nation’s flag and run around waving at the crowd.  (Do this even if you lose.  Seriously, being 7th best in the world at anything is awesome.)

On The Podium:  Try this out.  Invite the bronze and silver medalists to join you up on the top step.  Put your arms around each other and sing along to each other’s national anthems.  It’s a moving gesture of sportsmanship, a powerful stance of worldwide togetherness, and a great photo op.  At the very least, you’ll get a VISA commercial out of it.

*Fantasy* Football

Fantasy Football

                Have you ever fantasized about your favorite football team getting a new player even though you knew it was impossible?  No way!  Me too!!  We have so much in common!!!  But I’m not just talking about landing that elusive free agent or picking up a late round gem in the draft.  I’m talking about straight up fantasy.  Literary linebackers, fake field goal kickers, and conjured up cornerbacks.  I’m talking straight fiction. 

                If you were the owner of the Charlotte Charlatans, who would you sign to make a run for the Superbowl?  Here’s my roster.

Head Coach – Morpheus (The Matrix)

                Football gets emotional.  If he can stay calm, cool, and collected during a surprise Sentinel attack, then he can rally the troops when his team is down at halftime.  Plus, he sort of reminds me of Lovie Smith.

Offense:

Offensive Coordinator – Gandalf (Lord of the Rings)

                To be the offensive general, you need to be a strong leader, a wise play-caller, and every once in a while, provide a little magic.  Gandalf is your guy.  The only downside is that he can be a little stubborn about his run-first philosophy.  “YOU SHALL NOT PAAAASSSSSSSS!!”

Quarterback – Sunshine (Remember The Titans)

                Strengths:  Downfield Accuracy, Scrambling Speed, Dreamy Hair.

                Weaknesses:  Can’t execute a HB Toss, Questionably Homoerotic Locker-room Antics

Running Back – Pablo Sanchez (Backyard Football)

                Pros:  Best athlete of all time

                Cons:  Doesn’t speak English

                Ethnicity: Short

Offensive Line – 300 Spartans (300)

                With Leonidas at Center, these guys have proven that they can bring even the most enormous, terrifying, and physically deformed monsters from getting past them.  They are tailor-made for blocking defensive linemen.  Good luck getting to the quarterback.

Wide Receiver – Forrest Gump (Forrest Gump)

                Obviously, the kid can run.  Plus, with his ping pong champion caliber hand eye and focus, he’ll snag everything Sunshine throws his way.  Warning: His contract includes a 1 year sabbatical every other year for him to pursue personal endeavors.  Endeavors may include, but are not limited to, the following: Becoming a war hero, binge-eating of chocolates, co-founding shrimp businesses, narrating his own life, choreographing signature dance moves, banging chicks way out of his league, and ruining perfectly good leg braces.

Defense:

Defensive Coordinator – Griphook the Goblin (Harry Potter)

                Griphook knows how to run a defense.  He defends the vaults at Gringotts with an impervious system of foolproof securities.  It’s impossible to break in (Spoiler Alert: No, it’s not).

Defensive End – Rudy (Rudy)

                Height: 5 ’ nothin ”

                Weight: 100 pounds, nothin ounces

                Heart?  Yes.

Defensive Tackle – Jared the Subway Guy

                He qualifies as fake due to my sneaking suspicion that he was never actually fat.  His only proof is a doctored photo and a pair of jeans he stole from Jabba-the-Hut’s casual Fridays drawer.  I want to sign this fictitious 500 pound fat-monger to clog up those running lanes as much as his arteries. 

Linebacker – Bobby Boucher (The Waterboy)

                He once got 11 sacks in a game!

Cornerback – Del Spooner (Will Smith’s character from I Robot)

                A cornerback has to identify when the receiver is about to go deep.  Mr. Spooner is so good at sniffing out trouble that he predicted a robot revolution by using only his base-less paranoid suspicions.  Good luck fooling him with a halfback pass.

Safety – Smokey the Bear

                Only YOU can prevent breakdowns in coverage.

Extras:

Cheer Captain – Ms. Tucker (Tracy Morgan’s character from The Longest Yard)

                Team Spirit:  A+

                Creativity:  A+

                Gender:  TBD

Cheerleading Squad – The Toros (Bring It On)

                The Toros were awarded this position after narrowly beating out some tough competition.  Sidebar:  Their competition consisted of the squads from the four straight-to-video sequels of the Bring It On franchise. 

Sponsor – Vandelay Industries (Seinfeld)

Announcer – Harry Doyle (Major League)

Stadium – The Pearly Gates (The Bible)

                This will save time for players who would normally point to the heavens and/or go Tebowing.

The Top Athlete Presidential Candidates

Let's face it. American politicians suck. To steal a line from The Hunt for Red October, when they aren't kissing babies, they're stealing their lollipops. Terms like Washington outsider have become some candidates best asset. But really Washington outsider just means inexperienced politicians. Well, I assert that if you want the best Washington outsiders you should look to the community of American athletes. I assert that there is no group that the United States is more proud of than its athletes. Here are the best athlete candidates for president (after, of course, we pass the amendment making it possible to run for president before age 35):


Ron Artest: His name's about to be Metta World Peace. He'll bring peace to the middle east. If anyone can show a region how to change their violent ways, it's a man who once beat up the wrong Pistons fan after having a drink thrown at him.


Ricky Stanzi: the two best capabilities a president can have? The ability to field stupid questions and the ability to deliver a rousing GOUSA#1 peptalk. Here, the Chiefs QB shows both in thirty seconds. Imagine what he could do with 4 years.

Tim Tebow: With his religious fervor, he'll carry the bible belt. My guess is that he'll kill it in the primaries then get to the general election and find that he's way out of his league.

Antii Niemi: Sure, he may not technically be an American citizen, but with his glove speed, you can be sure that nobody's getting across the Mexican border.

J Leman: The former Illinois linebacker sure knows how to dress for the position.

The Nebraska-Iowa Rivalry, Named

This logical rivalry has been thrust upon the Hawkeyes by virtue of Nebraska entering the Big Twelve Ten. A trophy and name have yet to be crafted for this event. Sportswritten is here to help. Rick Reilly suggest naming it the Cornfrontation. Brilliant, but let's see if we can do better.

Names:
Farmageddon
Cornflict Resolution
The Cattle Battle
The Corntest
The StrHOGgle (admittedly forced, when you need capitals for people to understand your pun, something has gone horribly wrong)

And now, the flawlessly photoshopped trophy:

pictured: Kirk Ferentz with a gun, Bo Pelini yelling, corn

CONCACAF Gold Cup And Why You Should Care.

Look. I know you, Mr. American sports fan. You watch your baseball. If you live in the North, you watch your hockey. Of course, you'll watch basketball. And you haven't missed an NFL Sunday since 2003. Oh, and once every four years you'll watch a soccer game or two.

I'm here to tell you there is an important soccer tournament for the Americans happening right now. Stumptown Footy breaks it down more, well, thoroughly. But they use fancy words like world cup implications, automatic entry into the Confederations Cup, and qualifying. I'm not going to befuddle your mind with such European concepts. I'm going to base my argument off of one fact alone: bragging rights over Mexico.

If we concede that we are the inferior soccer team, it can and will only go downhill from there. From there, the Mexican economy will boom after they elect Dos Equis' most interesting man in the world president. The dollar will crash and Americans will be asking their bosses if they can be paid in Pesos, all leading to a Mexican invasion where the USA goes down in a swirl of taco-filled glory.

The following is a list of things Mexico is currently better than the USA at: poverty.

I know what you're thinking. Yes, I have taken my meds this morning.

Look. There is no sport where national pride is more a part of the game than soccer. And there may be no country that chooses to display more national pride than America.

I really don't think you'll be watching the 2011 American football world cup in Austria. USA won the last world cup in 2007 in OT over Japan (clearly, we send our best players).

The World Baseball Classic is alright, but many of the best players don't play and the USA hasn't finished in the top 3 in the WBC's history.

Olympic basketball is fun, but where's the competition?

If you're a patriot, you need to be watching soccer, the game that the entire world measures each other with.

USA vs. Panama semifinal is tomorrow (Wednesday) at 7 PM ET. Watch. Or take a dump on the American flag. The choice is yours.

(maybe, I did forget to take my meds...)