The two largest U.S. online sportsbooks are making it more expensive to bet for Illinois gamblers.

Recently, the Illinois legislature passed a budget that increases the tax rates on sports betting operators. However, instead of increasing the standard rate, like other states have done, Illinois implemented a per-bet tax on the operators.

For the first 20 million bets an online sports betting operator accepts, they will pay 25 cents to the state. For each wager beyond that, the tax jumps to 50 cents. Gov. JB Pritzker said he would sign the bill, which would initiate the new tax.

In response, FanDuel and DraftKings are implementing a 50-cent transaction fee for all bets placed with their Illinois platform. The fee is supposed to offset the effects of the levy and will kick in on Sept. 1 and apply to all bets, win or lose.

In other words, the two largest companies are passing more the tax onto the bettor. Additionally, it makes winning bets in the long run even tougher, especially with small-stakes bettors.

In poker terms, FanDuel and DraftKings are increasing the rake.

FanDuel CEO Believes New Tax Is Too Much

"It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth and maximize revenue for states over time," said Peter Jackson, CEO of Flutter ENtertainment, parent company of FanDuel. "We are disappointed that the Illinois Transaction Fee will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state.”

Along with making each bet more costly for Illinois gamblers, FanDuel also noted that bettors may now take their action to offshore, unregulated operators.

"We also believe the introduction of the Illinois Transaction Fee will likely motivate some Illinois-based customers to bet with unregulated operators,” Jackson said. “These operators do not contribute tax revenue to the state, will not collect the newly announced transaction fee and do not offer the same levels of customer protection that regulated operators provide."

The Sports Betting Alliance trade group noted that the transaction fee would more negatively affect recreational bettors wagering smaller amounts. The group noted that many of those bet just a few dollars, and the fee would be a large percentage of those wagers.

Tax Casts Uncertain Future On IL Sports Betting

Las Vegas casino owner Derek Stevens’ Circa Sports also operates in the state. While his company hasn’t yet introduced a transaction fee, he’s also unsure about the future of sports betting in Illinois.

"I don't know in Illinois if sports betting is viable in the current environment," Stevens told ESPN .

The industry has faced tax increases in some states over the last few months. In Louisiana, the state senate approved increasing the sports betting tax rate on Sunday from 15% to 21.5%. The house approved the measure on May 20 and the senate didn't make any changes to the bill.

Maryland has also seen a sports betting hike from 15% to 20%, but that was less than what Gov. Wes Moore had been seeking.