Legislators in Illinois and Louisiana have passed bills that raise tax rates on sports betting operators. In Illinois, the increase was approved as part of a $55.2 billion budget package. The package also hiked taxes on nicotine products and businesses. Lawmakers dealt with rising costs of education, state pensions and health benefits for government workers. Additionally, there was uncertainty about how much the state would receive from the federal government in the future. As a result, the state saw a 3.9% spending increase. “I am very pleased to be able to present a balanced budget crafted to be fiscally and socially responsible, because we see the decisions made in Washington right now are neither,” House Majority Leader Robyn Gabel said. “Erratic leadership in Washington has affected our economic outlook, our revenue projections, and even threatened federal funding for our most crucial services.” Illinois Taxes Operators On A Per-Bet Basis
The budget includes a 25-cent tax on wagers for an operator’s first 20 million bets. Then, it taxes each wager at a 50 cent clip. Like in other states, most bets are through
online sports betting platforms. Thus, this tax hike will impact the state's larger online operators more than its retail counterparts.
Additionally, the state raised taxes on tobacco and vaping products from 36% to 45%. Lawmakers added a $1.50 fee on food and package deliveries, taxed electric vehicle charging, and upped other taxes as well. The budget bill now heads to the desk of Gov. JB Pritzker, who has said he would sign the bill. 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. The increase puts online sports betting at the same tax rate as casino gaming at live casinos in the state and came after negotiation with operators, according to Sen. Stewart Cathey. An earlier version pegged the tax rate for the industry 32%, but that was reduced in the house. “It was worked out with the industry in agreement,” he said. “There is no opposition.” Louisiana Increase Will Help Fund College Athletics
The bill outlines that 25% of revenue will be used to fund Division I universities. The new Supporting Programs, Opportunities, Resources and Teams (SPORT) Fund will earmark dollars for scholarships, insurance and medical coverage, and facility renovations. However, those funds won’t be used for paying collegiate athletes even after a federal judge recently ruled that colleges can pay athletes for competing along with payments for the use of names, images and likenesses (NIL). “It is specifically in the legislation that it cannot be used to fund NIL or to make direct payments to athletes,” Cathey said. “Absolutely not, I’m fundamentally opposed to that and would not have put my name on anything that allowed that.” Louisiana and Illinois join other states mulling sports betting tax increases. Maryland recently raised the rate from 15% to 20%. New Jersey Gov. Phil Murphy is also seeking to hike the levy on sports betting from 13% to 25%. The tax on online gaming would also rise from 13% to 25%.
