The Sports Betting Alliance today warned that Illinois’ high sports betting taxes are hurting fans and undermining the legal sports betting marketplace after new state data showed a second consecutive 15% drop in bets following recent tax hikes. The data is a serious concern, according to a prominent responsible gaming expert, who warned that Illinois’ recent tax hikes undermine the rigorous system of consumer protections on the legal sports betting market as bettors seek cheaper, unregulated betting options.
The Illinois Gaming Board’s October 2025 Sports Wagering Report showed 6.4 million fewer bets were placed in the state when compared to October 2024. The data supports the now-recurring trend from September 2025, when IGB data revealed a 15% decrease in sports betting, or 5 million fewer bets, when compared to September 2024. The September 2025 data was the first full month of activity reported following implementation of Illinois’ new per-wager tax on sports bets.
Enacted in July 2025, the per-wager tax was fully implemented on September 1st of last year. Companies implemented the tax by adding fees or raising the minimum amounts required to place a bet on their platforms. The decline in betting activity since that time is a dramatic departure from trends in other states.
“The IGB’s recent data illustrates more alarming evidence that tax hikes are creating a lose-lose situation for fans, where they’re either being forced to pay higher fees or left to abandon the legal sports betting market,” the Sports Betting Alliance said in a statement. “This a warning sign, and with Chicago city leaders lumping even higher taxes on fans, Illinois lawmakers are putting at risk the very sturdy regulated market they’ve built since legalization.”
Since sports betting was legalized in Illinois, a graduated tax on the industry was passed in 2024 followed by the per-wager tax. A third Chicago tax was implemented January 1 of 10.25% on sports betting in city limits. The Sports Betting Alliance is challenging the tax in court.
National responsible gaming expert Keith Whyte has raised concerns that Illinois’ sports betting tax hikes are undermining consumer protections in the legal market.
“Illinois lawmakers should strive for a legal sports betting framework that encourages responsible play at comfortable stakes for the bettor,” Whyte said. “But these taxes raise the price of participation, pushing customers to place higher bets that could be out of their comfort zone. I can envision situations where this required higher spending increases the chance of harm for those who might encounter problems – the exact opposite of what we should want from a legal, regulated market.”
Whyte also warned that raising sports betting taxes could push bettors from the legal, regulated market back to cheaper unregulated, illegal channels like bookies and offshore betting websites – further undermining the state’s legal sports betting framework and long-term revenue prospects. October’s decrease in betting volume confirms this trend.
The illegal sports betting market has been the target of concern of the FBI and Illinois’ top consumer advocates. The FBI recently issued a warning to the risks of the illegal market, noting that “individuals engaged in illegal gambling risk funding organized crime activity and becoming vulnerable to violence, extortion, and fraud.” In addition, the Illinois Attorney General was among 50 state attorneys general across the country who called on the U.S. Department of Justice to take action against the illegal market because of the impact on consumers. The Better Business Bureau of Chicago and Northern Illinois has also recently reported a growing number
of online illegal gaming sites are scamming consumers’ money, following more than 10,000 complaints to the BBB from 2022 to mid-2025.