- Illinois became the second state to record at least $1 billion in sports betting tax revenue, after New York.
- The state implemented the country’s first progressive tax system for sports betting, with rates climbing from 20% to 40%.
- Most tax revenue flows into Illinois’ general fund, supporting healthcare, education and pensions across the state.
CHICAGO — Per the October sports wagering revenue report from the Illinois Gaming Board, Illinois has surpassed $1 billion in tax revenue since legalizing wagering in 2020.
Over its first five years, Illinois has pulled in nearly $1 billion in betting taxes, landing it in second place nationwide behind only New York’s $3.2 billion haul.
Illinois is third in the country in terms of legal sports betting handle (behind New York and New Jersey) and revenue with $55 billion and $4.7 billion reported, respectively.
Illinois’s unique and aggressive tax policy helped it get to this point. With rates beginning at 20% and rising to 40% for the highest-earning operators, the state became the first in the country to adopt a progressive tax system.
In contrast, nearby Iowa sportsbooks only pay a 6.75% rate on revenue, and that won’t rise to 9% until the summer of 2026.
Cashing In
This past July, the state went one step further and implemented a new per-bet fee. Sportsbooks now pay 25 cents for the first 20 million bets they receive each year, after which they pay 50 cents. In its first month alone, the fee brought in almost $5 million.
The majority of the tax money from legal Illinois sports betting goes straight into the state’s general fund, which supports pensions, healthcare, and education. A significant and consistent source of income, it’s helping a state that has long struggled with budgetary issues.
