New Illinois Transaction Fee Takes Effect July 1, 2025
Starting July 1, 2025, FanDuel bettors in Illinois will face a $0.50 transaction fee per wager, following the state legislature’s introduction of the Illinois Transaction Fee. The decision has drawn sharp criticism from Flutter Entertainment, FanDuel’s parent company, with CEO Peter Jackson warning that the move could drive bettors toward unregulated offshore books.
The fee, intended to generate additional state revenue, will apply to all online sports bets placed within Illinois. While operators have the choice to absorb the cost themselves, FanDuel—the largest U.S. sportsbook by market share—has opted to pass it directly to customers, setting a potential industry precedent.
Flutter CEO Warns of Unintended Consequences
In a strongly worded statement, Peter Jackson expressed disappointment, arguing that the fee disproportionately affects casual bettors while undermining the legal market’s growth.
“We believe the Illinois Transaction Fee will likely motivate some customers to bet with unregulated operators,” Jackson said. “These offshore books don’t pay taxes, ignore the fee, and fail to provide consumer protections that regulated operators do.”
Industry analysts agree that micro-transaction fees could deter low-stakes bettors, who may find the additional cost unsustainable over time. Meanwhile, high-volume players could see their potential profits shrink, especially on smaller, frequent wagers like prop bets and parlays.
Mixed Reactions from Rival Sportsbooks
While FanDuel has chosen to directly charge players, not all operators are following suit:
DraftKings has hinted at transparency but hasn’t confirmed if it will impose the fee.
RSI (Rush Street Interactive), which operates BetRivers, has pledged to absorb the cost rather than pass it to users.
This divide raises questions about competitive fairness. If some books charge the fee while others don’t, Illinois bettors may migrate to operators with no added costs, disrupting market dynamics.
Will the Fee Push Bettors to Offshore Books?
A major concern is whether the $0.50-per-bet charge will incentivize players to seek out unregulated sportsbooks, which:
✔ Don’t impose the fee
✔ Often offer better odds & bonuses (due to no tax burdens)
✔ Lack consumer safeguards (no dispute resolution, risk of non-payment)
The American Gaming Association (AGA) has long warned that excessive taxation and fees can drive bettors to illegal markets. In 2023, the AGA estimated that $511 billion was wagered illegally in the U.S., dwarfing the $93 billion handled by legal operators.
Broader Implications for U.S. Sports Betting
Illinois is not the first state to experiment with per-bet fees—some jurisdictions have tried (and later repealed) similar measures after seeing reduced betting activity. If the fee leads to lower handle or increased black-market play, other states may reconsider similar proposals.
For now, the focus is on July 1, when the policy takes effect. Key questions remain:
Will other major operators (Caesars, BetMGM) follow FanDuel’s lead?
Will Illinois adjust the fee if legal betting revenue declines?
Could this set a trend for other states exploring new gambling taxes?
Conclusion: A Risky Gamble for Illinois
The Illinois Transaction Fee represents a test case for how additional costs impact the regulated sports betting ecosystem. While the state aims to boost revenue, the risk of pushing bettors offshore could backfire, reducing overall tax income and weakening consumer protections.
As FanDuel prepares to implement the fee, the industry will be watching closely—not just in Illinois, but across the U.S.—to see whether this move stabilizes or destabilizes the legal sports betting market.
