Illinois Gets New Sports Betting Player

Illinois sports betting scene gets a new player — and it’s one that’s quickly making a name for itself in the United States market. We’re talking about Bet365.

If you’ve ever been to Europe or just follow soccer on the continent, you’re surely familiar with the UK-based Bet365. They are one of the biggest bookmakers across the ocean, but they’re starting to make waves stateside.

Bet365 enters the market after partnering with retail sportsbook Walker’s Bluff Casino Resort. This means that not only will Bet365’s app be live across the state, but it will also run the local casino’s physical sportsbooks. Let’s dig deeper into what Bet365’s end game is here.

Bet365 Growing Rapidly In The United States

After the Illinois Gaming Board approved bet365’s license, that marked the 12th state that the operator has now entered in the United States. All of this has been done in the last two years, mind you. In 2023, they launched in five states, followed by six more in 2024. Here’s where they are nowadays:

• Arizona
• Colorado
• Indiana
• Iowa
• Kentucky
• Louisiana
• New Jersey
• North Carolina
• Ohio
• Pennsylvania
• Virginia

Throw in its license in Ontario, Canada, and Bet365 now has a decent foothold in North America. For the longest time, current leading sports betting apps, waited on Bet365’s expansion. They struck a license with New Jersey in 2018 when legal sports betting became a thing. But it would be another five years before they expanded.

Why the long wait? Well, we don’t know. Having an early-mover advantage matters big-time in this industry — and one of the reasons why DraftKings and FanDuel are out ahead of the competition. But perhaps, in waiting, Bet365 has gotten a better handle on the American sports betting market.

How Bet365 Fits Into Illinois

Illinois has one of the most crowded sports betting markets in the whole country. Bet365 marks the 15th different sports betting license in the state. Right before Bet365, the state took in the Hard Rock Bet. Like Bet365, Hard Rock is in expansion mode. They have a monopoly on Florida, but Hard Rock now wants more.

In the state of Illinois, both operators are entering one of the nation’s most lucrative marketplaces. Since going live in March 2020, the state has produced $41.3 billion in handle and $3.4 billion in sports betting revenue. Outside of New York, few states are doing numbers quite like Illinois.

The state released its October numbers (they always report with a lag) and it was a monstrous month. The October handle was $1.45 billion — blowing out the previous high of $1.37 billion set in November 2023. The number was up 24.5 percent year-over-year.

Ironically enough, the state and operators didn’t make a killing off this huge revenue number. Revenue — as in the money that’s kept after paying out bettors — was only $81.4 million. That’s a hold of 5.6 percent, which is awful (the eighth-lowest ever in state history). For comparison, this revenue was down 40 percent from the month before.

Still, don’t hold the state to that number. It was a result of the sportsbooks taking some bad losses on NFL bets — underdog wins are usually a boon to bettors. It’s not indicative of what’s to come in the state for Bet365 and Hard Rock. But…. there is one more thing waiting for the new operators.

Illinois Tax Rates Are Among Highest In The Nation

Illinois and Governor JB Pritzker dropped a bombshell on the industry this summer. That’s when it signed a new state budget into law. In that budget was a brand-new sliding tax. This went away from a flat tax rate of 15 percent which was the way from 2020 to mid-2024.

Under this new tax rate, Illinois taxes operators anywhere from 20 to 40 percent based on their revenue. Here is how the sliding scale breaks down:

• 20% tax on gross revenue (not profits) up to $30 million
• 25% tax on gross revenue up to $30 million to $50 million
• 30% tax on gross revenue up to $50 million to $100 million
• 35% tax on gross revenue up to $100 million to $200 million
• 40% tax on gross revenue above $200 million

This applies across the board to all sports betting revenue — both retail and online. However, the tax rates are calculated separately for each. For example, take DraftKings, which is the current leader in Illinois. Its tiny retail operation at Casino Queen falls under the 20 percent tax bracket, while its online revenue is hit with a steep 40 percent rate.

On the high end of that 40-percent rate, Illinois enforces the second-highest tax in the nation for an open betting market, trailing only New York’s 51% rate. New Hampshire also applies a 51% tax, however, its market isn’t completely open — ironically, only DraftKings is allowed to operate here.

Bet365 won’t be sniffing that 40 percent rate anytime soon though. Coming in this late guarantees they’ll start at 20 percent. They have a long climb to get up the tax bracket and we’ll just have to see how they execute on their Illinois strategy.