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The state of Illinois has been winning big this football season. For one, its local team, the Bears, is an actual playoff-contending team now after a few years of downright mediocrity. Quarterback Caleb Williams has had some growing pains, but the potential to be a long-term answer has certainly flashed.
Elsewhere on the football side, the sport has contributed to an all-time number in sports betting for the month of September. As we’ll cover in this article, Illinois’ sports betting market is sitting really pretty right now.
Revenue Marks Set In September
The record that Illinois set comes specifically in betting revenue — not handle. For those unaware, there’s a major difference between the two figures. Revenue is the money that the state and operators get to keep. Handle, on the other hand, is just the total number of money wagered.
The Illinois Gaming Board reported both numbers in November (there’s always a month-long lag on the data). The eye-popping number is $136.4 million. That’s the record-setting revenue figure that was set by both mobile app and retail sportsbooks inside the state. This barely beat out January’s $135.2 million total.
Here’s the thing: the NFL season started a few days into the month, September 5 to be exact. But the real week 1 slate of games wasn’t until that Sunday on September 8. So realistically, Illinois missed one week of NFL betting and STILL set the record. What happens in October, November, and December when the NFL is uninterrupted the whole month? That’s right, probably new records. We don’t expect this $136.4 mark to last very long.
Despite this number, the state was not been able to set a new record in betting handle, which finished at $1.31 billion. This is a hair under the all-time figure of $1.38 billion, which was established in November 2023. Despite this, Illinois was able to eclipse the revenue record because of an impressive hold of 10.4 percent. Hold means the percentage of money that’s kept versus paid out to winning bettors. This is the first time the state has hit double digits in hold since June of this year.
The NFL bump is real. September’s betting handle was 49.2 percent more than August of this year when the NFL was only in preseason form. But since we’re comparing numbers, here’s a really startling one: the handle was up 21.5 percent versus September 2023. This is a clear sign that the state’s sports betting scene is still in growth mode, not stagnation.
Another handy thing the board reported is what sports are contributing to these numbers. Professional sports, namely NFL, were responsible for $1.12 billion of the bets placed. College sports were a meager $177.1 million of the total. Motor racing chipped in $753,685 and “other” sports were penciled in at $5.3 million.
Illinois Benefitting From New Tax Rate
The state made waves during the summer when it approved a brand-new tax rate on sports betting. Previously, the state had a flat tax rate of 15 percent. But ever since going into effect in July, Illinois now has a progressive tax based on an operator’s revenue. The scale goes from 20 to 40 percent (the more revenue a platform has, the higher the tax bill). The new rate means Illinois now has one of the highest tax rates in the country for gambling.
We say it made waves because the entire industry took notice. For one, many other states began contemplating doing the same. For instance, sports betting in Louisiana is currently kicking around the idea of higher taxes. Sportsbook operators responded too, none more than DraftKings. The popular platform briefly introduced a sports betting tax of its own in states with unfavorable rates like Illinois. Bettors would be taxed on bets made was the original plan before DraftKings called the idea off due to backlash (and a lack of competitors doing the same tactic).
Anyways, back to Illinois. Thanks to the blowout September performance and the increased tax rate, Illinois will collect $37.3 million in taxes for the month. Want to know what the number was a year ago? A much more measly $12.9 million. So we’re talking a 3X jump, largely because of the new tax rate. Not bad, not bad at all.
DraftKings, FanDuel Lead The Way
The two operators hit the hardest by the new tax rate are undoubtedly the two leaders, DraftKings and FanDuel. Due to their high revenues, they are bucketed into the highest tax bracket of 40 percent. But don’t worry too much for them as both eclipsed $400 million in betting handle in September, though DraftKings came dangerously close to $500 million — $494 million compared to FanDuel’s $403 million.
Yet, FanDuel actually beat out its rival in revenue. They’ll keep $53.7 million due to a higher hold, whereas DraftKings profited $47.7 million. How FanDuel is able to have such a high hold in markets across the country is needs to be studied.
Fanatics is nowhere near these two, but they’re showing steady growth. The platform set personal highs in Illinois with a handle of $95.4 million and revenue of $10.6 million. BetRivers is fourth in revenue followed by BetMGM and Caesars.
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