With Illinois increasing its sports betting tax rate via a tiered system – joining Ohio as states to recently increase their online sports wagering tax rate – industry stakeholders are asking the same question: Will more states follow?
The answer isn't a straightforward yes or no, but there's skepticism among industry insiders about widespread sports betting tax increases. DraftKings CEO Jason Robins said in early May, during the company's Q1 earnings call, that he expected minimal tax rate hikes nationwide.
“I expect that maybe there’ll be one or two here and there that look to do that, but I don’t think many of them will,” Robins said.
He also shared a belief that DraftKings and sports betting lobbyists would “be able to convince [state lawmakers] that it's not a good policy decision.” Robins and other industry stakeholders believe elevated tax rates can hurt the industry, causing negative effects like reduced innovation, fewer promotions, and worse odds. All of those consequences could, in theory, offer a major benefit to illegal sportsbooks and hurt a state’s legal betting apps.