DraftKings CEO Criticizes Illinois Sports Betting Tax Plan as "Ill-Conceived"

DraftKings CEO Jason Robins has strongly criticized Illinois' newly passed sports betting tax, calling it "incredibly ill-conceived" and harmful to sportsbook operators and consumers.

In an interview with CNBC, Robins expressed frustration over the lack of notice given to companies before lawmakers adopted the measure. He emphasized that neither DraftKings nor other best sports betting sites had any prior indication that such a tax was under consideration.

According to Robins, the new legislation introduces per-bet fees that significantly impact profitability. Illinois will charge sportsbooks $0.25 per online bet for the first 20 million wagers annually, then increase the cost to $0.50 beyond that threshold. 

Robins argued that the structure forces operators to shift costs onto users to remain viable. As a result, both DraftKings and FanDuel plan to implement a $0.50 surcharge on all bets starting Sept. 1. Robins noted that operators could remove these surcharges if a legislative compromise is reached.

“All it’s going to do is drive people to the illegal market or drive people to bet more,” Robins commented.

Last-minute tax measure raises industry alarm

The tax was introduced and passed in the final moments before the midnight deadline on May 31 as part of a broader revenue package totaling $1 billion, intended to support public transit funding.

It follows a separate hike passed in 2024 that replaced the state's 15% flat sports betting tax with a graduated system that can reach up to 40% based on adjusted gross revenue.

Big operators expressed opposition before the vote. The Sports Betting Alliance - a coalition representing FanDuel, DraftKings, BetMGM, and Fanatics - notified that the updated taxation structure would be harmful and even illegal.

The group labeled the bill as "punitive" and "discriminatory" and promised to continue battling the law in the Illinois sports betting market and other states where similar bills might be proposed.

The operators warned that the tax would reduce promotion deals, increase customer costs, and make Illinois sports betting apps less competitive.

Operators respond

Sportsbooks were quick to make changes to their operations following the law’s passage. FanDuel has confirmed that, as of Sept. 1, it will charge a $0.50 transaction fee per bet Illinois customers place, win or lose. The operator explicitly blamed the tax rise for the cost of the new levy.

DraftKings soon followed with the same policy, saying it, too, would add a $0.50 fee on every online bet effective the same day. Both operators said the move to pass costs on to customers was a last resort compelled by a tax structure they maintain erodes margins and threatens the long-term sustainability of lawful gambling businesses in Illinois.