Flutter Entertainment’s FanDuel brand has announced plans to introduce a $0.50 transaction fee on each bet placed on its platform in Illinois.
The move comes in response to the Illinois State legislature introducing a new wagering tax on all licensed operators from July 1 under its State Budget.
From September 1, FanDuel will charge bettors $0.50 for every bet placed on its platform in the state.
The operator said that the decision reflects the significant increase in the cost of operating in Illinois as a result of the increased wagering tax, which is charged at $0.25 on each wager for the first 20 million annual combined Tier 1 and Tier 2 wagers. This comes on top of an increase in the state’s wagering tax rate that came into effect in July 2024.
Following the increase last year, FanDuel said that extensive efforts were made to try to absorb the cost without impacting players.
“It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth and maximize revenue for states over time,” said Flutter CEO Peter Jackson. “We are disappointed that the Illinois Transaction Fee will disproportionately impact lower wagering recreational customers while also punishing those operators who have invested the most to grow the online regulated market in the state.
“We also believe the introduction of the Illinois Transaction Fee will likely motivate some Illinois-based customers to bet with unregulated operators. These operators do not contribute tax revenue to the state, will not collect the newly announced transaction fee and do not offer the same levels of customer protection that regulated operators provide.”
FanDuel confirmed that if the state legislature reverses its decision at any point in the future then the $0.50 transaction fee will immediately be removed.
Shares in Flutter Entertainment plc (NYSE:FLUT) were trading 1.10 per cent lower at $260.86 per share in early trading in New York Tuesday following the announcement.