For the sixth consecutive month, Illinois sports betting apps and retail sportsbook operators received over $1 billion worth of bets in February. The state sports betting handle for February totalled $1.07 billion, with $83.5 million in gross gaming revenue off a win rate of nearly eight percent.
The February numbers, released by the Illinois Gaming Board (IGB), show a year-over-year increase of 22.3% compared to the same month in 2023, when the handle stood at $875.4 million. However, the handle dipped 16.7% month over month from $1.286 billion worth of wagers accepted in January.
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Illinois Sports Betting Activity Slumped in February
In February, the sports betting activity in Illinois experienced a significant slowdown compared to the previous month. However, the IGB report shows a remarkable increase in comparison to the overall handle observed in February 2023.
The results are a mixed bag for top Illinois sports betting operators. While the handle topped $1 billion for the sixth month in a row, the downside is that February’s total sports betting wagers were the lowest since August 2023.
Nevertheless, March holds great promise with the NCAA Men’s and Women’s Basketball tournament being included in the wagering options. The March Madness, in particular, is expected to generate significant viewership and sports betting activity across Illinois.
Despite the two-digit decline in sports betting activity, the state almost edged New Jersey as the country’s second biggest market behind New York. The Garden State reported a sports betting handle of $1.08 billion for the same month.
Gross Gaming Revenue from Sports Betting Reached Nearly $84 Million
The $1.07 billion in total wagers translated into a decent $83.5 million in adjusted gross sports betting revenue for Illinois operators. The revenue came off a 7.8% hold.
The gross revenue plummeted 38.2% from January’s record-breaking $134.9 million. However, it was up 22.1% year-over-year compared to February 2023’s $68.4 million.
The state’s coffers benefited as well, with Illinois collecting $12.5 million in tax receipts from sports betting activities in February. Cook County, which encompasses the city of Chicago and levies a 2% tax on revenue generated within its limits, received a substantial $921,855 in tax revenue for the month.
Looking at the bigger picture, the first two months of 2024 have been quite successful for both the state and sports betting providers. The combined taxable revenue for January and February reached $218.8 million, up 33% from the same period in 2023.
For comparison, Bally’s temporary casino in Medinah Temple (also known as Chicago’s casino) paid an average of $776,582 in local monthly taxes in 2023. Meanwhile, Illinois received around $1.5 billion in gaming tax revenue for 2023.
Operator Performance
The Illinois sports betting market is dominated by industry heavyweights DraftKings and FanDuel, who consistently lead the pack in terms of handle and revenue. In February, DraftKings reported a handle of $389.4 million, while FanDuel followed closely with $370.9 million.
However, FanDuel emerged as the overall revenue leader, generating $31.8 million, narrowly edging out DraftKings’ $31.4 million. BetRivers secured the third spot for both handle and revenue, with a $70.9 million handle and $5.2 million in revenue.
ESPN BET and Caesars rounded out the top five operators in terms of handle, contributing to the state’s impressive overall performance.
Betting Trends and Highlights
While the month of February is typically quieter for sports betting activity compared to the peak seasons, the Super Bowl LVIII provided a significant boost to the industry. However, the betting public had a good month in single-event football wagering, as operators reported a combined loss of nearly $2.4 million from $69.1 million in completed handle, resulting in a hold of -3.4%.
FanDuel, in particular, felt the impact of the Super Bowl, with bettors walking away with close to $3.8 million on top of the $18.8 million wagered through its sports betting app. In contrast, DraftKings won $1.2 million from $28.4 million in handle, notching a 4.3% win rate for the month.
While football may have been a boon for bettors, operators more than made up for it in other areas. Basketball proved to be the largest source of operator winnings, generating $13.7 million in revenue from a staggering $457 million handle. Tennis also contributed significantly, with operators crafting a 6.2% win rate from $92.3 million worth of bets, resulting in $5.6 million in revenue.
Parlay wagering, a staple for many sportsbooks, played a crucial role in February’s revenue figures. FanDuel, in particular, excelled in this area, winning nearly $27 million from multi-leg bets and crafting an impressive 20.8% hold against $129.6 million in parlay handle.
Proposed Tax Rate Increase
As the sports betting market continues to flourish, Illinois Governor J.B. Pritzker has proposed a significant tax rate increase for operators. In his $53 billion Fiscal Year 2025 budget proposal, the governor suggested raising the tax rate on sports betting revenue from the current 15% to a staggering 35%.
According to the Governor’s Office, this proposed tax hike could generate an additional $200 million in tax revenue for the state. However, such a substantial increase has raised concerns among industry stakeholders, who fear that it could hamper the competitiveness of Illinois sportsbooks and potentially drive bettors to seek alternative options in neighboring states with more favorable tax structures.
Wrapping Up
Illinois’ sports betting industry continues to gain steam, with the possibility of overtaking New Jersey in monthly sportsbook handle before the end of the year. The $1.07 billion handle in February, coupled with impressive revenue figures and substantial tax contributions, show that the industry is a catalyst for economic growth and a valuable source of revenue for the state.
However, the proposed tax rate increase by Governor Pritzker has sparked debates within the industry, as stakeholders weigh the potential implications on competitiveness and the long-term sustainability of the market. Regardless of the outcome, it is clear that Illinois is one of the fastest-growing sports betting markets.
