Is There a Problem Gambling Crisis Brewing in Illinois

While Illinois lawmakers and sportsbooks battle over tax rates, a bigger problem could be looming behind the scenes.

The state has been clashing with online operators since it enacted a per-wager tax that requires sportsbooks to pay $0.25-$0.50 for each wager they accept. Sportsbooks reacted by adding fees and raising the minimum bet requirement. 

The result has been fewer bets placed, but the average wager stake is increasing. Illinois saw its highest handle of the year in October, the fourth month in which the new taxes and fees were in effect. 

While it seems the change isn’t enough for either to back down, we are left wondering who is ultimately paying for this fight.

Casual Bettors Are Leaving the Market

The increased cost to place wagers has led many casual bettors in the state to top betting. Many of them were placing low wagers on parlays and were unwilling to pay a fee or put more at stake.

While longshot parlays make up much of a sportsbook’s revenue, the industry has made it clear that they aren’t putting much value behind those casual bettors. During the legal fight, operators argued that the cost of processing low-value bets isn’t worth it. That led several to up their minimum bet requirements without hesitation.

Who is Staying?

With casual bettors leaving the Illinois market, questions swirl about the demographics that remain.

We know there are plenty of sharps or wealthy bettors who have larger budgets. On paper, relying on these customers is smart, ensuring that those betting can actually afford to do so. However, sportsbooks don’t like winners, and several have faced accusations that they are limiting hot bettors.

Sportsbooks have a campaign to incentivize losing bettors to keep wagering, which is feeding the growth of problem gambling in the US. While casual bettors can easily give up the habit, those struggling with addiction can’t, even as costs continue to rise.

The changes in the Illinois market are too recent to properly assess their impact on problem gambling. However, rising costs could soon change that. 

Chicago Adds Fuel to the Fire

As the relationship between Illinois and online sportsbooks remains at its breaking point, Chicago decided to take action of its own.

The city recently passed a new budget that allows it to license and tax operators. State leadership warned the city against implementing the changes, but they still took effect on June 1. 

That puts operators and the state on the same side, but doesn’t guarantee the fighting will stop.

Hometown BetRivers Sportsbook already took action, raising its minimum bet to $5. It is set at $0.10 in the rest of the sportsbook’s US markets. That is a bad sign for those suffering from problem gambling, as it appears they will see yet another price hike.