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Top sportsbooks go to customers in fight against Illinois tax hike proposal

Sportsbooks fight against Gov. JB Pritzker's proposal for tax hike
Sportsbooks fight against Gov. JB Pritzker's proposal for tax hike 02:11

CHICAGO (CBS) -- A battle has been brewing over sports betting in Illinois.

On one side, Gov. JB Pritzker is trying to more than double taxes on the revenue from bets won by sports betting operators. On the other, the betting companies are now asking their customers to get involved to stop it.

Companies like DraftKings, FanDuel, and BetMGM have all come together to form the Sports Betting Alliance. The competitors are united against Pritzker's proposed tax hike – which he estimates would generate an additional $200 million for the state. They have sent emails to users urging them to write to their legislators and oppose the tax hike.   

Sports betting, of course, has been booming in popularity since it was legalized with the passage of the Illinois Sports Wagering Act in 2019 and the first legal wager was placed the following year. Abbey Sowacke and Charles Cook each consider themselves casual online s[sports betters.

"It makes games a little more exciting," Cook said.

CBS 2 met Sowacke and Cook outside the DraftKings sports book at Wrigley Field. They were likely among online bettors who have received messages like from sports betting companies, urging them to write Illinois lawmakers and oppose the governor's proposed tax increase.

Right now, Illinois sports books pay 15% tax on their revenue. But Pritzker's latest budget proposal would spike the tax to 35%.

"The truth lies somewhere in the middle," said sports betting regulatory reporter Robert Linnehan, of Sports Betting Dime. "The operators are obviously not happy with the proposal."

Sports betting companies said if approved, higher taxes would mean worse odds, and fewer promotions for users – which they warn could fuel the illegal market. The companies also warn the tax hike may drive all but the top three sportsbooks out of Illinois.

"This is going to affect the way that you bet," said Linnehan. "People want more, states want more, and I think Illinois sees they could be making a heck of a lot more - and they're going to take a really hard look at this."

Pritzker press secretary Alex Gough said in part in a statement: "From day one, Governor Pritzker has taken action to ensure corporations are paying their fair share and the gaming companies are not exempt from this.

"Since the legalization of sports betting in Illinois, gaming companies have enjoyed one of the lowest sports wagering taxes in the nation. In that time, the sports betting industry has exploded and companies like DraftKings and FanDuel have seen incredible profits. By raising the wagering tax to 35%, Illinois would still be a far cry from the highest rates in the country, with New York, for example hovering around 50%."

Sowacke did not like the idea of a tax hike.

"I just think that's insane," she said. "You're adding more tax to it? It's ridiculous."

The Sports Betting Alliance suggests Illinois should legalize online gaming, or iGaming, to generate more money. Right now, Illinois has a bill on the books, but has not gained much momentum.

iGaming is currently legal only in a handful of states.

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