Fanatics Adds $0.25 Fee on Bets in Response to New Illinois Tax

Fanatics Sportsbook has begun charging Illinois customers an extra $0.25 per wager, a direct response to the state's new tax on mobile sports betting. This move aligns Fanatics with major operators like FanDuel and DraftKings, as well as some of the top US online casinos and sportsbooks, which have announced similar fee plans in response to Illinois' latest budget measures.

Effective from July 1, 2025, Illinois’ new per-bet tax law requires sportsbooks to pay $0.25 on each of the first 20 million online bets placed annually. Once that threshold is crossed, the fee doubles to $0.50 per bet. Rather than absorb the cost, Fanatics is passing it along to customers. For now, the operator is expected to stay under the 20 million bet mark, meaning the lower charge applies; however, this could change as its user base grows.

Illinois Betting Costs Climb as Operators React

Illinois was already known for imposing a tiered tax rate on sportsbook revenue, which ranges from 20% to 40% depending on how much a company earns. Now, with the additional per-bet charge, the state has become one of the most expensive places for sportsbooks to operate in the U.S.

FanDuel and DraftKings, two of the largest sportsbooks in Illinois, plan to introduce their own $0.50 per-bet fees starting September 1. These companies are expected to exceed the 20 million bet threshold, meaning their costs (and those of their users) will be higher. Fanatics, with a smaller market share, is currently subject to the lower rate; however, analysts believe this could change in the coming years.

The introduction of this fee marks a shift in how operators handle rising taxes. Previously, companies tended to absorb these costs, cut promotional offers, or scale back their marketing efforts. Now, direct fees are becoming a more common solution, even if they risk frustrating casual bettors.

Impact on Bettors and Market Dynamics

For everyday bettors, especially those placing small or frequent wagers, these fees could quickly become noticeable. A $0.25 or $0.50 charge per bet means even a $1 wager comes with a 25–50% overhead. This could discourage low-stakes gamblers or lead them to reduce their activity.

Industry observers are warning that this new fee model may unintentionally push some players toward offshore sportsbooks, which don’t charge such fees and operate outside of state regulations. These platforms are unlicensed, lack consumer protections, and contribute no tax revenue to Illinois. Yet for cost-conscious users, they may start to look appealing.

The Sports Betting Alliance, which represents several major operators including Fanatics and DraftKings, has criticized the tax for disproportionately affecting smaller, recreational users—those least able to absorb the cost increase. The group argues that the tax structure could hurt market growth and compromise efforts to keep gambling safe and legal.

Will Other Sportsbooks Follow?

Fanatics is not alone in its decision. FanDuel and DraftKings have already announced their plans to pass on the costs, and more operators could join them soon. Illinois currently licenses nine online sportsbooks, including BetMGM, Caesars, bet365, ESPN Bet, Hard Rock Bet, and Circa. So far, these platforms have not implemented surcharges, but pressure is mounting.

For now, Fanatics' $0.25 fee is lower than its competitors’ planned charges, giving it a slight edge, though that advantage may be short-lived. If the company gains a larger market share and crosses the $ 20 million threshold, it too will face the higher $0.50 rate.

What Happens Next?

Illinois remains the only U.S. state to implement a per-bet tax in addition to a revenue-based tax structure. That combination has raised eyebrows across the industry and could become a test case for other states exploring ways to increase gambling tax revenue.

Fanatics has indicated that it may remove the surcharge if the tax is repealed or adjusted. Whether that happens depends on how this policy plays out for bettors, operators, and the state’s budget. Last year, Illinois generated over $268 million in sports betting taxes, and state lawmakers hope this new system will add another $36 million annually.

In the meantime, Illinois bettors should be prepared to see fees added to their bet slips and to weigh carefully where and how often they wager.