Illinois tax rise could force gamblers into betting with black-market operators, says Flutter boss

Gambling industry giant Flutter Entertainment is to introduce a new transaction fee for its customers in Illinois in response to a tax increase to be imposed by the state legislature.

Chief executive Peter Jackson warned the decision by state officials could push Illinois customers into the arms of unregulated operators.

Under the new tax, operators will pay 25 cents on each bet up to 20 million bets a year, and 50 cents on each bet over that.

Flutter's US arm FanDuel is one of only two operators in Illinois which would have to pay the higher rate, and analysts at stockbrokers Goodbody have estimated it would cost the company about $87m before mitigation.

The tax, which comes into force on July 1, follows on from the introduction of a graduated tax system in the state last year under which operators pay a top rate of 40 per cent on revenue exceeding $200m.

Peter Jackson: "The Illinois transaction fee will disproportionately impact lower-wagering customers"

Jackson said: "It is important to recognise that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximise market growth and maximise revenue for states over time. 

"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."

Flutter said that should the state reverse its decision, then it would immediately remove the transaction fee.

Operators in the UK are also facing the prospect of tax rises as the government consults on plans to harmonise online gambling duties, which many expect to result in increases on the rate for betting on sports such as horseracing.

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