1. Benchmark Defined
Sports betting taxation is the rate and structure that a government applies to operators’ gross gaming revenue, or, in some cases, to individual wagers themselves, from sports betting. It functions as a direct lever over how much of the money staked funds public services versus how much stays with operators to fund pricing, promotions, and product investment. This benchmark applies to online and remote betting specifically, since almost every jurisdiction now taxes digital wagering at a different rate than retail or in-person betting, and that online versus land-based split is itself one of the clearest patterns in the data. Rates and structures have moved sharply over the last eighteen months across every market examined here, so a comparison accurate in 2024 is already out of date.
2. Global Comparison
New York taxes mobile sports betting operator revenue at 51%, a rate set when the state launched licensed online wagering in January 2022 and unchanged since. It remains among the highest sports betting tax rates in the country, tied with New Hampshire, Oregon and Rhode Island. Delaware moved to match it, introducing a 50% rate from 3 January 2024, and the District of Columbia raised its own rate from 10% to 30% from 1 August 2024. Both changes are signs that the New York rate has become a reference point other jurisdictions are converging toward rather than an outlier.
Illinois took a different route, moving from a flat 15% rate to a graduated structure ranging from 20% to 40% based on an operator’s Illinois revenue, effective 1 July 2024. That change made it the fifth highest sports betting tax rate nationally and the highest in the Midwest. Illinois then added a second, entirely separate mechanism, a per-wager excise tax that took effect 1 July 2025. It charges operators 0.25 US dollars per of the first 20 million bets they accept annually and 0.50 US dollars per bet beyond that threshold. The tax is projected to raise roughly 40 million US dollars a year on top of the graduated revenue tax. Illinois is, as tax commentators covering the change have noted, the only US state charging tax on the bet itself rather than solely on revenue, and most major operators have said publicly they will pass that per-bet charge on to customers.
Pennsylvania taxes sports betting revenue at 36%, split 34% to the state and 2% to local governments, a rate that has stood since the state’s 2018 sports betting law and remains the second-highest among states with genuinely competitive multi-operator markets. Legislators were reported in late 2025 to be weighing a further increase for the 2026 session, though no rate or bill had been settled at the time of that reporting. Industry sources expect any increase would be passed through to bettors in the same way Illinois operators have passed on their per-wager fee.
The UK does not use a single sports betting tax; general betting duty applies specifically to bookmaking. Until the Autumn Budget 2025, general betting duty on remote (online) betting stood at 15% of operator gross profits, the same headline rate as retail betting, with UK horse racing bets kept at 15% and excluded from the reform. The Chancellor announced in the Autumn Budget 2025 that remote general betting duty on other online sports and event betting will rise to 25% from 1 April 2027. Remote gaming duty, the separate levy covering online casino-style products such as slots, rises far more sharply, from 21% to 40%, effective 1 April 2026. Bingo duty is abolished entirely from the same date. The Office for Budget Responsibility expects the combined package to raise roughly 4 billion pounds in 2025-26 and 5 billion pounds in 2026-27. It also estimates that operators will pass up to 90% of the increase on to consumers through worse pricing, an assumption that is itself expected to reduce the net yield by around 500 million pounds by 2029-30.
3. Analysis
The most immediate contradiction across these four markets is that three of the four, New York, Illinois and Pennsylvania, tax sports betting revenue at rates between 36% and effectively 40% or higher once Illinois’s per-wager charge is included. The UK’s rate on the same product, online sports betting, sits at less than half that until 2027 and only reaches 25% then, well below its own online casino duty of 40%. That gap is not accidental. The UK has historically taxed betting more lightly than gaming on the view that betting carries lower addiction risk than continuous casino-style products. The 2025 reform widens rather than narrows that internal gap even as it closes some of the distance with the higher-taxed US states.
Illinois’s per-wager excise tax is the more structurally significant development here, because it breaks with the revenue-based model every other market in this comparison still uses. A revenue tax scales with operator profitability, so a bad month for the sportsbook is a bad month for the state too, whereas a per-bet tax is charged regardless of whether the operator wins or loses on that wager. That shifts risk decisively onto operators and, as most have said they intend, onto the price bettors pay in the form of worse odds or higher minimum stakes. Other states are watching this closely, and the Illinois bill introduced to repeal the per-wager charge, reported by the trade press within months of its taking effect, shows how contested the mechanism already is within the state itself.
The land-based versus online divergence in this benchmark varies by market. In the US states surveyed here, retail and mobile betting are usually taxed at similar or identical rates within a state, so the divergence that matters is between states rather than between channels. In the UK, the opposite is true. In-person betting through general betting duty stays at 15%, remote betting on non-racing sports rises to 25% from 2027, and remote gaming rises hardest of all to 40% from 2026. The UK reform explicitly taxes the online channel harder than the equivalent land-based product. That is a deliberate policy choice, justified by the government on the basis that continuous, frictionless digital products carry greater harm risk than a bet placed at a shop counter or a racecourse.
The pattern across all four markets, rising rates, new mechanisms layered on top of existing ones, and explicit government modelling of how much of the increase operators will pass to consumers, points to a settled political direction rather than a temporary revenue grab. Every rate discussed here has moved upward in the period examined, none downward, and Pennsylvania’s own legislature is reportedly following the same path other states have already taken. Boards should plan on the assumption that today’s rate is a floor rather than a ceiling in any market where betting tax has become an accepted and comparatively low-friction source of state revenue.
4. Governance Lessons
Tax rate volatility should now fall within the same forecasting discipline as regulatory licensing risk, since Illinois moved from 15% to a 40% top rate plus a new per-wager charge in about 12 months. The UK’s remote gaming duty nearly doubled in a single budget statement. Pricing and product teams need a defined process for passing tax increases through to consumer-facing odds and promotions transparently, because every market examined here has seen or is expecting exactly that pass-through. Doing it without clear communication risks scrutiny of separate conduct on top of the tax change itself. Businesses operating in the US should treat Illinois’s per-wager model as a live template that other states may copy, rather than a one-off, and build the operational capacity to track and report bet-level volume now, before a similar mechanism appears in another state’s budget. UK-facing boards should model the 2026 and 2027 UK duty changes separately, since remote gaming rises first and hardest, and treat the government’s own pass-through assumption, up to 90%, as the baseline scenario for margin planning rather than a worst-case. Finally, any market where a rate has just settled should still be watched; Pennsylvania’s own legislature is reported to be considering a further rise in 2026, a reminder that a recently stable rate is not the same as a permanently stable one.
5. Boardroom Questions
1. What is our modelled margin impact if the jurisdictions we operate in raise sports betting or remote gaming duty by the same magnitude as the UK and Illinois have applied in the last two years?
2. Do we have the systems in place to track and report at the individual wager level, not just aggregate revenue, in case a per-bet tax mechanism like Illinois’s spreads to other markets we operate in?
3. When we pass a tax increase through to customers via odds or promotions, what governance sits over that decision to ensure it is documented, proportionate and defensible to a regulator or the media rather than simply the path of least resistance?
Sources
1. Tax Foundation, ‘Online Sports Betting Taxes, 2025’, 2025, https://taxfoundation.org/data/all/state/online-sports-betting-taxes/
2. Nelson Mullins, ‘Tax Reports: Illinois First State in the Nation to Implement a Per-Bet Excise Tax on Sports Gambling’, 2025, https://www.nelsonmullins.com/insights/blogs/tax-reports/all/tax-reports-illinois-first-state-in-the-nation-to-implement-a-per-bet-excise-tax-on-sports-gambling
3. NEXT.io, ‘Illinois bill aims to put an end to per-wager betting tax’, 2025, https://next.io/news/regulation/illinois-bill-put-end-per-wager-betting-tax/
4. Legal Sports Report, ‘Sources: Proposed PA Sports Betting Tax Hike Could Fall On Bettors’, 31 October 2025, https://www.legalsportsreport.com/245552/sources-proposed-pa-sports-betting-tax-hike-could-fall-on-bettors/
5. iGamingBusiness, ‘UK sector hit with 40% remote gaming duty, new remote betting tax from 2027’, 2025, https://igamingbusiness.com/finance/uk-sector-hit-with-remote-gaming-duty-increase/
6. Deloitte Taxscape, ‘Gambling duties’, Autumn Budget 2025, https://taxscape.deloitte.com/measures-autumn-budget-2025/gambling-duties.aspx
7. Office for Budget Responsibility, ‘Betting and gaming duties’, https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/betting-gaming-duties/
8. House of Commons Library, ‘Budget 2025: Gambling taxation’, https://commonslibrary.parliament.uk/research-briefings/cbp-10440/