Summary
- BetMGM has recently devised a strategy to address a newly imposed betting surcharge, making it the latest licensed operator in Illinois to take action.
- Some, like DraftKings and FanDuel, have shifted the surcharge costs directly to their players.
- BetMGM is working to reduce costs without alienating its paying customers.
Starting today, Wednesday, July 16, BetMGM is introducing a new universal minimum bet of $2.50 for all types of wagering activities it offers in Illinois. This change is a direct response to the state's decision to impose an additional $0.50 tax on every wager made after the 20 millionth wager.
Surcharge is now the new reality in the Illinois sports betting reality - almost
Rather than absorbing the costs, most operators have chosen to pass them on to their customers. FanDuel and DraftKings have both announced a $0.50 surcharge, while Fanatics has opted for a lower fee of $0.25. However, BetMGM might have found a winning strategy. Instead of directly charging players, they have decided to raise the minimum wager amount. This approach might be more successful in the long run. Firstly, many players are already betting $2.50 or more. Secondly, even if there is some backlash, players might feel they receive a greater value—with the possibility of a larger payout—instead of facing a seemingly random surcharge. Ultimately, it's hard to predict which approach will be more sustainable, as time will tell. Illinois has been steadily increasing taxes in recent years to address its substantial state deficit. The current surcharge was a compromise by lawmakers who initially aimed to impose even higher taxes on gambling. Licensed operators have warned that significantly raising taxes on the regulated market could empower black-market operators, leaving the regulated market at a disadvantage. Currently, Illinois taxes companies like FanDuel and DraftKings at approximately 50%. As demonstrated by the operators, these costs are often passed on to consumers, ultimately to everyone's detriment.
