These small mandates come in response to a recent state tax increase on sports bets. The new levy charges operators $0.25 per wager on the first 20 million bets and $0.50 on each additional bet.
Both companies say the rules ensure they can continue offering a wide range of betting options without scaling back services.
Why They Launched Minimums
Illinois lawmakers approved a second IL sports betting tax hike earlier this year to boost revenue. Under the new law, gaming firms pay 25 cents on every bet until they reach 20 million, and 50 cents on each bet thereafter. These extra costs cut into profit margins, especially on very small wagers.
By imposing a minimum wager, BetMGM and Hard Rock Bet aim to cover the tax without passing the full cost to customers. A tiny $1 bet would generate a tax equal to or higher than the operator’s expected hold on that bet.
Raising the floor to $2 and $2.50 helps ensure the company earns enough to support its betting products and manage operating expenses.
Both operators emphasize that most bettors place larger bets. Industry data suggest over half of all sports wagers fall between $10 and $25. The new minimums are unlikely to affect casual or high-volume bettors, who typically stake more than the threshold.
Instead, these rules target the smallest bets that were most at risk of becoming unprofitable under the tax regime.
Other Operators’ Approaches
BetMGM IL and Hard Rock Bet IL chose minimum bets, but some rivals opted for per‑bet fees. DraftKings, FanDuel, and Fanatics each added a surcharge—ranging from $0.25 to $0.50 per wager—to help cover the tax hike. Those transaction fees drew criticism from bettors, who felt operators were shifting their tax burden directly onto customers.
Industry observers note that minimum wagers may be more transparent than hidden fees. With a clear floor, bettors know exactly what they must stake before placing a bet.
In contrast, transaction fees can add up unpredictably, especially for high-volume or small-stake players. Some experts argue that minimums avoid the perception of nickel‑and‑diming customers.
Still, not everyone agrees. Circa Sports CEO Derek Stevens warned that high taxes could drive major operators to avoid small bets entirely. He predicted that wagers under $5 might disappear from larger sportsbooks, leaving smaller operators to serve that market segment.
As the next legislative session approaches, Illinois regulators and industry leaders will likely debate whether to adjust tax rates or offer relief for low‑stake wagering.
