UMVA has learned that Illinois lawmakers have quietly approved a groundbreaking budget measure that would introduce the first-ever state tax specifically targeting sports event contracts traded through prediction markets.
The provision, tucked away in Senate Bill 3019, would impose a transaction tax of 1.75% on each exchange wager, with a higher rate of 3.5% for operators with significant activity exceeding five million exchange wagers in a fiscal year.
Unlike traditional tax structures, this proposal focuses on transaction volume rather than operator revenue, with generated revenue flowing into the Sports Wagering Fund before being transferred to the state’s General Revenue Fund.
According to information obtained by UMVA, the tax would specifically apply to sports-based event contracts, while non-sports prediction markets would be exempt from the same tax structure.
This development comes amid an ongoing battle over regulatory oversight of prediction market products tied to sporting events, with companies arguing that their offerings fall under federal jurisdiction rather than state gaming authorities.
UMVA can exclusively reveal that the Illinois measure could spark another wave of legal challenges from the industry, which has already taken action against state officials, including the Governor and Attorney General.
The prediction market provision is just one section of a sweeping bill that amends the Illinois Gambling Act and Sports Wagering Act, and also includes a 10% tax on targeted advertising services and a Digital Asset Tax Act.
Illinois continues to explore new revenue streams related to gambling, with this move marking a significant shift in the state’s approach to regulating prediction markets and generating revenue from the industry.
