US sports betting operators are facing conflicting tax signals as Illinois moves to repeal its per-wager surcharge while Michigan advances a similar proposal.

The issue was analysed on the latest episode of iGaming Daily, where host Charlie Horner and SBC Americas Senior Reporter, Tom Nightingale, examined the impact of Illinois’ model and the risk of replication across other states.

Illinois introduced a per-bet tax of up to 50 cents on high-volume operators such as DraftKings and FanDuel. In its first six months, the measure generated more than $60m, exceeding the state’s original $36m annual estimate. However, when combined with the City of Chicago’s 10.25% local tax, some operators faced effective rates of 55% to 60%.

Despite the revenue gains, repeal efforts are now underway. The Chair of the Illinois House Gaming Committee is backing legislation to remove the surcharge, arguing that local authorities should not have the power to layer additional gaming taxes. Lawmakers are seeking clearer division between state and municipal control.

At the same time, Michigan Governor Gretchen Whitmer has proposed adopting a similar per-wager structure as part of a plan to raise an estimated $200m, alongside online casino tax increases. Nightingale described the trend as “copycat”, noting that Illinois’ stable handle figures make the model attractive to revenue-focused states.

The podcast also addressed Arizona’s proposed tiered system, which would tax top-performing operators at rates up to 45%. An initial error in the proposal confused revenue with handle, prompting clarification from the Arizona Department of Gaming that the threshold applies to operators handling more than $75m in wagers.

The episode concluded with comments from DraftKings CEO, Jason Robbins, who warned during a recent earnings call that further tax increases could weaken regulated operators as prediction markets and sweepstakes models expand outside traditional frameworks.