BetMGM, Hard Rock Impose Illinois Sports Betting Minimums

Moves are responses to state’s latest sports betting tax hike

1. The new mandatory minimums are small
2. BetMGM and Hard Rock Bet are dealing with the recently implemented Illinois sports wagering tax increase in their own way, establishing minimum wager sizes in the state.

For sports wagers of all stripes, Hard Rock Bet is now requiring a rock-bottom bet of $2 in Illinois while rival BetMGM is slightly higher at $2.50. Of the two gaming companies, Hard Rock was the first to unveil a bet size mandate while BetMGM, which is jointly controlled by Entain and MGM Resorts International, told customers of the requirement earlier this week.

1. Those moves are in response to Illinois implementing a second online sports betting tax in a year with the new levy being 25 cents per wager on an operator’s first 20 million booked bets with that rate doubling to 50 cents per bet for each wager placed after that initial 20 million.

Operators May Have Dwindling Incentive to Take Small Bets

The Illinois minimums imposed by BetMGM and Hard Rock are tolerable and likely won’t affect many bettors there. By some estimates, more than half of the sports wagers placed in the US are for less than $10 or $10 to $25.

However, some gaming executives, including Circa CEO Derek Stevens, believe the latest Illinois tax gambit could dissuade operators from booking small bets in the state.

You can kiss those $1, $2, $5, $10 bets goodbye. That’s going to be the good old days,” Stevens said on Vegas Stats & Information Network’s (VSiN) “Follow the Money” show last month.

1. Stevens was restrained in his criticism of Illinois policymakers, but his comments are noteworthy because Circa is the smallest sportsbook operator in the state and the new tax scheme, as was the case with last year’s increase, shifts burden onto the biggest books by market share.
2. Better Than Transaction Fees?

BetMGM and Hard Rock requiring minimum bet sizes in Illinois is a departure from the strategy deployed by some rivals in the state. DraftKings, Fanatics, and FanDuel are each imposing per bet fees – moves that have drawn rebuke from bettors and industry observers.

FanDuel, a unit of Flutter Entertainment, was the first to announce a per bet fee in Illinois and DraftKings followed soon thereafter. Both operators are charging 50 cents per bet while the Fanatics transaction fee is half that. All three have said they’d be willing to do away with per bet levies if terms can be reached with Illinois lawmakers.

Conclusion

The introduction of minimum wager sizes by BetMGM and Hard Rock in Illinois has been a response to the state’s latest sports betting tax hike. While these measures are seen as a departure from other operators’ strategies, they may not have a significant impact on bettors who typically place bets under $10 or $10-$25. However, it is worth noting that some gaming executives believe this move could lead to a decrease in the number of small bets placed in the state due to the increased tax burden.