00:00Let's get to Illinois, where the battle rages on. The state wants more money from sports betting. The operators say, if you take more money, we're going to take more money back. Boy, it seems like this is a battle that's, Sam, not going to end well. And I got to say, other states have to be watching how it does.
00:17Yeah, whenever there's battles, you know, there's debris and other people get affected, you know, whether it's other states saying, hey, we really like what Illinois is doing, cracking down on these companies and raising the taxes, or whether it's the bettors in the states getting those fees passed down to them.
00:32My colleague at Legal Sports Support, Eric Ramsey, did a really good deep dive this week about where exactly this new tax hike in Illinois comes from. It's targeted really only against FanDuel and DraftKings, because it's this 20 cents per bet tax, or 50 cents per bet tax that only starts after you take 20 million bets.
00:54So the only operators who have taken over 20 million bets a year are both FanDuel and DraftKings. There's certainly a number of other sports books in Illinois, but they don't come close to that number. You know, last year, both those companies paid $286 million in taxes. Under this new change, they would pay about $424 million, which is almost half of the taxes that Illinois gets from sports betting.
01:16So this, of course, came after they'd already raised the rate last year from the flat 15% tax to this tiered rate where the maximum is 40%, which again, only FanDuel and DraftKings get hit with. So there seems to be a lot of targeting in this new tax law. You know, we've seen states like Ohio talk about just raising the tax overall, but really only FanDuel and DraftKings are getting hit here, which is why it's no surprise to see them being the only companies that announced that they're going to pass this fee down.
01:46You know, it really all comes back to 2015 when both these companies were getting started as daily fantasy sports companies. There was a big push from the casinos in the state to not let that happen, to classify that as illegal betting, mainly from Rush Street, which owns Bet Rivers and is a very, their owner is a very influential person in Illinois, gives a lot of money to the governor, a lot of money to different lobbying groups in the state.
02:10So it's no coincidence that we're seeing these kind of targeted tax rates against the companies that the casinos fought against, against the companies that they said were infringing on their rights and are now are on their access and are now really not competing in this space.
02:26So FanDuel and DraftKings obviously responded with that, that surcharge being passed down, but you know, how does that change their business in Illinois over the next year, especially in the football season? Are we going to see that even matter for people? Are they going to care about this, you know, paying an extra 20 cents on a $10 bet?
02:44Is this going to accomplish what the legislature wants, whether that's, you know, raising new taxes, but also kind of making the market more of an even playing field for everyone else?
02:54And then, of course, there's legal questions there, whether they can even do this. So it's, it's, it's beyond just kind of raising revenue, it seems to really just be targeted at these main companies, given the fact that they have all the power in most of the country, it'll be really interesting to see, you know, how they react, how they change things across the country.
