A proposed PA sports betting tax hike could have bettors footing the cost just like Illinois bettors are following its latest tax.
Sources tell Legal Sports Report that any increase to the 36% Pennsylvania sports betting tax rate, already second-highest rate among multi-operator states, would prompt sportsbooks to pass the fees down to customers or impose minimum bets.
Whether there will be a bill to raise the Pennsylvania sports betting tax rate in the 2026 session is still up for discussion with legislators, one source said.
Legislative leaders did not return requests for comment.
Source: operators will have ‘no choice’
One source from a Pennsylvania sportsbook explained the state’s operators would have to pass the tax on to their customers given the existing rate is already high.
“Sportsbooks will have no choice but to pass on a tax increase in Pennsylvania to customers. iGaming is already the highest in the nation, sports betting is the second highest for competitive markets – leaving regulated legal sports books with few options.
“Just like in Illinois, customers will be the ones who bear the brunt if a tax increase comes to pass. All sportsbooks in Illinois were forced to make their products more expensive for customers after the new Illinois tax went into effect. Unfortunately, you would absolutely see that same situation would play out again in Pennsylvania.”
No details on PA sports betting hike
So far, a firm number has not been decided for a potential Pennsylvania sports betting tax increase.
Whatever the number would be would put Pennsylvania even closer to New York, which taxes its sportsbooks the highest of any non-monopoly state at 51%. Pennsylvania operators already pay 34% of net revenue to the state and another 2% to local taxes, along with a 54% tax for online slots and 16% for online tables.
Raising sports betting tax rates has been a popular topic across multiple states over the last few legislative sessions. Several key states, including Louisiana, Maryland, New Jersey and Ohio, have raised tax rates with others considering the move to help fill budget holes.
Illinois has raised betting taxes twice
The state of Illinois is getting everything it can from its sports betting licensees – with another increase proposed in the fiscal 2026 budget.
The Illinois legislature first raised the tax rate from a flat 15% rate to a tiered system up to 40% in 2024. This year, the legislature passed a per-wager fee of up to 50 cents to be paid by the sportsbooks.
That led five sportsbooks to pass the fee directly to the customer while others raised their minimum wagers.
Now, Chicago Mayor Brandon Johnson wants to impose a 10.25% tax on all online sports bets placed within the city. A group of legislators introduced a bill that would block the tax proposal.
