In-person sports betting is dissappearing

DraftKings caught much of the sports world by surprise when it announced it was shutting down the sportsbook at Wrigley Field that it opened in March 2024 and instead will just be operating the 2000 square foot venue as a sports bar. Most would logically conclude that the sportsbook was unfeasible since it’s easier for Chicago residents to just bet on their smartphone from the seat in the stadium or from the comfort of their own home, but DraftKings pointed to the high taxes in Illinois as the main reason it is no longer operating the venue as a sportsbook.

Sports betting taxes in Illinois

When Illinois regulated sports betting in 2019 the tax was a flat 15% of gross gambling revenue which was deemed a fair rate by sportsbooks and customers. But in 2025 the state completely revamped the sports betting tax scheme charging a 20% on the first $30 million in gross gaming revenue (GGR), 25% for GGR between $30 million and $50 million, 30% on GGR between $50 million and $100 million, 35% for GGR between $100 million and $200 million and then 40% for any GGR exceeding $200 million. Moreover the state charges a betting fee to sportsbooks of 25 cents for the first 20 million bets and 50 cents for all bets exceeding 20 million. So, if a sportsbook takes in 100 million bets for the year, they have to pay the state an additional $45 million.  And to add to the frustration of sportsbooks, the city of Chicago charges an additional 10.25% tax for all sports betting revenue earned in Chicago whether at a retail sportsbook or an online bet placed with an IP inside the city of Chicago limits.

Consequently, when everything is added together, DraftKings and FanDuel, who have well over $200 million in gross gambling revenue, are now paying more in tax for operating in Chicago than they do with the 51% tax in New York State! Moreover, some sportsbooks started charging bettors a fee on their bets to offset the state’s actions, something which hasn’t been seen since European sportsbooks charged bettors a tax on each bet. That led most of the operators in England and Austria to move to tax free zones in places like Antigua, Malta, Gibraltar and the Isle of Man.

When announcing the changes to their budget a spokesperson for Governor J.B. Pritzker said that sportsbooks got a break in the early years with the 15% tax and  the new tax would “ensure corporations are paying their fair share.” For that reason along with the shift of most bettors to betting online via computers or smartphones, and the high cost of running the 17,000 square foot facility, which includes employing two dozen employees, rent, and overhead, DraftKings decided it simply did not make sense to continue with the sportsbook at Wrigley. Some analysts speculate that this could be a message to other states with successful stadium sportsbooks to not rock the boat if they want those to continue. It is notable that FanDuel operates a lounge at United Center in Chicago, but patrons can only watch games and order food there. There has been speculation that FanDuel was preparing to open a sportsbook as well, but with the move by DraftKings those plans are almost certainly on hold for the foreseeable future.

Other cities, other stadiums

As for the rest of the United States, only Arizona and Washington, D.C. have in-stadium sportsbooks. In Washington, D.C., BetMGM has a sportsbook at Capital One Arena with 20 betting terminals, as well as a sportsbook at Nationals Park with 17 terminals, while FanDuel runs a sportsbook with 18 terminals at Audi Field. There is currently no sportsbook at Northwest Stadium in Landover, MD where the Commanders play, even though sports betting is legal in Maryland. But there will no doubt be a bidding war for the right to offer sports betting at the new stadium when the Commanders move back to D.C. in 2030 at the old RFK Stadium site, provided the tax system in DC stays competitive.

Arizona has a sportsbook run by BetMGM at State Farm Stadium with 25 betting terminals and a sportsbook run by Caesars with 13 betting terminals at Chase Field.

The only other stadium that had a sportsbook was the Rocket Mortgage Fieldhouse run by Caesars in Cleveland, but all betting terminals were closed in 2024. While Caesars never gave a concrete reason for the closure, almost all analysts agree that it was for the same reason that DraftKings closed its sportsbook at Wrigley Field, namely an increase in the tax rate on GGR in Ohio from 10% to 20% in 2023 and a threatened further increase to 40% by Governor Mike DeWine. More importantly, most people in Ohio bet on the app and betting at the terminals was very slow, so maintaining an expensive retail sports betting operation for so few bettors made little economic sense.

It is notable that Washington, D.C. has a very low tax rate on sports betting at 10% for bets placed in the three venues. This gives a huge incentive for the sportsbooks to offer the product there. Similarly in Arizona, bets placed at retail locations such as State Farm Stadium or Chase Field have a lower tax rate of 8% of GGR compared to 10% of GGR for those that bet online. So, while Washington, D.C. and Arizona are trying to entice sports betting in arenas with incentives, Illinois is basically scaring them off.

Confirmation from industry insiders

I spoke with a manager from one of the major sportsbooks I met at a conference and he agreed to provide his comments off the record. He told me that the biggest problem with the United States is that most states are very short sighted. He claims that revenue from sports betting benefits everyone involved and lower tax rates increase revenue to the states in the long run. But states like New York, Pennsylvania and Illinois view sports betting as a quick “sin tax” money maker and could care less if it will hurt them in 10 years from now. He also said that JB Pritzker and Andrew Cuomo not only saw dollar signs when they signed the tax bills, but they also truly believed that they were doing the citizens of their states a favor by “allowing” them to bet on sports and that makes him sick since he thinks most Americans are Libertarian at heart when it comes to things like betting. Asked if he thinks his company would ever be interested in opening an in-stadium sportsbook, he said not unless things change dramatically in the country.

I spoke with colleagues in England and Australia where there are also retail sportsbooks in stadiums and each said that they were never very popular or profitable. Simon, who lives in Liverpool, England, noted that traditional on-track bookmakers are a thing of the past and retail shops on High Street are closing at an alarming rate, mostly due to the preference of those in England to bet online. In stadium betting was popular until around Covid, but of course, things changed then. In fact, BD Stadia, which set up in stadium betting terminals (most partnered with William Hill), and was featured at many conferences, went into receivership in October 2024 due to lack of interest from bettors in Europe. Currently the only real in stadium betting in England is at Bet365 Stadium located in Trent when there is a game taking place. Like in the United States, everyone in England has a smartphone and it’s just easier to place a bet at the arena from your seat or from the comfort of your home using a laptop or mobile device. In Australia, there are betting terminals at most stadiums but they are all run by Tabcorp, which is a government agency, so anyone wanting to bet with Bet365 or other private bookmakers, has to do so online.

Limited Future

So, is there a future for in-stadium sportsbooks? The answer is yes, but in a very limited way. If states or cities offer incentives like Arizona does with a lower retail tax or something similar, then it will attract commercial sportsbooks. But if a state is going to charge an exorbitant tax like Illinois, there is no incentive for places like Caesars or BetMGM to invest in running these types of operations.  Also, in states where mobile sports betting isn’t legal such as Mississippi there is an opportunity for in stadium sportsbooks, although most states that offer commercial land-based betting also allow betting online. In most instances where sports betting is not regulated online it is the result of compacts with the Tribes who have exclusivity to all sports betting, which the IGRA requires be conducted on Tribal lands, the Florida issue aside.

Sports lounges

What is far more realistic and undoubtedly will be the decision for most of these books moving forward is that the sportsbooks will partner with venues to set up sports lounges . . . with no betting terminals. Caesars has a 13,000 square foot sports lounge at Citi Field and I’ve been told it’s always packed with Mets fans who are placing bets and ordering food, and during the recent Knicks NBA playoffs run, it has been overrun with fans trying to catch the Knicks on the large screen TV. There’s no reason a venue like this couldn’t be opened for major events like the Super Bowl, March Madness or The FIFA World Cup, which will not only allow a great social opportunity for New York sports fans but also provide Caesars with some additional exposure with name recognition. Caesars can also take the opportunity to offer incentives for Caesars rewards holders with things like free food and have workers around to help anyone who wants to sign up or place a bet using the Caesars app. That is precisely what DraftKings is doing with the closed sportsbook at Wrigley Field, and what FanDuel is doing at United Center.

I asked a colleague what he envisioned will be the most likely thing going forward for these sports lounges and he said "think of the sportsbooks in Las Vegas such as The Westgate or Circa without the betting. It will be a huge social opportunity for bettors to come together, cheer on their teams and share their bets with others, even though the bets are going to be made with mobile phones. These venues are massive and many are already built inside arenas and stadiums. So the future in my opinion, will be all in the naming rights such as DraftKings sports lounge at Dodgers Stadium or BetMGM sports lounge at Minute Maid Park. Sure sports betting isn’t legal in California or Texas but this not only sets them up to get immediate recognition should those states change, but it also gives them ancillary revenue from drinks and food and more importantly it entices them to set up accounts and place mobile bets in neighboring states where it is legal."

No doubt my colleague is correct and even if in stadium sports betting isn’t viable going forward, save for a couple of locations like D.C. or Arizona, the betting companies still have a big opportunity to capitalize on name recognition without taking bets at a stadium venue. But as for betting in stadiums at terminals and the old betting window, that is likely never going to work.

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