Top Sports Betting & iGaming Legislative Changes in 2025

Top Sports Betting and iGaming Legislative Stories of 2025

The year 2025 brought major legislative changes for sports betting and iGaming across the United States, reshaping markets, tax structures, and game availability.

From Missouri’s long-awaited sports betting launch to aggressive tax hikes in Illinois and sweeping bans on dual-currency sweepstakes casinos, regulators were highly active throughout the year.

Missouri Opens Its Sports Betting Market

In November 2024, Missouri citizens voted to legalize sports betting, approving a constitutional amendment by the narrowest of margins at 50.5%. The amendment called for sports betting to open within just over a year on December 1, 2025. With the amendments' success, Missouri became the 39th state to legalize sports betting in the US.

While the buildup to the December 1st launch date was controversy-free, it wasn't without its surprises. As part of the rules set out by the Missouri Gaming Commission, 14 licenses would be given. Twelve tethered licenses require a sportsbook to partner and share revenue with a Missouri-based brick-and-mortar casino or professional sports team. Two untethered licenses with no required partnership or revenue sharing.

Three sportsbooks were competing for two untethered licenses: DraftKings, FanDuel, and Circa Sports. DraftKings and FanDuel contributed more than $43 million to the "Winning for Missouri Education" group, which advocated for the legalization of sports betting. It seemed obvious that the Commission would grant DraftKings and FanDuel untethered licenses. However, the Commission granted the licenses to DraftKings and Circa.

The December 1st go-live went off without a hitch.

Illinois Taxation Increases

Several states pushed to increase the tax rate on sportsbooks' gross gaming revenues in 2025, but none were as drastic as in Illinois. In the Land of Lincoln, state representatives doubled the tax rate from 15% to a floating rate that tops out at 40%.

The new floating rate increases based on a book's adjusted gaming revenues (AGR).

But the taxation didn't stop there. A few months later, Illinois lawmakers introduced a wager tax that charged books $0.25 or $0.50 per bet placed on their platforms. Sportsbooks either passed this fee on directly to their customers or amended their odds to compensate.

Prior to the closing of the 2025 calendar year, the Mayor of Chicago, Brandon Johnson, announced he wanted to add a municipal tax on sportsbooks. The response from the Sport Betting Alliance was to file a lawsuit in state court challenging the municipality's jurisdiction to tax sportsbooks. This story is still developing.

Other States That Voted To Increase Tax Rates

Again, Illinois was not the only state to increase the tax rates on sports gambling in 2025. The following states also increased their rates:

Sweepstakes Games Face Growing Bans

Near the end of 2025, New York Governor Kathy Hochul signed Bill 5935, which banned dual-currency casino games, otherwise known as sweepstakes games, in the Empire State. The bill, introduced by Joseph Abbaddo Jr., made the operation of a sweepstakes casino illegal with a penalty of up to $100,000 in fines.

Abbaddo had argued that these sweepstakes games, or social games, were online casinos in everything but name. While customers did not require money to play, they could purchase digital currencies that could be redeemed for real-world money.

The New York Senate and House both agree, agreeing on the bill in short order.