Sports bettors in Illinois on Saturday logged into their apps and were met with an uncommon warning: the state legislature was considering new taxes.

The tax, which passed minutes before midnight local time on Saturday, will be 25 cents for every bet for a licensee’s first 20 million bets, and 50 cents per bet thereafter. This arrangement came as part of $1 billion in new taxes to ostensibly fund public transit, after a new provision last year raised taxes on sportsbooks from a 15% flat fee to up to 40%. 

Before the new surcharge passed on Saturday, alarm signals were sent out by the sports betting industry. Proxies for FanDuel and DraftKings, the Capulets and Montagues of sportsbooks who have been in a blood feud with each other for years, both tried to warn against the new tax.

The Ringer, sponsored by FanDuel, posted a since-deleted tweet that said, “The Illinois legislature is considering an unprecedented tax on every bet placed on online apps like FanDuel. This would hurt sports fans in Illinois and potentially drive them to the illegal market.” The tweet led to a link at the Sports Betting Alliance to urge politicians to reject the tax. Dan Katz (“Big Cat”) of Barstool Sports, which is sponsored by DraftKings, said in a video that the new tax would be “very bad” and shared the same Sports Betting Alliance link. It has not been common for Katz or The Ringer to engage in political advocacy.  

The Sports Betting Alliance—which consists of FanDuel, DraftKings, BetMGM, and Fanatics—issued a statement calling the sports betting tax “discriminatory, punitive and constitutionally suspect.”

“With this change, lawmakers are essentially urging customers—and especially these small dollar bettors—to switch to unsafe and unregulated sportsbooks who defy state consumer protections and generate zero taxes for state priorities,” the Sports Betting Alliance said. “These illegal operators are the big winners from Saturday’s vote. 

It added that it will continue to fight this tax and potential other similar taxes that might be proposed in Illinois or any state moving forward.

This is the second straight year lawmakers in Illinois have approved a budget hiking taxes on regulated sportsbooks. In the budget passed last May, the Illinois Senate approved a progressive wagering tax increase that changed the sports betting tax from a flat 15% rate to a system based on adjusted gross revenue, meaning larger sportsbooks pay higher taxes.

Adam Hoffer, director of excise tax policy at the Tax Foundation, tells Front Office Sports this is the first fixed-rate per wager tax on sports betting he’s seen. Based on the language of the policy, he says it’ll be “practically impossible” for sportsbooks in Illinois to take $1 bets moving forward.

“It’s going to distort the market, which is not something you generally want tax policy to do,” he says.

Hoffer says perhaps the act of discouraging small-money wagers could reduce the rates of problem gambling. But on the other hand, there will be bettors who will increase the amount of money they place on individual bets because of the tax.

Meanwhile other states could look to replicate this policy in the future. “A lot of states’ tax policies are driven by what they see in other states,” he says. “There’s very much a copycat system.”

Analysts at Truist said in a Sunday research note that the change will most impact the two biggest players—FanDuel and DraftKings—while more moderately affecting those below them, like BetMGM, Fanatics, and Entain. The note also said the change could embolden illegal market operators, and said “we fear other states could look to copy [Illinois]…”

Robert Walker, director of operations at ARMS—which helps retail sportsbooks manage potential risks to their business—tells FOS he read about the new sports betting tax “with a sinking feeling,” and says “it confirms exactly what I’ve been worried about.”

The tax pushed through in Illinois “sets a dangerous precedent,” he says. Expect other states to impose similar taxes on licensed sportsbooks “whenever they need quick revenue.”

Walker, who for more than a decade was the sportsbook director for MGM Mirage’s Las Vegas casinos, says this comes at a particularly challenging time for the legalized sports betting industry, which is facing new competitors in the form of companies like Kalshi that offer sports “prediction” markets.

“This feels like short-sighted revenue grabbing that could drive casual bettors away from legal, regulated platforms,” he tells FOS. “Exactly the opposite of what good policy should accomplish.”

He expects sportsbooks to respond by raising their minimum bet requirements, meaning that sports bettors are the ones who will ultimately feel the tax.

“Make no mistake: this cost will ultimately land squarely on the customer,” Walker says. “The tax may be levied on the operator, but basic economics tells us who really pays. What’s particularly frustrating is how this undermines the competitive position of regulated operators just when they need every advantage they can get against emerging alternatives.”

The emerging alternatives include Kalshi, an exchange-based platform whose sports betting markets have expanded onto Robinhood, which are not subject to state gaming taxes.

Napoli Basketball in Italy has poached a former Pelicans and Warriors executive to serve as its general manager under the new ownership group led by U.S. investors Matt Rizzetta and Dan Doyle, Rizzetta confirmed to Front Office Sports.

It’s the latest move in a growing trend of U.S. money pouring into European basketball. 

James Laughlin, who most recently served as chief of staff for the New Orleans Pelicans, is Napoli’s new GM. He also previously worked for the Golden State Warriors as an assistant coach and video coordinator; he once received public praise from Draymond Green during a Warriors playoff run. The team will hold a press conference in Naples this summer to introduce Laughlin, Rizzetta says. 

Napoli is also bringing on John Staudt as head of scouting for North America, a New York native who has been a head coach for multiple teams in Europe, including the Aalborg Vikings of Denmark, who play in the Danish 1st Division.

BasketNews first reported the rumor Laughlin was leaving the Pelicans to join Napoli last week. 

FOS first reported in April that a group led by Rizzetta and Doyle was buying the team. Terms of the purchase were not disclosed, but a source familiar with the matter now tells FOS the sale’s total valuation—taking into account debt, working capital, and other considerations—was between 15 million and 20 million euros ($17 million and $23 million).

The deal closed after the conclusion of the most recent season, which saw Napoli finish 9–21. Its final record was good enough to stave off relegation, meaning Napoli will compete once again in Italy’s top league, Serie A1.

Rizzetta and Doyle, who both graduated from Iona University, bought a majority stake in the team alongside other prominent Iona graduates. Rizzetta hopes the Iona connection will give Napoli a recruiting edge by offering college players a clear path to a pro career in Europe through an alumni-owned team. In the NIL (name, image, and likeness) era, boosters can now offer recruits financial incentives and post-college opportunities without violating NCAA rules.

He also thinks his ownership of Napoli can boost his alma mater’s ability to recruit talented players, as European teams often begin recruiting the next generation of talent as young as 14 and 15 years old—before college.

“We can create a really interesting bridge between the U.S. and Europe by developing players in a major European city that is an appealing destination, with the Amalfi Coast,” he tells FOS. “That was a big impetus behind the decision to do this deal.”

Napoli has rostered former NBA players in the past, including Alex English, Larry O’Bannon, and most recently Kevin Pangos, a former Gonzaga point guard who played in 24 games for the Cleveland Cavaliers in the 2021–22 season. Pangos is currently playing for Napoli.

Rumor has it another former NBA player—Hall of Famer Shaquille O’Neal—may join the Napoli fold in some kind of sponsorship capacity. Rizzetta says his group did recently host O’Neal’s business manager and uncle in Italy and have had talks about a possible role, but he refuted the rumor that there is any agreement, which first sprouted in local Italian newspaper Il Mattino.

The Napoli transaction comes as the NBA eyes expansion into Europe. Commissioner Adam Silver recently said the league is exploring a potential league in Europe with the International Basketball Federation (FIBA) as partners.

Other teams in major European cities with foreign owners include Paris Basketball, co-owned by former Minnesota Timberwolves president of basketball operations David Kahn; AS Monaco Basket, which is owned by Russian businessman and commodity trader Alexey Fedorychev; and Pallacanestro Trieste, which includes former Philadelphia Eagles linebacker Connor Barwin among its ownership.

Rizzetta’s other sports team investments include London-based Dagenham & Redbridge Football Club, which plays in England’s National League; Brooklyn Football Club, which plays in the pro women’s USL Super League; and Campobasso Football Club, which plays in Italy’s third tier Serie C. Hollywood power couple Kelly Ripa and Mark Consuelos are minority investors in Campobasso. His ownership in those teams is through an entity called Club Underdog.

Laughlin could not immediately be reached for comment on his hire. He no longer appears on the Pelicans page listing front office employees. The Pelicans did not immediately respond to a request for comment.