Chicago Continues Pursuit Of City Sports Betting Levy

Ignoring protests from Illinois state lawmakers, Chicago City Council is continuing to move forward with a proposed 10.25% tax levy and all sports bets placed within city limits.

A slim majority of Chicago alderpersons – 27 out of 50 – signed off on a revised city budget last week that included the 10.25% tax levy on any sports wager that is made in the city. Chicago mayor Brandon Johnson included the sports betting tax as part of his original budget when it was introduced last fall. The city is facing a $1.2 billion budget deficit.

If the budget is passed by city council, the new tax rate on sports betting would go into effect on January 1, 2026. Johnson estimates that the new levy on sports bets could generate as much as $26 million in annual revenue for the Windy City.

State lawmakers offer opposition to Chicago sports betting tax

A group of 30 Illinois state representatives signed a letter of protest over the Chicago plan to add an additional tax to sports betting. Already, the state has twice increased the tax rate on sports betting in the state. A fluctuating rate now imposes a tax of between 20-40% on all sports wagers placed in Illinois. Originally, the state imposed a 15% flat tax on sports betting.

In addition, on July 1, 2025, the state implemented a per-bet tax on regulated sportsbooks operating in the state. The Illinois government charges sportsbooks 25 cents per wager for the first 20 million bets per operator. Beyond that threshold, the tax rate increases to 50 cents per wager.

“Illinois now has one of the highest sports-betting tax burdens in the nation,” State Representative Dan Didech said.

The Illinois Government is challenging the Chicago tax levy

Didech serves as chair of the Illinois House Gaming Committee. He pointed out that all regulatory duties when it comes to sports betting in the US market are carried out by state-run bodies. Didech believes that municipal governments don’t have the authority to impose taxes on sports bets.

Doubling down on that philosophy, Didech introduced House Bill HB 4171, dubbed the Sports Wagering – No Local Taxes Bill. Specifically, if passed into law, it would deny municipalities in the state the power to regulate, license, or tax sports wagering.

The bill passed first reading and is now being considered by the House Rules Committee.

Illinois Rep. Jehan Gordon-Booth discussed the dangers to the betting industry that continuing to add to the tax burden could bring when she spoke during a roundtable discussion at the recent National Council of Legislators from Gaming States winter conference in Puerto Rico.

“We need to understand, what you think you’re going to get from raising taxes, you’re not going to get,” Gordon-Booth said. “We want this industry to continue to strike the right balance.”

Didech also believes that adding more taxes to Illinois sports betting will drive players into the unregulated offshore market.

“Chicago’s proposal will hurt consumers, drive vulnerable people to predatory illegal markets, and reduce state tax revenue,” Didech said.

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