Illinois Moving Ahead With Bill To Ban Chicago Sports Betting Tax

If Illinois state lawmakers have their way, Chicago’s municipal sports betting tax will be a short-lived experiment.

The state House Gaming Committee voted unanimously to support House Bill 4171 (HB4171). The final tally of the vote was 15-0 in favor. The bill now heads to the full House for discussion that could ultimately lead to a vote.

Sponsored by Rep. Daniel Didech, HB4171 is supported by 37 co-sponsors. Didech is chair of the House Gaming Committee. Several other members of the committee are also sponsoring the bill. Of the 38 sponsors of the bill, 35 are Democrats. Didech’s bill was originally filed in October 2025.

If passed into law, the bill would provide an amendment to the Illinois Sports Wagering Act. It would deny home rule units the power to regulate, license, or tax sports wagering. The bill would take effect immediately upon passage. Home rule units are defined as municipalities with over 25,000 residents or counties with an elected chief executive officer.

Bill HB4171 states that the regulation and licensing of sports wagering, including, but not limited to, the imposition of fees, surcharges, or other costs for the privilege of conducting or participating in sports wagering, are exclusive powers and functions of the state government.

Cook County in Illinois taxes all sports bets placed within its jurisdiction at a 2% rate. If HB4171 is passed into law, this tax levy will also be considered unlawful.

A second bill, Senate Bill 2800, targets the same issues as Didech’s bill. Senator Patrick Joyce, a Democrat, is the sponsor of this bill. It has drawn support from 12 co-sponsors. Bill SB2800 is waiting for consideration by the state Gaming, Racing, and Wagering Committee.

Chicago implemented a per-bet tax with the city’s 2026 budget

At issue is a 10.25% per-bet tax on sports betting, covering all bets placed within city limits. It was implemented by Chicago Mayor Brandon Johnson as part of the city’s 2026 budget. This tax went into effect on January 1, 2026.

The Illinois state government isn’t the only opponent of Johnson’s tax plan. The Sports Betting Alliance, a lobby group consisting of five of the leading online sports betting sites operating in the state – DraftKings, FanDuel, Fanatics, BetMGM, and Bet365 – has filed suit, claiming that the Chicago tax is illegal under Illinois sports betting law.

Didech has filed a second bill along similar lines to HB4171. Bill HB5143 seeks to put an end to the per-bet tax levies introduced last year by the Illinois state government.

In 2025, Illinois implemented a 25-cent tax added on every sportsbook bet placed in the state, up to the first 20 million bets. Beyond that threshold, every wager is taxed at 50 cents per bet.

However, the tax increase has negatively impacted Illinois sports betting significantly. Illinois is showing a 25% year over year decrease in sports betting revenue since the new tax rate was instituted. Sports betting sites have passed the tax costs on to players by increasing minimum bet rates.

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