Chicago’s new sports betting tax has been on hold, at least temporarily, by a lawsuit filed on behalf of some of the biggest online sports betting sites in the US market. The Sports Betting Alliance has filed a lawsuit in Cook County Court. The suit is designed to bring a halt to the next 10.25% tax on revenue earned from online sports bets placed within Chicago city limits.
The new tax is part of Chicago’s 2026 budget. It was to take effect on January 1, but for the time being, the new levy is being put on hold.
The Sports Betting Alliance represents some of the major players in the US online sports betting industry. They include FanDuel, DraftKings, BetMGM, Bet365, and Fanatics Sportsbook.
Lawyers representing the SBA originally sought a temporary restraining order against the new tax. That motion was withdrawn, but the lawsuit continues to go forward.
In the suit, lawyers representing the SBA claim that the new tax “represents an unconstitutional assertion of authority that rests exclusively with the State.”
It’s also argued that there are no parameters in place to oversee this new tax levy. The suit claims that city plans “do not establish a review framework, specify application criteria, set processing timelines, or identify enforcement mechanisms associated with the licensing process.”
None of the claims has been proven in court.
SBA suit claims Chicago tax will drive bettors offshore
Facing the burden of an additional tax, the suit argues that bettors will be left with no alternative but to turn to illegal offshore sports betting sites to get action.
“Chicago bettors who lack legal means to place online sports wagers will be driven to illegal sports wagering alternatives readily available on the internet and through local bookies, which lack State oversight and consumer protections,” the suit alleges. “Those alternatives are untaxed, therefore depriving Illinois and, derivatively, Chicago of significant revenues under existing State tax laws.”
The SBA fears that this tax plan is short-sighted and could lead to the derailment of what has proven to be quite the cash cow for the Windy City.Last year, the 15 online sports betting sites in Illinois earned in excess of $1.1 billion in revenue from wagers from January through October, the most up-to-date data available.
That led to $365 million in state taxes being paid, of which $11.9 million went to Cook County, the Chicago area, via the 2% cut it gets from all betting revenue earned within its boundaries.
The state of Illinois already increased the tax cut taken from sports betting in 2025. State lawmakers are also arguing against the proposed Chicago city tax, pointing out that all gambling in the US is licensed and regulated by state governments.
State Rep. Dan Dekich, chair of the House Gaming Committee, introduced a bill late last year that would create a law prohibiting municipalities from imposing any sort of sports betting tax. Lawmakers will consider that proposal when the state legislature reconvenes in mid-January.
4.8
/ 5
betting.net™ Rating
BetMGM Review
Up To $1500 in Bonus Bets Paid Back if your First Bet Does Not Win
20+ sports available for wagering
Pre-match and in-play betting
Unique features like live streaming and boosted odds
Promo Code:
BETBONUSMGM
Bet Now
Gambling problem? Call 1-800-GAMBLER or 1-800-MY-RESET (Available in the US) 877-8-HOPENY or text HOPENY (467369) (NY) 1-800-327-5050 (MA), 1-800-BETS-OFF (IA), 1-800-981-0023 (PR). 21+ only. Please Gamble Responsibly. See BetMGM.com for Terms. First Bet Offer for new customers only (if applicable). Subject to eligibility requirements. Bonus bets are non-withdrawable. In partnership with Kansas Crossing Casino and Hotel. Promotional offers not available in Mississippi, New York, Ontario, or Puerto Rico.
4.8
/ 5
betting.net™ Rating
Top Features
- 20+ sports available for wagering
- Pre-match and in-play betting
- Unique features like live streaming and boosted odds
Cashout
yes
Live Streams
yes
Mobile Statistics
yes
Bet Now
Gambling problem? Call 1-800-GAMBLER or 1-800-MY-RESET (Available in the US) 877-8-HOPENY or text HOPENY (467369) (NY) 1-800-327-5050 (MA), 1-800-BETS-OFF (IA), 1-800-981-0023 (PR). 21+ only. Please Gamble Responsibly. See BetMGM.com for Terms. First Bet Offer for new customers only (if applicable). Subject to eligibility requirements. Bonus bets are non-withdrawable. In partnership with Kansas Crossing Casino and Hotel. Promotional offers not available in Mississippi, New York, Ontario, or Puerto Rico.
4.7
/ 5
betting.net™ Rating
Over 20 sports
Extensive betting markets
Live betting feature
Bet Now
Find out more on bet365's website
Whatever the moment. It's Never Ordinary at bet365. That's why if you sign up now you will receive $150 in Bonus Bets Win or Lose when you bet $5! Minimum $10 deposit required. Minimum odds -500 or greater. Bonus Bets wager excluded from returns. New customers only. T&CS, time limits and exclusions apply.GAMBLING PROBLEM? CALL 1-800-MY-RESET. 21+ (AZ/CO/IL/IN/KS/KY/LA/MD/NC/NJ/OH/PA/TN/VA) or 1-800-BETS OFF (IA). 21+ (18+ KY). Must be present in AZ/CO/IA/IL/IN/KS/KY/LA (select parishes)/MD/NC/NJ/OH/PA/TN/VA.
4.7
/ 5
betting.net™ Rating
Top Features
- Over 20 sports
- Extensive betting markets
- Live betting feature
Cashout
yes
Partial Cashout
yes
Live Streams
yes
Bet Now
Whatever the moment. It's Never Ordinary at bet365. That's why if you sign up now you will receive $150 in Bonus Bets Win or Lose when you bet $5! Minimum $10 deposit required. Minimum odds -500 or greater. Bonus Bets wager excluded from returns. New customers only. T&CS, time limits and exclusions apply.GAMBLING PROBLEM? CALL 1-800-MY-RESET. 21+ (AZ/CO/IL/IN/KS/KY/LA/MD/NC/NJ/OH/PA/TN/VA) or 1-800-BETS OFF (IA). 21+ (18+ KY). Must be present in AZ/CO/IA/IL/IN/KS/KY/LA (select parishes)/MD/NC/NJ/OH/PA/TN/VA.
4.7
/ 5
betting.net™ Rating
FanDuel Review
New Users – Bet $5 Get $200 in Bet Reset Tokens for 5 Days
Deep market coverage across major U.S. sports and leagues
Same Game Parlay builder is fast and easy to use
Live betting interface updates quickly with real-time odds
Bet Now
Gambling Problem? Call 1-800-GAMBLER or 1-800-MY-RESET. Call 1-888-789-7777 or visit ccpg.org/chat (CT). Hope is here. GamblingHelplineMA.org or call (800) 327-5050 for 24/7 support (MA). Visit www.mdgamblinghelp.org (MD). Call 1-877-HOPENY or text HOPENY (467369) (NY). 21+ (18+ DC, IA, KY, WV) only. New users only or text HOPENY (467369) (NY). Casino, First online real money wager only. $5 first deposit required. Min $5 wager required for 5 consecutive days. Bonus issued as non-withdrawable Bet Reset tokens. Refund from token issued as nonwithdrawable bonus bet that expire 7 days after receipt. Max refund $200 per day. Restrictions apply, including token expiration. See full terms at fanduel.com/sportsbook. Call 1-877-770-7867 (LA).
4.7
/ 5
betting.net™ Rating
Top Features
- Deep market coverage across major U.S. sports and leagues
- Same Game Parlay builder is fast and easy to use
- Live betting interface updates quickly with real-time odds
Cashout
yes
Live Streams
yes
Mobile Statistics
yes
Bet Now
Gambling Problem? Call 1-800-GAMBLER or 1-800-MY-RESET. Call 1-888-789-7777 or visit ccpg.org/chat (CT). Hope is here. GamblingHelplineMA.org or call (800) 327-5050 for 24/7 support (MA). Visit www.mdgamblinghelp.org (MD). Call 1-877-HOPENY or text HOPENY (467369) (NY). 21+ (18+ DC, IA, KY, WV) only. New users only or text HOPENY (467369) (NY). Casino, First online real money wager only. $5 first deposit required. Min $5 wager required for 5 consecutive days. Bonus issued as non-withdrawable Bet Reset tokens. Refund from token issued as nonwithdrawable bonus bet that expire 7 days after receipt. Max refund $200 per day. Restrictions apply, including token expiration. See full terms at fanduel.com/sportsbook. Call 1-877-770-7867 (LA).
Related Articles on betting.net™
+9
