177% up to 5BTC + 77 Free Spins!
New players only. Exclusive Welcome Bonus of 177% + 77 Free Spins
Chicago budget talks now sit at the center of a wider fight over how far sports betting taxes can go. City leaders push ahead with a local levy, while state lawmakers warn the pressure could backfire.
Good to Know
A revised Chicago budget filed last week keeps a 10.25% tax on sportsbook operators within city limits. Twenty seven of the 50 Chicago alderpeople backed the revision, maintaining a rate first introduced by Mayor Brandon Johnson earlier in the fall.
Chicago faces a $1.2 billion budget gap. City officials see the sportsbook levy as one piece of a broader revenue plan. If approved, the tax would begin on Jan. 1 and sit on top of existing state and county charges.
Sportsbooks already pay Illinois a tiered tax of 20% to 40% on gross gaming revenue. On top of that come per wager fees and a 2% Cook County tax.
Not everyone in Springfield agrees with adding another layer. Illinois Rep. Dan Didech, chair of the House Gaming Committee, introduced legislation aimed at blocking local taxes on sports betting after Johnson proposal surfaced.
Thirty state representatives also signed a letter urging Chicago City Council to reject any new local sportsbook tax. Their argument centers on cost pressure and player behavior.
“If you increase the tax so it becomes cost prohibitive for gamblers, they will seek out overseas sites that … are more dangerous, more predatory, untaxed and unregulated,” Didech told the Chicago Sun-Times. “That’s a direct loss in tax revenue for the state. That impacts our ability to invest in infrastructure.”
Chicago budget staff estimate the sportsbook tax could raise up to $26 million. City council finance members already rejected a proposed corporate tax that might have generated $100 million, narrowing options.
The revised plan also raises several other fees and fines, including charges tied to inspections, false 911 alarms, and alcohol.
Illinois lawmakers started sports betting with a flat 15% tax rate. In 2024, the state shifted to a tiered model ranging from 20% to 40% based on operator revenue.
Earlier in 2025, the state added per wager fees. Sportsbooks now pay 25 cents on each of the first 20 million bets and 50 cents on each bet beyond that mark. Operators responded with changes like bettor fees and minimum wager thresholds.
September marked the first full month under the per wager system. Bettors placed 30.6 million bets, about 5 million fewer than a year earlier. At the same time, average wager size climbed 28% and total handle reached $1.42 billion, a 9% year over year increase.
Illinois collected $28.7 million in sports betting taxes during September, including $10.6 million tied to per wager fees. State revenue rose $740,920 compared with the prior year.
At the National Council of Legislators from Gaming States winter conference, Illinois Rep. Jehan Gordon Booth addressed sports betting taxes during a regulator roundtable.
She linked future tax pressure to widening budget gaps tied to the One Big Beautiful Bill, the federal tax and spending law signed earlier in the year.
“They 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. This will be a problem in budgets for the foreseeable few years in budgets. I don’t want to see us continue to deteriorate the industry.”