Chicago Considers Online Sports Betting Tax Despite Industry Opposition

Chicago’s financial team has put forward an idea to tax online sports bets. This could bring in millions to help the city’s tight budget. However, the sports betting world is not happy about it and is pushing back already.

Proposal for Chicago Per-Bet Levy Raises Fears of Higher Costs for Bettors

The Financial Future Task Force, brought together by Mayor Brandon Johnson to tackle a projected $1.1 billion shortfall in 2026, suggested a tax on each online bet placed within city boundaries. The group thinks a $0.25-charge per wager would generate about $8.5 million each year, while raising it to $0.50 could bring in around $17 million. Members of the task force pointed out that although Chicago already takes taxes from physical sportsbooks, this money is insignificant because 98% of betting happens online.

The proposal builds on recent state-level actions. In July, Illinois put in place its own per-bet tax, making operators pay $0.25 on the first 20 million bets and $0.50 on any extra wagers. The Sports Betting Alliance (SBA), a group speaking for operators like FanDuel, DraftKings, BetMGM, Fanatics, and bet365, claims that adding a city-level tax would double the rate. This would mean a $1 bet in Chicago would face $1 in taxes.

Industry executives warn that the measure might scare away smaller bettors. Some companies in Illinois have already bumped up their minimum bet limits to deal with the state tax increase. SBA warned that more hikes could push players to use offshore or unregulated sportsbooks, which offer no consumer safeguards or tax income.

Despite Player Outrage, Chicago Officials Tempted by Sports Betting Revenue

Bettors are getting more and more upset, too. SBA reports that Illinois residents have fired off over 100,000 complaints to politicians speaking out against the state’s per-bet tax since it kicked in. Social media echoes this anger from casual bettors who think fees are way out of whack compared to how much they’re betting.

Even so, city officials may find it tough to resist the appeal of additional income. According to state regulators, Illinois took in $5.2 million more in July from its tax on each bet, the first month under the new system.

As Chicago faces a huge budget shortfall, the task force presented its betting proposal as one of several tactics, along with steps like bringing back a head tax on employers and growing local service. It is not clear if the City Council will go for the betting tax. For the time being, Chicago gamblers are coping with higher costs at the state level, while keeping an eye out to see if city officials will tack on another charge.