Former Chicago Mayor Proposes 10% Tax on Online Gambling to Fund Education

Former Chicago Mayor Rahm Emanuel has proposed a new 10% tax on online gambling and prediction markets to help finance research in areas where the United States is competing with China.

Ex-Chicago Mayor Proposes Tax on Online Gambling

The former Illinois representative, White House chief of staff, and US ambassador to Japan’s proposal would impose a 10% federal transaction fee on all wagers placed through licensed online sportsbooks and casino apps, as well as on contracts purchased on prediction platforms. He estimates the measure could generate between $30 billion and $50 billion in revenue. These funds would be directed toward research in areas such as artificial intelligence, national security technology, cancer, life sciences, fusion energy, and quantum computing.

The tax proposal comes after Emanuel previously called for a ban on federal employees at all levels from participating in prediction markets. Implementing his plan would require federal legislation, and key details remain unresolved – such as whether the tax would be applied to gross or net operator revenue, overall betting volume, or each transaction.

Is There a Political Side to the Proposal?

While other names such as Gavin Newsom and Kamala Harris are widely seen as leading contenders for the Democratic nomination ahead of the 2028 election, Emanuel could also enter the race. However, he objected to questions about whether the policy rollout was meant to get a jump on other Democratic contenders, instead saying that his focus is on “the American people getting ahead and America staying ahead.”

However, he still took the time to challenge President Trump’s current ruling of the country, arguing that the country has become stagnant. Speaking of Trump, the US president has recently been embroiled in a bizarre controversy, where he appears to have promoted the unlicensed gambling site Stake in a post on Truth Social.

But back to Emanuel, he argued that by proposing the new 10% fee to fund an “Innovation Fund,” he wanted to shift away from rewarding gambling and instead support entrepreneurs and investment in America’s future. He also argued that the proposal would help bring the United States back in line with China, which he said has gained an edge following President Donald Trump’s reductions in research support and university funding. 

According to the Associated Press, between January and May 2025, the administration cut $11 billion from universities nationwide, including significant reductions for institutions such as Harvard, Penn, Columbia, Cornell, Northwestern, Brown, and UCLA.