Illinois Governor’s Budget Proposes Gambling Tax Hike

With the introduction of his $57 billion state budget for FY2027, Illinois Governor JB Pritzker is aiming to generate additional tax revenue, including $120 million from a tax hike on table games and electronic gambling device operations.

Governor Pritzker’s Proposal Could Help Fund Education in the State

Pritzker plans to increase revenue by adjusting the tax structure for 15 of Illinois’ 16 casinos. His budget proposal suggests a tax rate on table games ranging from 15% to 50%, up from the current 15% to 20%. Chicago’s casino is exempt, as it follows a separate tax structure.

Under the current system, table game operators are taxed at 15% on adjusted gross revenue up to $25 million. If an operator exceeds this threshold, the tax rate rises to 20%. However, Pritzker’s FY2027 budget seeks to align the tax treatment for table games with that of slots and other gambling games in Illinois.

It’s not the first time that Illinois has been thinking of raising its tax income thanks to increases in the rates of gambling and gaming. Last year, for example, Illinois passed a new tax on sports betting in the hopes of raising an additional $36 million for the state budget.

Ironically, however, that law also saw a significant decrease in the betting activity in Illinois. The issue was so prevalent that earlier this month, officials even considered reversing the betting tax law.

But back to the current proposal, it says that in recent years, the state and units of local government have received lower revenues from casinos. This has opened gaps in funding or forced shifts in resources from other causes, Gov. Pritzker’s budget proposal reads. The budget proposes using the additional revenue from the revised tax structure to support the Education Assistance Fund, which provides grants and financial aid programs.

What Else Is Gov. Pritzker Proposing?

Pritzker’s FY2027 budget proposal also includes a plan to consolidate state regulatory agencies. The budget recommends merging the Illinois Gaming Board and the Illinois Racing Board into a single entity, the Department of Gaming Regulation and Enforcement. This department would “assume all the powers and responsibilities” of the two existing regulators.

According to the proposal, the new department would oversee the collection of state taxes from sports betting, casino gambling, video gaming, horse racing, and off-track wagering. Pritzker’s proposal outlines an operational structure led by an executive director and two assistant directors. If approved, the merger would take effect on July 1, marking the start of Illinois’ new fiscal year.