Chicago City Council members are discussing a local tax on online sports betting, adding to previous tax-related changes in Illinois.
The council has members aiming to generate additional revenue for Chicago by imposing a local tax on online sports betting operators. City Council member Jaenette Taylor has expressed her desire for Chicago to directly benefit from the popularity of betting apps.
“People download them and gamble all the time,” said Taylor during a Revenue Subcommittee hearing last week. “We should be able to get money off of them.”
Taylor is calling for a local tax on sports wagering as Chicago Mayor Brandon Johnson gathers information on a potential tax hike. According to Chicago Chief Financial Officer Jill Jaworski, Johnson’s office is collecting data on a potential local tax on wagering.
Taylor is also aiming to generate additional revenue for Chicago through sweepstakes machines and video lottery terminals. She and Ald. William Hall want the city to tax sweeps machines and VLTs in a manner that benefits municipalities and not just the state.
“You’ve got to figure out a way to make this work because you’ve got businesses in the city that are looking for the revenue,” said Budget Committee Chair Jason Ervin during the discussion. “You’ve got a City Council that’s looking for additional revenue. We really want to find solutions here—not just say `no’ to what we already know the answer to be.”
SBC Americas reached out to Johnson for comment and will update if a response is received.
Illinois introduces a sliding scale for tax rates
City Council members are calling for a local tax after statewide tax changes in Illinois.
In 2024, the state introduced a sliding scale for taxes on sports betting. Illinois requires online operators to be taxed based on their adjusted gross revenue.
The plan mandates operators that generate over $200 million in annual revenue to be taxed at a 40% rate. Operators under that revenue threshold are taxed at a 20% rate.
Illinois had previously taxed online sportsbooks at a flat 15% rate.
Sportsbooks required to pay per-wager tax in Illinois
Pritzker’s latest budget plan made additional changes to Illinois tax rules.
Licensed online sports betting operators in the Land of Lincoln are being charged at least 25 cents per wager as part of a new budget plan signed in 2025. The plan mandates operators to pay 50 cents per wager after the first 20 million bets they receive in a year.
Operators including DraftKings, Fanatics and FanDuel responded to the per-wager tax by announcing transaction fees on online wagers in Illinois. Starting Sept. 1, DraftKings and FanDuel will be applying a 50-cent transaction fee on online wagers. Earlier this month, Fanatics also announced plans to implement an undisclosed transaction fee in the state.
The Sports Betting Alliance, a coalition of operators, voiced its opposition of the per-wager tax in Illinois. Its membership includes BetMGM, DraftKings, FanDuel and Fanatics.
