The members of the Sports Betting Alliance have informed Chicago Mayor Brandon Johnson that, if things don’t change, they will be forced to cease offering online wagers in the city at the start of the year.
In advance of a proposed Monday meeting with Johnson the SBA penned him a letter warning that, as the current budget stands, there is a new city requirement for sports betting operators but no licensing rubrics. With no standards to adhere to, SBA members are worried that staying online in the Windy City would risk noncompliance.
SBA members include DraftKings, FanDuel, BetMGM, Fanatics Sportsbook and bet365.
Budget references mysterious ‘City license’
The budget language around operators in the state does offer mixed messages about what is required to operate an online sportsbook in the state. The language around the tax hike makes multiple meentions to a “City license” and declares that “valid City licenses including a primary sports license and, if applicable, necessary secondary sports licenses.” These secondary licenses are defined as the licenses held by management services providers, the online operators who provide the platforms for their in-state partners.
However, later in the language of the sports betting section, it plainly states that any online operator with a master license from the state is allowed to conduct online racing in the state and makes no mention of a City license.
“As drafted, the proposed budget and revenue ordinance would impose a City licensing requirement effective January 1, 2026, yet the City does not currently have a licensing rubric that contemplates online sports wagering operators. In the absence of defined terms, application standards, required documentation, and administrative procedures, operators would have no meaningful way to comply with the ordinance upon its effective date,” the SBA letter noted. The SBA is urging a 180-day delay of enforcement to develop a licensing rubric, but reiterated its ultimate preference would be a budget without these new financial burdens on the industry.
Budget would also impose 10.25% city tax on sports bets
Johnson’s proposed 2026 budget includes an additional 10.25% tax rate on online sports bets within the city. That is on top of the statewide tax rate whjch can range from 20% for smaller operators to 40% for operators like DraftKings and FanDuel.
The Illinois Gaming Board (IGB) also implemented a per-bet fee of 25 cents on each wager placed in the state. The fee increases to 50 cents once an operator accepts 20 million wagers.
The SBA has been outspoker and active about the rapidly changing tax situation in Illinois, as the state has gone from a state with a relatively average tax rate to a state that rivals New York as one of the most expensive to operate in.
The proposed meeting between the SBA and Johnson’s office is set for Monday, but local Chicago press says there could be a vote on an alternative budget as early as Saturday.
The alternative budget includes the legalization of video gambling terminals (VGTs), which has received serious pushback from Bally’s, that currently operates a temporary casino in the city and is in the process of finishing construction on the permanent Bally’s Chicago facility.
