Chicago lawmakers are considering lifting the city’s longstanding ban on video gaming and exploring new taxes on online sports betting—but only if the state agrees to a more equitable tax split.
At a City Council Revenue Subcommittee hearing Monday, alderpersons criticized the current state-dominated revenue structure. Ald. William Hall (6th), the subcommittee chair, pointed to $1.1 billion in annual video gaming revenue across Illinois. Of that, $955 million goes to the state, while just $164 million is distributed among local governments.
“They would generate a lot of money opening up this market,” said Chief Financial Officer Jill Jaworski. “The state gets a much larger percentage than we do” from a system that “is not favorable to us.”
Current Tax Structure Called a “Loser” for Chicago
A recent analysis by Christiansen Capital Advisors concluded that video gaming would bring little financial benefit to Chicago under the existing tax framework. City revenue projections are modest—just over $3 million in 2026, increasing to $46.7 million by 2035—unless the tax rate is revised.
Ald. Jason Ervin (28th), chair of the Budget Committee, expressed frustration with the limited e under the current model. “It doesn’t take a rocket scientist to figure out” this structure is “a loser for Chicago,” he said, noting the city would need to quadruple activity just to break even. “The question comes down to, how do we find a reasonable ask between the state to make this all work?”
Ervin also criticized the Johnson administration for not presenting alternatives to the existing tax setup. “We really want to find solutions here—not just say ‘no’ to what we already know the answer to be.”
Jaworski clarified the goal of the hearing was not to bury the issue, but to underscore the need for better terms. “That can be a very strong argument for going to the state to try to get changes… that would make it more favorable to us,” she said.
Calls to Regulate Illegal Machines and Tax Online Betting
South Side alderpersons also urged the city to take action against unregulated sweepstakes machines, which are commonly found in gas stations and liquor stores. Ald. Stephanie Coleman (16th) said they contribute to crime and generate no revenue for the city. “They have become a haven for crime,” she said.
Ald. Jeanette Taylor (20th) emphasized their prevalence in Black neighborhoods. “I can take you to three different liquor stores … and show you those machines that have been there for five-plus years that we have not made a dime on,” she said, calling for a cap of three to five machines per store, plus mandatory security.
Jaworski acknowledged enforcement is difficult because “sweepstakes machines live in a gray area,” but agreed the city needs clear legislation.
Taylor also pushed for taxing online sports betting platforms like DraftKings. Jaworski confirmed that the city has already analyzed the potential for imposing local taxes on such platforms.
“People download them and gamble all the time. We should be able to get money off of them,” Taylor said.
Source:
“Online sports betting, legal video gaming could be cash cow for Chicago, alderpersons say”, chicago.suntimes.com, Jul 21, 2025
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