A new proposal in the Illinois General Assembly could halt Chicago Mayor Brandon Johnson’s attempt to impose an additional tax on sports betting within the city.
House Bill 4171, introduced this week by Rep. Daniel Didech, chair of the House Gaming Committee, seeks to bar local governments from independently taxing or regulating sports betting. The bill was filed just days after Johnson released his 2026 budget proposal, which included a 10.25% local tax on sports betting revenue. The city estimated the tax could bring in $26 million to help close a $1.15 billion deficit in its $16.6 billion budget.
In a press release, Didech said, “When the legislature legalized sports betting in 2019, it was never our intent to allow local governments to create their own rules for this industry.” He argued that Chicago’s tax plan would “hurt consumers, drive vulnerable people to predatory illegal markets and reduce state tax revenue.”
The legislation has already gained support from several Chicago-area lawmakers, including Reps. Curtis Tarver, Edgar Gonzalez, Angie Guerrero-Cuellar, and Mike Kelly. “We need to pass this legislation to protect Chicagoans from another tax and prevent an unmanageable patchwork of local regulations,” Kelly said.
Illinois’ Expanding Sports Betting Tax Framework
Illinois has significantly increased its sports betting taxes over the past two years. In 2024, a tiered tax system replaced the previous 15% flat rate, with operators now paying between 20% and 40% based on their revenue. That change added more than $260 million in new tax revenue to the state.
Additionally, Governor JB Pritzker’s most recent budget introduced a per-wager surcharge. Sportsbooks now owe 25 cents for each of the first 20 million wagers they process and 50 cents for every bet beyond that. In 2024 alone, Illinois bettors placed approximately 370 million wagers, with both DraftKings and FanDuel each handling more than 150 million.
In response, operators have implemented new cost structures. Several sportsbooks, including DraftKings, Caesars, and Fanatics, began charging per-bet service fees. Others, such as BetRivers and ESPN Bet, introduced minimum bet requirements.
Local vs. State Authority at Center of Debate
Didech’s bill would override Chicago’s proposed tax, which is still in the early stages of consideration by the City Council. According to Didech’s office, the bill is “in direct response to the City of Chicago’s plan to impose a local sports betting tax, and is designed to prevent policies that would harm consumers and undermine consistent statewide oversight.”
The Illinois legislature is currently in its fall veto session, which runs through October 30. If HB 4171 doesn’t advance during this period, it could be reintroduced during the 2026 legislative session. Johnson’s proposed budget, including the betting tax, is scheduled to take effect on January 1, 2026.
Broader Trend of Sports Betting Tax Hikes
Illinois isn’t alone in raising taxes on sports betting. States like Ohio, New Jersey, Maryland, and Louisiana have all introduced or passed increases this year. Illinois, however, remains among the most aggressive, already pushing operators to the edge with a near 50% effective tax rate for some.
Source:
“Illinois legislation would block Chicago mayor’s sports betting tax plan”, igamingbusiness.com, October 21, 2025
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