Illinois lawmakers are stepping up pressure on Chicago leaders to reconsider Mayor Brandon Johnson’s plan for a 10.25% local tax on online sports wagers, arguing that the city-level charge could destabilize an already strained marketplace. The appeal comes as operators navigate the first full month under the state’s newly implemented per-bet fees—changes that have lowered total betting volume even while propelling September’s handle to a record $1.42 billion.
Thirty state representatives recently warned Chicago’s 50 alderpersons that another layer of taxation could accelerate the migration of bettors toward unregulated offshore platforms. Their warning follows data showing that September’s 30.6 million bets represented a 15% year-over-year decline, though the average wager climbed 28%, helping raise overall handle by 9%.
Rep. Dan Didech, who chairs the House Gaming Committee, cautioned that overtaxing could ultimately backfire. “If you increase the tax so it becomes cost prohibitive for gamblers, they will seek out overseas sites that … are more dangerous, more predatory, untaxed and unregulated,” he told the Chicago Sun-Times. “That’s a direct loss in tax revenue for the state. That impacts our ability to invest in infrastructure.”
Johnson included the proposed city levy in his $16.6 billion budget, estimating it would add $26 million annually. But state officials argue that rising wagering costs already incorporated into the state’s new tax structure—particularly the per-bet fees—could limit how much more the market can absorb.
Legislators Warn of Broader Risks Beyond Sports Betting
Resistance from the General Assembly has solidified through a separate letter sent by 29 representatives, including Didech and House Revenue Committee chair Rep. Curtis Tarver II. The letter opposes the city tax on three grounds: it sets a “poor precedent,” offers only a “minimal fiscal benefit,” and illustrates a widening communication gap between Chicago and state leaders.
The representatives argued that the city-specific measure is “deeply problematic” not only because Illinois has twice raised sports-betting taxes in two years, but because more than 200 home-rule municipalities could follow suit. “If each (or even many) were to impose its own tax on a state-regulated industry, we would end up with a fragmented and unstable framework … making enforcement and compliance nearly impossible,”the letter states.
They also noted that earlier collaboration could have produced a more unified strategy. “Had the City engaged the General Assembly in advance… there may have been a path to shape a more sound and coordinated approach,” the letter reads. Instead, legislators say they were left with “no choice but to oppose the measure.”
Meanwhile, sportsbooks are adjusting to the state’s new per-wager fees—25 cents for each of the first 20 million bets and 50 cents thereafter—costs that several operators, including FanDuel and DraftKings, have passed on to bettors. September’s per-bet tax generated $10.6 million, contributing to a slight overall increase in state tax revenue despite sportsbook revenue falling from $135 million to $103 million year-over-year. FanDuel parent Flutter’s CEO Peter Jackson said the new charges had “no impact” on the company, noting Illinois trends match those seen in other states.
The debate in Illinois mirrors a national trend: Maryland, Ohio, New Jersey, and Louisiana have all recently raised sports-betting tax rates, and industry observers expect more states to consider increases in 2026.
Source:
‘’Illinois lawmakers push back on Chicago sports betting tax hike’’, igamingbusiness.com, November 26, 2025.
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