Chicago Mayor Proposes 10.25% Tax on Sports Betting Revenue

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Chicago Mayor Proposes 10.25% Tax on Sports Betting Revenue

Chicago Mayor Brandon Johnson has proposed a 10.25% city tax on gross sports betting revenue as part of his 2026 budget plan. The measure would apply to both retail and online sportsbooks operating within Chicago’s limits.

The proposed tax aims to generate millions in new revenue to help close the city’s projected budget gap. According to city officials, the measure could contribute up to $30 million annually if approved by the City Council.

Johnson’s new budget plan follows recommendations made by the Chicago Financial Future Task Force. The group, formed to identify sustainable fiscal strategies, released its Options for Chicago’s Financial Future report earlier this year.

In the report, the task force proposed a local 50-cent tax on all online wagers placed within the Windy City. It estimated that such a per-wager tax could generate as much as $17 million in additional annual revenue.

Additionally, the analysis assumed that about 98% of all sports betting in Chicago occurs online and that at least 20% of Illinois’ total online wagers come from the Chicagoland area.

To ensure realistic projections, the task force also factored in a potential 10% loss rate due to bettors avoiding the local tax. 

Chicago Mayor Johnson’s broader proposal to tax gross sports betting revenue reflects a more direct approach to capturing funds from the city’s fast-growing online wagering market.

Implications on Chicago Sports Betting Markets

Currently, Illinois imposes a 15% state tax on sports betting revenue. If Johnson’s proposal passes, Chicago operators would face one of the highest combined tax rates in the country. The Mayor defended the measure, saying it ensures major operators contribute their “fair share” to support vital public services and infrastructure.

The tax proposal comes amid increasing scrutiny over sports betting expansion in urban markets. Chicago’s move would mark one of the first municipal-level taxes targeting sportsbook operators since sports betting was legalized in Illinois in 2020.

Mixed Reception to the Proposed Sports Betting Tax

Reactions to the proposal have been divided. Supporters, including several City Council members, argue that the additional tax will provide a steady revenue stream without burdening residents directly. They claim it aligns with Chicago’s efforts to promote responsible gaming while funding community programs.

However, industry stakeholders and operators warn that the tax could discourage investment and limit competition. Representatives from major online sportsbooks argue that higher taxes may push bettors toward platforms operating outside city limits. 

Moreover, critics also fear it may reduce promotional offers and payouts for local bettors.

What Chicago Mayor’s Proposal Could Mean for the City’s Sports Betting Industry

If enacted, the 10.25% tax could reshape how sportsbooks operate in the Windy City. Experts predict that smaller operators might scale back marketing efforts or relocate to avoid additional costs. Larger companies, however, may adapt through pricing adjustments or reduced promotional spending.

As Chicago’s City Council debates the measure, local bettors await its outcome closely. Whether the new tax boosts revenue or stifles growth, it will set a precedent for other U.S. cities exploring similar measures.

For those looking to bet responsibly, check out our curated list of trusted online sportsbooks available to Chicago players today.