The sports betting industry could soon be forced to cough up even more cash in Illinois courtesy of a Chicago-style tax hike.
- Chicago Mayor Brandon Johnson's 2026 budget proposal includes a new 10.25% tax on online sports wagering revenue.
- The tax aims to generate $26.2 million for the city and target an industry that has seen national growth.
- The proposal faces potential resistance from the sports betting industry, which is already burdened by recent Illinois tax hikes.
Chicago Mayor Brandon Johnson presented his 2026 budget proposal to the City Council on Thursday.
Among the proposals was a new “Online Sports Wagering Tax,” which will cost “any licensee engaged in the business of sports wagering in the City” a 10.25% cut of their adjusted gambling revenue.
Johnson’s proposed measure is projected to raise approximately $26.2 million in new tax revenue for the city, which would go toward offsetting a very small part of Chicago's $16.6-billion budget for 2026.
Nevertheless, the budget overview said the tax would be applied to “an industry that has grown rapidly, with over $48 billion wagered nationwide in the past five years.”
“The measure ensures this expanding sector contributes to the City’s shared priorities,” reads the document.
The Chicago way
While there is no guarantee the new Illinois sports betting tax survives the Chicago budget process, the fact it is being proposed at all is likely a source of irritation for the gambling industry. The new tax would also be in addition to the rising, state-imposed tax costs for operators in Illinois.
Indeed, online sportsbook operators have already had to swallow a higher tax rate for their revenue as well as a new per-bet tax that kicked in this summer, increasing the cost of doing business in Illinois considerably.
Bettors, meanwhile, have had to contend with new measures taken by sportsbook operators to offset the added tax costs, namely transaction fees and wagering minimums.
The Sports Betting Alliance sounded the alarm in September over another per-bet tax that was recommended by a Chicago city task force. Johnson has apparently gone another way, but the prospect of a Chicago tax seems likely to prompt similar pushback.
“Unregulated, offshore operators offer cheaper sports betting alternatives for consumers, without any protections - including age verification - and without any oversight, not to mention no tax revenue whatsoever,” the SBA warned.
