Chicago officials are considering adding a new tax on every sports bet placed in the city. This would come on top of Illinois’ statewide betting tax, which began in July. Sportsbooks and industry groups argue that the extra charge could make betting more expensive for players and harm the state’s legal market.
In an August 31 report, the Chicago Financial Future Task Force recommended a new 50-cent tax on every online sports bet placed within city limits. Mayor Brandon Johnson launched this group to help address the city’s projected $1.1 billion budget deficit. The proposal would be in addition to Illinois’ existing per-bet tax, which already requires operators to pay up to 50 cents on each wager.
The Chicago Financial Future Task Force projected an additional $8 to $17 million in annual revenue from this new tax policy.
If adopted, Chicago would be the first U.S. city to layer a municipal tax on top of a state-level sports betting levy. While this would bring in revenue for the city, it comes at a major cost to players.
For recreational sports bettors in Chicago, a new 50-cent city tax on every online wager would quickly add up. Placing a handful of small wagers during a weekend of NFL games could see several dollars in fees on top of their actual bets. Over the course of a season, that cost could grow into the hundreds for more frequent players.
The impact would be most noticeable for low-stakes bettors. A $1 or $2 wager would carry the same 50-cent surcharge as a $50 or $100 bet, making smaller plays far less attractive. This could discourage casual fans who enjoy micro-betting or experimenting with parlays, narrowing the market to higher-stakes players.
Beyond the individual bettor, Chicago’s added tax would make the city one of the most expensive places in the country to bet legally.
Popular operators have already put in surcharges per bet in Illinois. For example, DraftKings charges an additional 50 cents per wager. With an additional tax in Chicago, that could influence DraftKings to increase its surcharge.
Not only does this new tax proposal make Illinois a less desirable market for operators, but it also creates more risks for players. Chicago bettors could be pushed to drive outside of city limits or even state lines to place their wagers.
Even worse, it may force players to try out offshore sportsbooks. These platforms would appear desirable to recreational users due to the absence of a surcharge, but they don’t have the same safeguards in place as licensed operators.
The Sports Betting Alliance (SBA) is trying to take action against the Illinois sports betting tax. Players can fill out a form on the SBA website to express their displeasure with the proposal. The SBA provides clarity for each user, describing its negative impact on players.
As city officials weigh the proposal, the outcome could set a precedent for how far local governments can go in taxing sports betting, and how much players are willing to push back to maintain a fair environment for all parties involved.
