Illinois lawmakers are moving quickly to overturn Chicago’s new wagering tax, setting up the latest clash over how the state regulates and taxes sports betting. Just weeks after the city’s 10.25% tax on wagers took effect, a bill advancing in Springfield would bar any local government from imposing taxes on state-regulated gaming operators. The proposal signals growing concern among legislators that allowing municipalities to layer on their own tax policies could further complicate the Illinois betting market.
Chicago’s 10.25% wagering tax officially took effect on January 1 after being introduced as part of Mayor Brandon Johnson’s budget plan. The rollout drew immediate scrutiny, particularly because there was no clear licensing framework in place. This prompted questions about how operators would comply and whether some might consider leaving the Chicago market.
In response, Rep. Daniel Didech filed HB 4171, a measure designed to reserve all gaming-related taxation authority exclusively for the General Assembly. The proposal cleared the House Gaming Committee without opposition and has secured 32 co-sponsors, reflecting broad backing at this stage of the session.
Industry stakeholders have also pushed back. The Sports Betting Alliance, which represents bet365, BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel, issued a warning. They stated that allowing municipalities (like Chicago) to tax a state-regulated industry (like Illinois) risks creating a patchwork system that could complicate compliance and long-term market stability.
Preventing Chicago’s additional wagering tax is ultimately about preserving a sustainable, regulated marketplace. Illinois sportsbooks have already absorbed multiple state-level tax increases recently. For example, Illinois put in a per bet tax last year.
Adding a 10.25% city tax on top of existing obligations would significantly raise operating costs within Chicago. For many operators, that added burden could make it economically unfeasible to continue offering services in the city.
If major sportsbooks were to scale back or exit the Chicago market, the impact would likely extend beyond operators. Consumers could face fewer legal betting options and reduced promotions.
Even worse, some bettors might turn to unregulated offshore platforms that do not provide the same consumer protections, responsible gaming safeguards, or regulatory oversight required under Illinois law.
By centralizing taxation authority at the state level, lawmakers protect the integrity of the regulated market and avoid creating conditions that unintentionally drive players toward riskier alternatives.
With unanimous approval from the House Gaming Committee, HB 4171 now heads to the full House for consideration.
If it clears that chamber, the bill would move to the Senate, where lawmakers would decide whether to advance the measure before the legislative session adjourns on May 31.
Given its early bipartisan support and 32 co-sponsors, the bill appears well-positioned at this stage.
