Illinois State Legislators Urge Chicago Alderman to Torpedo Mayor’s Sports Betting Tax

Chicago Mayor Brandon Johnson announced his 10.25% tax on mobile sports betting operators’ city revenues, but it has not only rankled the online sportsbooks but has also drawn the ire of state legislators who are advising the city’s alderpersons to reject the levy.

Chicago Goes Rogue

In what some may view as a bit of state hypocrisy, Illinois legislators are condemning Chicago Mayor Brandon Johnson’s city tax proposal on online sportsbook revenues, claiming it is not only onerous but could also pave the way for other cities and municipalities to do the same for not only sports betting operators but also allow the imposition of taxes on all goods and services facilitated through the state’s biggest city.

Legislative Opposition

Representative Daniel Didech, chair of the House Gaming Committee, and Representative Curtis Tarver II, chair of the House Revenue Committee, were among 29 state legislators to sign the letter objecting to the proposed 10.25% city tax on sportsbook revenues. Didech and Tarver had also co-sponsored HB 4171, a bill that would have allowed only the state to tax the sports betting industry operators.

“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 that undermines the consistency and predictability required for effective state regulation,” the letter reads. “The ripple effect could extend far beyond gaming. These types of policies could open the door for a patchwork of local taxes in other state-controlled policy areas, making enforcement and compliance nearly impossible.”

Lack of Consultation Fuels Tension

The legislature is taking umbrage that the city did not consult the state legislators, and its effort to unilaterally impose a tax without consulting anyone in the state is a bad precedent that could be mirrored in the future in a myriad of industries by the 200 other Illinois cities and towns.

“Had the City engaged the General Assembly in advance—particularly those of us who chair or serve on committees responsible for gaming, revenue, and general budget oversight—there may have been a path to shape a more sound and coordinated approach,” the letter reads.

“Unfortunately, that opportunity was lost. As has too often been the case, the City advanced this proposal without meaningful consultation or early dialogue, leaving legislators, even members who represent the City of Chicago, with no choice but to oppose the measure.”

Taxing Sportsbooks Into Oblivion

The outrage Illinois state legislators are displaying concerning Chicago’s tax on sportsbook revenues is a bit ironic, considering that they have increased Illinois sports betting taxes twice in two years, between the change to a tiered rate capped at 40% in 2024 and the per-bet tax imposed on July 1st of this year.

The Sports Betting Alliance (SBA) claims Illinois’ per-wager tax caused a 15% year-over-year decline in September online wagering in the state.

“The Illinois Gaming Board data released today is astounding,” SBA of Illinois spokesperson Maura Possley said in a statement. “While legal markets all across the country are growing, the Illinois market is shrinking thanks to the state’s recent tax hike.”

Naturally, the SBA wasn’t enamored with Chicago’s 10.25% sports betting tax proposal and rebutted with the following:

“This data is a warning sign for Chicago, Illinois, and other state policy makers that over-taxing legal betting will have profound negative ramifications for the sustainability of the legal market and future tax revenues for state coffers,” Possley said.