As Chicago Mayor Brandon Johnson considers an additional tax on the sports betting industry, Sen. Patrick Joyce filed a bill that would penalize the city.
Johnson has proposed adding a 10.25% tax on revenue from wagers placed in the city. Joyce’s bill would strip state funding from Chicago in the exact amount the city would collect from the tax.
SB2760 would reduce the city’s share of the Local Government Distributive Fund from the state by amending the State Revenue Sharing Act. The change would not only apply to Chicago but to any city that adds a similar tax.
“Not withstanding any other provision of law, if a municipality imposes fees, surcharges, or other costs for the privilege of conducting or participating in sports wagering, then the total amount of those fees, surcharges, or other costs shall be deducted from that municipality’s allocation under this subsection and redistributed to the other municipalities and counties in this state,” the bill reads.
Another Bill Would Ban Chicago From Adding The Tax
The 2026 Chicago budget includes the tax. Johnson has said he won’t sign the bill nor veto it. Either action would result in the budget becoming law in January.
The mayor has said the tax would generate more than $26 million for the city, which faces a $1.2 billion budget gap.
Another bill at the statehouse would outright ban cities from imposing a tax on gambling. Rep. Daniel Didech, chair of the House Gaming Committee, has put forward a bill barring local jurisdictions from taxing, regulating, or imposing fees on gambling.
Didech and House Revenue Committee Chair Rep. Curtis Tarver have called the Chicago plan “a flawed policy that sets a poor precedent [and] provides minimal fiscal benefit.”
Operators in Illinois Already Heavily Taxed
The industry already faces a heavy tax burden in the state. Operators have threatened to pull out of Chicago over an added tax, which could have a huge impact on the tax money the state collects from sports betting.
“A shutdown of online sports wagering in Chicago, however temporary, would undermine the ordinance’s revenue and policy objectives by driving consumers to online platforms that dodge laws that ensure consumer protection, age verification, and responsible gaming protections,” Sports Betting Alliance chairman Jeremy Kudon wrote in a letter to the city in December. “A shutdown of legal online platforms will also risk jeopardizing millions, if not tens of millions, of dollars in state revenue.”
Earlier this year, legislators added to the tax burden by imposing a 25-cent tax on every wager for the first 20 million bets, which then doubles beyond that threshold.
Operators responded by passing the tax on to bettors through transaction fees or increased minimum bet sizes. The Illinois Gaming Board later reported that the number of legal wagers dropped by five million in September.
Along with the per-wager levy signed into law this year, the state also hiked taxes on operators in 2024. They enacted a tiered scale reaching up to a 40% tax rate.
