Published on: September 24, 2025, 05:17h.
Updated on: September 24, 2025, 05:17h.
- Proposed city tax increase could significantly boost revenue, according to task force
- If enacted, this levy would be in addition to Illinois’ already elevated OSB taxes
- Experts warn it may push bettors towards unlicensed betting platforms
Illinois currently imposes some of the highest online sports betting (OSB) taxes nationwide. However, Chicago residents may face an extra burden if the financially challenged city opts to follow a task force’s proposal.
A fresh report from Chicago’s Financial Future Task Force presents multiple suggestions to address the city’s projected $1.1 billion deficit for fiscal 2026. Notably, one recommendation proposes a tax on all online sports bets made within city limits. The task force anticipates that introducing a 25-cent tax on each wager could generate approximately $8.5 million annually. Increasing this tax to 50 cents could potentially double that figure.
“We suggest the City should consider implementing a $0.50 levy on all online bets made in Chicago. This could yield an additional $17 million in annual revenue,” states the task force. “These estimates presume that at least 20% of all state’s bets are placed within the city while accounting for a 10% loss due to some bettors opting to wager outside city limits.”
The task force highlights that while Chicago currently collects taxes on bets placed at in-person sportsbooks, this only yields minimal revenue as 98% of sports betting occurs through online platforms and mobile devices.
Illinois and its Affection for Sports Betting Taxes
Recent legislation that took effect in July establishes a 25-cent tax on operators’ first 20 million bets, increasing to 50 cents thereafter. The Sports Betting Alliance (SBA) contends that if Chicago enacts a 50-cent tax on each bet, it would result in an overall tax rate of 100% on a $1 bet.
The SBA, which includes various gaming companies, asserts that over half of the bets placed in Illinois are under $5, indicating that current state policies may negatively impact smaller bettors. Following the statewide tax hike, numerous operators raised their minimum bets, with Circa Sports opting for a $10 minimum.
Similar to their stance on the statewide tax rise, the SBA believes that should Chicago implement a similar tax, it may lead bettors to seek out unregulated sportsbooks, ultimately reducing revenue for both the city and state.
“This tax risks funnelling fans into the illegal market, which is a significant concern for state consumer advocates such as the Illinois Attorney General and the Better Business Bureau. Unregulated offshore operators provide cheaper sports betting options without necessary consumer protections like age verification and oversight, not to mention zero tax revenue,” the SBA remarked in a statement.
Illinois Bettors Facing Increased Taxation… For Now
With football season in full swing, analysts monitoring sports wagering stocks have yet to find any indication that increased taxes are deterring bettors in Illinois. Furthermore, data suggests that operators such as DraftKings, Fanatics, and FanDuel – who are charging per bet fees in the state – are not experiencing substantial customer losses.
The minimum bet adjustments being made by operators are relatively modest, typically setting limits below the average wagers of most bettors.
Although it remains uncertain whether Chicago will adopt the task force’s suggestions, indications are that many bettors in the Windy City may have to endure the changes.