Published on: February 19, 2026, 08:25h.

Updated on: February 19, 2026, 08:25h.

• Illinois House committee progresses legislation to prevent Chicago’s sports betting tax hike
• If approved, it will confirm state lawmakers have the authority over gaming taxes
• Illinois increased sports betting taxes in 2024 and 2025

Illinois legislators seem to have encountered a tax increase they oppose. On Wednesday, the Illinois House Gaming Committee forwarded House Bill 4171 (HB 4171), which, if enacted, would prohibit local Chicago governance from establishing their own sports betting regulations, including tax policies.

Originally put forth by Rep. Daniel Didech (D), who chairs the gaming committee, HB 4171 was a response to the proposed sports betting tax of 10.25% on operator revenues proposed by Chicago Mayor Brandon Johnson (D). If Johnson’s initiative is enacted, sports betting companies within Chicago could face tax rates soaring to nearly one-third of their earnings.

This is significant, considering Illinois raised sports betting taxes in both 2025 and 2024. The previous year marked the introduction of a new fee of 25 cents for each wager on the first 20 million bets by an operator, with this rate doubling to 50 cents for every wager placed beyond that threshold. Furthermore, in the prior year, Illinois shifted to a progressive tax system, implying that larger operators, based on their market share, incur a higher tax rate than smaller competitors.

Didech Recognizes Earlier Tax Hikes

In a letter sent in November to Chicago aldermen concerning the sports betting tax proposal, Didech recognized the previously mentioned tax increases instituted by the state.

The Illinois General Assembly has already raised the sports-betting tax twice in successive years—first moving from a flat 15% to a tiered rate that can reach up to 40%, followed by introducing a per-wager tax,” he remarked. “Illinois now carries one of the heaviest sports-betting tax burdens in the United States. This was undoubtedly a challenging decision to ensure the state has the funds necessary to adequately assist its residents. Thus, we acknowledge the need to explore revenue generation for essential services.”

He emphasized that permitting home rule cities to establish their own tax regulations for state-regulated sectors could initiate a “dangerous precedent,” potentially leading to inconsistent frameworks that undermine the uniformity sought by state legislation.

“The repercussions could extend well beyond gaming,” the lawmaker commented. “Such policies may pave the way for a fragmented array of local taxes in other areas regulated by the state, complicating enforcement and compliance efforts considerably.”

Sports Betting Alliance Warns Increased Taxes Diminish Betting Activity

The Sports Betting Alliance (SBA), an industry trade association, is challenging Johnson’s proposed tax scheme legally and appears to back Didech’s bill.

The trade organization has indicated that the number of bets placed through regulated channels in Illinois saw a decline from September to November 2025, attributed to the aforementioned per bet tax. However, data suggests the overall handle has not been greatly affected.

“This data raises a red flag that Illinois’ inconsistent regulations directly impact state revenue and the public policy aims related to responsible gaming,” the SBA stated in a press release. “Faced with elevated taxes, bettors are turning to unregulated betting platforms and bookmakers that offer better rates, operating without any regulation or consumer safeguards in place, ultimately contributing no tax revenue to the state.”