Any hopes in Chicago of taxing Illinois sports betting for a slice of the revenue pie may be dashed by legislation.
HB 4171 would outline in the Sports Wagering Act that only the Illinois legislature can tax, regulate, or license sports betting in the state. The bill was introduced by Rep. Dan Didech and four chief cosponsors who represent the city of Chicago:
- Rep. Curtis Tarver
- Rep. Edgar Gonzalez
- Rep. Angelica Guerrero-Cuellar
- Rep. Mike Kelly
“When the legislature legalized sports betting in 2019, it was never our intent to allow local governments to create their own rules for this industry,” said Rep. Didech, who is also chair of the House Gaming Committee. “Chicago’s proposal will hurt consumers, drive vulnerable people to predatory illegal markets, and reduce state tax revenue. The city should work collaboratively with the state to ensure sound, informed policy decisions are made on this issue.”
The Illinois Legislature adjourned May 31, so HB 4171 cannot be heard until the 2026 session opens on Jan. 14.
Full text of bill
The sports betting act would be updated with a section concerning home rule. A home rule unit in Illinois is a county or municipality that has an elected CEO.
“The regulation and licensing of sports wagering, including, but not limited to, the imposition of fees, surcharges, or other costs for the privilege of conducting or participating in sports wagering, are exclusive powers and functions of the State. A home rule unit may not regulate or license sports wagering. This subsection (a) is a denial and limitation of home rule powers and functions under subsection (h) of Section 6 of Article VII of the Illinois Constitution.
“A home rule unit may not impose or collect a tax on sports wagering or a tax on receipts generated from sports wagering. This subsection (b) is a denial and limitation of home rule powers and functions under subsection (g) of Section 6 of Article VII of the Illinois Constitution.”
What is proposed Chicago sports betting tax?
Chicago Mayor Brandon Johnson included a 10.25% online sports betting tax in his fiscal 2026 budget.
The concept of taxing Illinois licensees on their wagers from within Chicago emerged over the summer. The Chicago City Council first considered a per-bet tax similar to what went into effect statewide on July 1.
The city already benefits from Illinois sports betting revenue. Cook County receives 2% of online gross receipts from bets placed within the county.
Those proceeds are expected to hit $13.6 million in fiscal 2025, which ends Nov. 30. That projection drops to $11.2 million for fiscal 2026.
