A group of Illinois state representatives asked the 50 Chicago alderpersons not to support a new sports betting tax in the mayor’s budget proposal.
The letter from 29 representatives urged against approving the proposed 10.25% tax imposed on online sports betting done within the city of Chicago. Signing the letter were Rep. Daniel Didech, chair of the House Gaming Committee, and Rep. Curtis Tarver II, chair of the House Revenue Committee.
This is the latest step taken by Didech and Tarver to kill the proposal from Mayor Brandon Johnson. They were two of the five state representatives to cosponsor HB 4171, which would make it clear that only Illinois’ state legislature can tax sports betting.
Letter presents multiple arguments
The letter calls out three reasons not to support a budget that includes the proposed tax:
- Flawed policy that sets a “poor precedent.”
- Estimated $26 million annual impact is a “minimal fiscal benefit.”
- Reflects communication gap between Chicago and the state legislature.
The letter calls the policy “deeply problematic” for two main reasons. First, the legislature has already raised 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 added July 1.
Perhaps more importantly, such a policy could lead to Illinois’ more than 200 other home-rule municipalities to impose something similar.
“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.”
Legislature could have helped
The letter says it does not intend to “target or criticize the city” but it does plainly say legislators could have helped with a better idea.
“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.”
Latest sports betting tax felt in Sept.
The per-bet tax added this summer led to lower total bets placed in September.
Operators must pay 25 cents per bet for the first 20 million bets, doubling to 50 cents for each bet above 20 million annually. Half of the state’s sportsbooks, including the most used in DraftKings and FanDuel, decided to pass the charge to players.
That tax led to a 15% decrease in total bets placed with 30.6 million made this September. That dropped gross revenue by $32 million compared to last year, though taxes were still up slightly since the per-bet tax generated $10.6 million this year.
