Illinois legislators are pushing back against Chicago mayor Brandon Johnson’s plan to slap a new city tax on online sports betting, warning that piling on another levy could hurt a market that’s already taken a hit from higher state costs. The proposal would add a 10.25% municipal tax on online wagering revenue for bets placed within city limits, on top of Illinois’ newly revamped progressive state tax and a fresh per-wager regulatory fee.
Illinois only recently shifted from a flat 15% rate to a tiered tax structure that can reach 40% for the biggest operators, one of the steepest effective rates in the US. Industry sources told the higher take, plus the new per-ticket fee, is already showing up in operator behavior: fewer “no-brainer” promos, tighter pricing on popular markets and a stronger focus on high-margin parlays rather than straight bets.
Now lawmakers in Springfield are signaling that a Chicago-only tax is a step too far. A bloc in the state house is backing legislation that would block cities from layering on their own sports betting taxes or rules, arguing that a patchwork of local charges will confuse bettors and discourage legal operators from investing in brick-and-mortar sportsbooks at stadiums and arenas.
Their core message: keep the playing field level. If the effective tax rate keeps climbing, they warn, operators will pass the cost on to customers in the form of worse odds, fewer bonuses and clunkier product — and that’s exactly when offshore books start to look more attractive to price-sensitive sharps and casual fans alike.
For now, Chicago’s proposed tax is still just that — a proposal. But the pushback shows how fine the line has become between using legal sports betting as a revenue engine and taxing it so hard that the market’s momentum starts to stall.
