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The Chicago online sports betting tax could soon increase under a new proposal from Mayor Brandon Johnson.
The plan, included in the city’s 2025/26 Protecting Chicago Budget, would introduce a 10.25% tax rate on adjusted gaming receipts from operators.
Chicago online sports betting tax part of wider budget strategy
The proposed tax aims to boost city revenue without raising property taxes.
Johnson presented the idea as part of “Priority 6: Balance an equitable budget.” His proposal highlights how online sports wagering has grown rapidly, with over $48 billion wagered in Chicago over the past five years. The new rate, he said, ensures the industry continues to support city development while contributing fairly to local funding goals.
According to the plan, the tax could generate an additional $1.15 billion for the city. Alongside sports betting, the proposal also targets other revenue sources, including a surcharge on large employers, adjustments to the Personal Property Lease Tax, and changes to the transport tax structure.
These measures could add $500 million to Chicago’s 2026 budget.
More taxes expected for Chicago’s entertainment and gaming sectors
Recreation taxes could also increase, further affecting local gaming operators.
The budget outlines a 15.8% increase in recreation taxes for sectors such as gaming, liquor, and cannabis. As a result, sports betting operators in Chicago may face higher costs beyond the proposed 10.25% levy.
Overall, the plan aims to create a $6.06 billion corporate fund by 2026, marking a 4.7% increase from the current budget. Johnson said the initiative focuses on fairness and economic responsibility.
Johnson defends new Chicago online sports betting tax proposal
The Mayor said the measure supports city priorities while keeping property taxes stable.
Johnson said:
“To make Chicago more affordable for working families, the Protecting Chicago Budget advances a fair and balanced revenue strategy—one where everyone contributes in line with their capacity.”
He added that the proposal reflects the results of the city’s Budget Engagement Survey, which showed residents supported new revenue sources like online sports wagering, a community safety surcharge, and higher vacant building fees.
Industry response and context
The new proposal comes as Illinois operators continue adjusting to earlier state tax hikes.
In July, Illinois introduced a new state wagering tax, prompting mixed reactions from the industry. Some operators, including FanDuel and DraftKings, introduced transaction fees or minimum bet amounts to offset the higher costs.
If approved, the Chicago online sports betting tax could further reshape how operators manage margins and pricing for players.
Could this move spark a new wave of debate on how cities balance public funding and private sector growth?
Source: Gaming America
