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Chicago’s proposal to add a 10.25% tax on sportsbook revenue has quickly turned into a test of power between City Hall and Springfield.
The city pitched the levy as a way to ease budget shortfalls, but lawmakers at the state level are now moving to shut it down. Their bills, introduced in both chambers, aim to strip local governments of the authority to impose new gambling taxes, a direct challenge to Chicago’s plan.
The clash comes on top of the statewide tax that already applies to sports wagers, a charge that began in July at $0.25 for each of the first 20 million bets placed annually, doubling to $0.50 once that threshold is crossed.
Sen. Joyce’s two new bills
Senator Patrick Joyce put forward two proposals on January 13 aimed at reshaping how sports betting is taxed in Illinois. The first, SB 2800, seeks to amend the Sports Wagering Act by placing full authority in the hands of the state.
If passed, it would immediately strip cities and counties of the right to levy their own fees or taxes on sportsbooks, relying on constitutional provisions to limit home-rule powers.
His second measure, SB 2760, takes a different approach by punishing municipalities that try to impose charges by docking the same amount from their Local Government Distributive Fund. In effect, one bill wipes out local authority altogether, while the other creates financial consequences for any city or county that attempts to exercise it.
The Senate Assignment Committee has received both proposals and will decide the next step and assign them to the appropriate standing committee for review.
House bill has bipartisan support
Alongside the Senate proposals, lawmakers in the House have introduced their own measure to rein in local authority over sports betting. House Bill 4171 would amend the Sports Wagering Act to make clear that municipalities cannot regulate, license, or tax the industry.
If passed, the law would take effect immediately, confirming statewide control and cutting off any attempt by cities or counties to impose their own levies.
The bill has quickly gained traction, drawing support from both parties and securing 28 co‑sponsors.
The Sports Betting Alliance, which represents major online gambling operators, filed suit against the city, arguing that Chicago lacked constitutional authority to impose its own levy. While the city later dropped its proposed licensing requirement, leading the SBA to withdraw that part of its case, the complaint over the legality of the tax itself remains active.
Source: Gambling Insider
