After the Chicago City Council passed a budget plan to raise the sports betting tax by 10.25% in 2026, the Sports Betting Alliance (SBA) filed a lawsuit to stop the...
Chicago to raise sports betting tax by 10.25% in 2026
The Chicago City Council has passed the city’s 2026 budget plan, which will include a 10.25% tax on gambling revenue and is expected to take effect on January 1, 2026.
On December 23, 2025, Mayor Brandon Johnson confirmed he would neither sign nor veto the bill, allowing it to naturally become law under city rules.
The state of Illinois already has a complex tax framework and operates under a progressive tax system on sports betting revenue, with rates ranging between 20% and 40%.
When the 10.25% tax is added, the minimum rate on Chicago-based operators will become 32.25%. For operators that cross the $200 million revenue threshold, the tax could be over 50%. For instance, DraftKings and FanDuel are expected to reach the threshold and increase taxes to at least 52.25%.
The new law also targets operator licensing, as the bill mentions that businesses or individuals accepting bets must hold a city-level license.
Government officials project that around $26.3 million will be generated annually in tax revenue, assuming that Chicago accounts for 40% of sportsbook revenue generated in Cook County. The new budget plan also anticipates that an additional $6.8 million in revenue will be collected after video gaming terminals are legalized.
State lawmakers have urged Chicago officials to override Mayor Brandon Johnson’s proposed 10.25% city tax on online wagers, with concerns that bettors will turn to offshore,...
