Chicago is weighing a $16.6 billion city budget, and one part of it is catching the eye of the sports betting world.
The proposal would shake up how sports wagering is taxed inside city limits. Chicago is planning to significantly raise the tax on revenue generated from sports bets placed in the city. That potential increase has already sparked interest and concern among betting operators and industry groups watching closely to see how it could affect business in the Windy City.
The ordinance states: “There is hereby imposed a tax on each primary sports licensee operating in the City. The rate of the tax shall be 10.25% of the adjusted gross sports wagering receipts from sports wagers that are placed within the City.” The tax would apply both to wagers placed at approved physical locations and to bets made “over the internet or through a mobile application” when verified as having been placed within Chicago.
Chicago mayor is tight-lipped on the city’s sports betting tax
Mayor Brandon Johnson, a Democrat, has said he won’t sign or veto the budget, which means it would take effect without his formal approval. City officials say the higher sports wagering tax is meant to bring in new revenue, with the administration estimating it would generate at least $26 million a year.
If the measure moves forward, the city tax would sit on top of existing state and local taxes. Based on city estimates, that would push the total tax rate on sports betting revenue generated in Chicago to 32.25%.
Industry groups are already raising red flags. Representatives for sportsbooks warn that a higher tax rate could make Chicago a tougher place to do business, potentially leading some operators to cut back or leave altogether. They also argue it could drive bettors toward unregulated or illegal betting options instead.
In a letter, the Sports Betting Alliance warns that “the proposed budget and revenue ordinance would impose a City licensing requirement effective January 1, 2026, yet the City does not currently have a licensing rubric that contemplates online sports wagering operators.” The alliance argues that without “defined terms, application standards, required documentation, and administrative procedures,” operators would have “no meaningful way to comply with the ordinance upon its effective date.”
The group is urging the city to delay implementation by at least 180 days, cautioning that a temporary shutdown of legal online sports betting in Chicago could undermine the city’s revenue goals and “drive consumers to online platforms that dodge laws that ensure consumer protection, age verification, and responsible gaming protections.”
Chicago’s proposed sports betting tax is budgetary smoke and mirrors that risks undermining a legal market that protects bettors — and could leave the city with nothing to show for it. https://t.co/CGU0aXOpU1
— Sports Betting Alliance (@SBAllianceUS) December 16, 2025
The Sports Betting Alliance also wrote on X: “Chicago’s proposed sports betting tax is budgetary smoke and mirrors that risks undermining a legal market that protects bettors — and could leave the city with nothing to show for it.”
The sports betting provision is just one of several tax and fee changes folded into the budget ordinance, which stretches across dozens of chapters of the municipal code. City council members are expected to weigh the potential revenue boost against concerns about how the change could affect the legal sports wagering market in the nation’s third-largest city.
Featured image: Canva
