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Alright, lawmakers in Illinois are just getting greedy now. No state with a legal sports betting market has aggressively taxed it quite like Illinois. But… they might not be done yet.
Even after raising the sports betting tax from a flat rate of 15 percent to a sliding scale of 20 to 40 percent (depending on an operator’s total revenue). Even after implementing a 20- to 50-cent surcharge on every single sports wager made. Yes, Illinois discussed another way to tax the industry.
You’re going to want to keep reading cause this story even shocked us. Shocked because Illinois sports betting sees no end toward extracting from its relatively-new industry.
Chicago Could Get Special Betting Tax
Ready for this wild idea from the Chicago City Council? During a revenue subcommittee meeting in late July, Deputy CFO Noor Shaikh floated the idea of tacking on another per-bet tax — this time, specifically for online wagers made inside Chicago. It would be 50 cents on every online bet made inside city limits.
That would mean Chicago-bettors could be on the hook for a 75-cent tax on every wager made via sports betting apps. After a certain limit is hit, it would increase to a whole $1. Considering Chicago is one of the biggest city’s in the country, the math works out to around $40 million in new revenue each of the next three years.
But…. this is only an idea. For now, at least. No formal proposal was made, it was just a passing comment by the CFO. But that’s the thing, that’s not a small position. You have to assume lawmakers have discussed it behind closed doors before. The exact comment went like this:
“What we looked at is what if the city extends a similar 50-cent per wager for all the [online] wagers placed in Chicago,” Shaikh said. “And we are estimating that this could raise anywhere from $40 million to $41 million over the next three years.”
As Shaikh explained it, Chicago wants a piece of the sports betting pie, that’s being eaten up by the state. The city gets a 2 percent cut off wagers made at the iconic Wrigley Field, however, that’s a nothingburger. In 2024, it was a meager $20,500 in revenue — which tells you how little people are betting in-person versus on mobile.
If this new surcharge ever becomes reality, projections show $40 million in 2026, $40.6 million in 2027, and $41.2 million in 2028. In the grand scheme, it’s still a drop in the bucket for Chicago. For reference, the city runs a $17.1 billion budget and is staring down a $982 million deficit. But for bettors? It’s yet another hand in their pockets after the state already hiked fees this year. At a certain point, it just feels like extraction (it is, as we explain next).
Cook County Already Gets Paid
Just how much of Illinois’ sports bets originate from Chicago though? In 2024, there were 366.1 million online sports bets made statewide — a staggering 99% of the total volume. City estimates suggest 80 million of those wagers came from inside Chicago. That’s more than one-fifth of all wagers placed across Illinois.
Here’s the kicker: Cook County, which is where Chicago fits into, is already gets a slice of sports betting money under Illinois law. The Sports Wagering Act says any county with more than 3 million people gets a 2% cut of adjusted gross receipts from bets placed inside its borders. As the most populous county in the state, Cook County certainly qualifies.
For fiscal 2025, Cook County is expected to haul in $12.45 million from this tax. After factoring in early returns from December through April, the projection got bumped up to almost $13.6 million. Next year, the county is penciling in $11.2 million from the same tax. Again, it’s not a lot, but it is something, contrary to Shaikh’s thesis or Chicago not benefiting somehow.
So when city officials talk about squeezing more revenue out of sports betting, keep in mind: Cook County is already cashing in. The idea of layering another tax on top is why we’re calling them greedy.
Sportsbooks Are Marching On
This new 50-cent tax — the one that’s official, not the Chicago-based idea — will really kick into gear the rest of the year. That’s because NFL betting is where Illinois makes the bulk of its sports betting money from.
We fully expect bettors to set new Illinois betting records during these next few months. Right now, the record was set in November 2024. That month, in-state bettors wagered a whopping $1.53 billion. Sports betting operators kept $154.6 million of that to themselves after laying out winners.
So far, DraftKings and FanDuel have fought back, adding their own surcharge to bets made — to offset the tax. In a recent earnings call, FanDuel will lose out on an extra $5 million this year in Illinois because of the changes (it would’ve been $30 million if not for including their own tax).
So it is what it is — the lawmakers, sportsbook operators, and bettors will march on, taxes be damned. But after a certain point, you can’t help but just feel icky about bettors getting stuck in the middle of a tax war. We hope it doesn’t drag out any further than this, but who knows at this point.
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