Key Moments:
- Five Democratic lawmakers from Illinois have put forward House Bill 4171 to stop municipalities like Chicago from enacting local taxes or fees on sports betting.
- The bill conflicts with Mayor Brandon Johnson’s proposal for a 10.25% local tax on online sports betting revenue, aimed at raising about $26.2 million annually.
- If passed, the legislation would eliminate local taxes on sports betting, including existing levies in Cook County and Chicago.
Legislative Push Against Local Betting Taxes
Five Democratic members of the Illinois House have introduced House Bill 4171 (HB4171), a measure that would prevent Chicago and other municipalities from imposing their own taxes or fees on sports betting. This move directly targets a key element of Mayor Brandon Johnson’s recent budget plan.
HB4171, submitted by Rep. Daniel Didech, chair of the Illinois House Gaming Committee, on Oct. 20, seeks to amend the state’s Sports Wagering Act. The bill would prohibit “home rule units” – including cities and counties such as Chicago and Cook County – from establishing any taxes or charges related to sports betting.
Mayoral Tax Proposal and Legislative Response
Mayor Brandon Johnson had advocated for a 10.25% tax on online sportsbook revenues stemming from wagers placed within Chicago’s borders. City officials have projected that this additional tax could generate $26.2 million each year to address a portion of Chicago’s $1.1 billion budget shortfall while avoiding a property tax increase.
HB4171’s language makes state control over sports wagering explicit: “The regulation and licensing of sports wagering, including, but not limited to, the imposition of fees, surcharges, or other costs for the privilege of conducting or participating in sports wagering, are exclusive powers and functions of the State,” according to the bill.
Rep. Didech stated, “When the legislature legalized sports betting in 2019, it was never our intent to allow local governments to create their own rules for this industry. Chicago’s proposal will hurt consumers, drive vulnerable people to predatory illegal markets, and reduce state tax revenue. The city should work collaboratively with the state to ensure sound, informed policy decisions are made on this issue.”
Broad Support and Potential Effects
Reps. Curtis Tarver, Edgar Gonzalez, Angie Guerrero-Cuellar, and Mike Kelly, all Democrats from the Chicago area, have signed on as co-sponsors of HB4171. “We need to pass this legislation to protect Chicagoans from another tax and prevent an unmanageable patchwork of local regulations,” Kelly remarked.
If carried into law, the bill would eliminate existing local taxes on sports betting, including the 2% tax enacted by Cook County as well as Chicago’s retail sports betting tax.
Statewide Tax Changes and Revenue Implications
Illinois has seen substantial changes to its state-level betting taxes. In 2024, lawmakers replaced the previous 15% flat tax rate with a new tiered system ranging from 20% to 40%, depending on operator revenue, generating over $260 million in additional tax revenue. Governor JB Pritzker’s 2025 budget also includes per-wager surcharges of 25 cents on the first 20 million bets and 50 cents for each subsequent wager.
Local Perspectives and Upcoming Decisions
The Chicago Financial Future Task Force had earlier suggested the city pursue a 50-cent per-wager surcharge on online bets, noting Chicago has been missing out on as much as $17 million annually, as approximately 98% of the bets placed in Chicago occur online without being subjected to local taxes.
The Illinois General Assembly will resume its session on Jan. 14, at which point HB4171 could be debated further.
| Tax or Surcharge | Jurisdiction | Rate or Amount |
|---|---|---|
| Proposed Online Sportsbook Tax | Chicago | 10.25% of revenue |
| Existing Sports Betting Tax | Cook County | 2% of revenue |
| State Betting Tax (2024) | Illinois | 20% – 40% (tiered, by operator revenue) |
| State Per-Wager Surcharge (2025 Budget) | Illinois | 25c (first 20 million wagers), 50c (additional wagers) |
| Suggested Online Wager Surcharge | Chicago* | 50c per online wager |
*As recommended by the Chicago Financial Future Task Force
- Author
Daniel Williams
