Chavdar Vasilev is a journalist covering the casino and sports betting market sectors for CasinoBeats. He joined CasinoBeats in May 2025 and reports on industry-shaping stories across the US and beyond, including legislative debates, market...
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Illinois lawmakers are moving to prevent cities from imposing their own sports betting taxes, just as Chicago prepares to add one. A new bill, HB 4171, filed by Rep. Daniel Didech, would leave all regulation and taxation of sports wagering under the state, denying municipalities “home rule” authority.
“A home rule unit may not impose or collect a tax on sports wagering or a tax on receipts generated from sports wagering.” (HB4171, Section 25-115(b))
The proposal amends Illinois’ Sports Wagering Act. It states that the State of Illinois has the exclusive powers and functions to regulate all licensing, fees, and surcharges related to sports wagering.
Didech has said that the 2019 legalization “was never intended to give local governments authority to create their own rules,” according to multiple reports. That underscores the bill’s goal of keeping sports betting oversight under state control.
HB4171 would take effect immediately upon becoming law. However, with lawmakers adjourned for 2025, it will not be considered until the next session convenes on January 14, 2026
Chicago’s Proposed 10.25% City Tax
HB4171 responds to Chicago Mayor Brandon Johnson’s proposed 10.25% city tax on adjusted gross sports betting revenue. The proposal comes as part of his 2026 budget plan. The tax announced last week would apply to online and retail sportsbooks within city limits.
Johnson’s office estimates the new levy could generate around $26 million annually. However, when combined with existing state taxes, the effective rate for top-grossing operators, like FanDuel and DraftKings, would exceed 50%.
Johnson’s proposal is part of a broader effort to help close a projected $1.15 billion budget deficit. Other ideas include legalizing video gaming terminals (VGTs). That’s a notable shift, as Chicago remains the only principal Illinois municipality that has not embraced VGT since the statewide legalization in 2012.
Illinois Already Raised Sports Betting Taxes Twice
HB 4171 also seeks to reestablish a uniform tax policy after operators faced two significant tax increases since 2024.
Earlier this year, Illinois lawmakers included a new per-wager excise tax—25 cents for the first 20 million bets and 50 cents thereafter – as part of the state’s budget.
Meanwhile, in 2024, the state implemented a progressive tax structure, removing the flat rate of 15%. With the new structure, operators’ levy varies based on their revenue, ranging from 20% to 40% of gross gaming revenue.
The two tax hikes led to operators introducing surcharges and minimum bets to offset costs. FanDuel was the first to act, implementing a 50-cent surcharge on every bet. After a positive investor response, DraftKings followed with an identical charge.
All Illinois sportsbooks have since followed:
- Surcharges: FanDuel, DraftKings ($0.50); Fanatics, Caesars ($0.25); bet365 ($0.25 for bets below $10)
- Minimum Bets: ESPN Bet, BetRivers ($1); Hard Rock Bet ($2); BetMGM ($2.50); Circa ($10)
Critics warn that continued hikes and local add-ons could drive players toward offshore platforms offering lower margins and more favorable odds. However, these platforms are unregulated, offer no player protections, and do not contribute tax revenue to the states.
