Illinois Representative Daniel Didech has proposed Bill HB4171, aimed at prohibiting local governments from taxing sports betting, directly targeting Chicago Mayor Brandon Johnson's tax increase plan. Johnson proposed a 10.25% local sports betting tax in the 2026 budget, but the new bill would consolidate state government's exclusive regulatory authority, prohibiting local taxation. Didech stated that when sports betting was legalized in 2019, local authorities were not authorized to set rules, and the Chicago proposal could harm consumers, drive them to the illegal market, and reduce state tax revenue. Several Chicago representatives co-signed in support of the bill, and the state legislature will deliberate on January 14. Illinois has significantly increased sports betting taxes in recent years, changing to a tiered tax rate of 20-40% in 2024 and adding a per-bet surcharge.
Bill Introduction and Core Content
Chairman of the Illinois House Gaming Committee, Daniel Didech, introduced Bill HB4171, aimed at prohibiting cities and counties from taxing sports betting, consolidating state government's exclusive regulatory authority. The bill directly responds to the Chicago Mayor's plan to impose local gambling taxes, aiming to maintain statewide unified supervision.
The proposal notes that the measure aims to prevent policies that could harm consumer interests and disrupt regulatory consistency.
Chicago's Original Tax Increase Plan
Chicago Mayor Brandon Johnson proposed a 10.25% local tax on sports betting in the 2026 budget, which would be in addition to the existing state tax rate of 20% or higher. The plan aims to increase local revenue but has been opposed by state legislators.
The Mayor's office has not immediately commented on the state legislative action, and intense debate is expected.
Legislators' Opposition Reasons
Didech stated that when sports betting was legalized in 2019, it was never intended to allow local governments to set their own industry rules. He believes the Chicago proposal would harm consumers, push vulnerable groups towards the illegal market, and reduce state tax revenue.
He emphasized that Chicago should cooperate with the state government to ensure reasonable and wise policy decisions.
Supporting Forces and Co-sponsors
Several representatives from Chicago, including Representatives Curtis Tarver, Edgar Gonzalez, Angie Guerrero-Cuellar, and Mike Kelly, have signed in support of the bill. Kelly stated that legislation is needed to protect residents from the impact of new taxes and prevent difficult-to-manage local regulations.
Joint support shows significant internal disagreement in Chicago regarding the Mayor's plan.
Illinois Tax Status
In recent years, Illinois has significantly increased sports betting taxes, changing the tax rate from 15% to a tiered system of 20-40% in 2024, based on operator revenue. This tax increase has brought the state government more than $260 million in additional revenue.
The 2025 budget of Governor JB Pritzker also includes a per-bet surcharge on operators, further increasing the tax burden.
Additional Charges and Operator Responses
Illinois imposes a new per-bet surcharge on sports betting operators, charging 25 cents per bet for the first 20 million bets and 50 cents per bet thereafter. In 2024, the state's total betting volume reached 370 million, with DraftKings and FanDuel each exceeding 150 million in betting volume.
To alleviate the burden, 10 operators have adopted measures such as charging a per-bet fee and setting minimum bet amounts.
Bill Progress and Timeline
The state legislature will reconvene on January 14 to deliberate on Bill HB4171. If passed, the bill will take immediate effect, prohibiting all local governments from taxing sports betting, including Chicago's plan.
The deliberation process may spark intense debate, especially regarding the balance between local autonomy and state unity.
Potential Impact and Controversial Focus
The bill has sparked controversy over state rights and local autonomy, with supporters emphasizing the importance of unified regulation, while opponents question the state government's excessive interference in local financial rights. Consumer rights groups are concerned about the impact of increased taxes on betting costs.
The focus of the controversy is on how to balance state-level regulatory consistency with local financial needs.
Historical Background and Legislative Intent
When sports betting was legalized in 2019, legislators explicitly centralized regulatory authority at the state level. The new bill reaffirms this principle, preventing fragmented local tax policies from affecting market stability and development.
The legislative intent is to maintain a unified regulatory framework and tax policy across the state.
Next Steps and Possible Outcomes
The bill will be submitted to the House Gaming Committee for deliberation, and if passed, it will be sent to the full House for a vote. If approved, it will be sent to the Senate for deliberation and the Governor's signature. The Chicago city government may seek a compromise solution or legal challenge.
The final outcome will affect Illinois' gambling regulatory landscape and local government financial policies.
