Chicago's 2026 budget proposes a 10.25% city tax on sports betting, yet fails to clarify the application standards for online operators' city licenses. The Sports Betting Alliance warns that if there is no compliant path by January 1, when the policy takes effect, operators like DraftKings and FanDuel may suspend their Chicago operations. Cases of local gambling tax disputes in the US can be queried through the PASA official website.
Tax Overlap: Operators' Minimum Tax Burden Exceeds 32%
This tax burden really adds up! In addition to the proposed 10.25% city tax, Illinois has a progressive state tax of 20%-40%, Cook County levies an additional 2% tax, plus a per-bet surcharge of 25-50 cents implemented from July, bringing the minimum tax burden for operators to 32.25%. FanDuel and DraftKings, having processed over 20 million bets, have started paying a high surcharge of 50 cents per bet.
License Loophole: Compliance Difficult Without Standards
How to comply without clear standards! The budget bill requires operators to hold a Chicago city license from January 1, but currently there is no application process or required materials detailed. The Sports Betting Alliance points out that operators cannot legally operate without rules, calling for a 180-day delay in enforcement until the city establishes a licensing framework, and suggests removing this tax item to negotiate a long-term solution with the industry.
State Opposition: Legislation Aims to Block Local Taxation
The state doesn't even approve of this! In October, State Representative Daniel Didech proposed a bill to prohibit local gambling taxation or fees; Senator Patrick Joyce also submitted a bill proposing to cut the corresponding local funding for Chicago. Moreover, although the City Council's Finance Committee has advanced an alternative budget including this tax item, the mayor has yet to state whether he will veto it. If the budget is not passed by the end of the year, it could lead to a government shutdown.
Market Impact: Betting Volume Has Already Declined
The pressure of tax burden has already shown! In September, Illinois saw a decrease of 5 million bets compared to the same period last year, with some operators passing on costs by raising the minimum bet amount. The Alliance also worries that compliance issues in Chicago could affect operators' license credibility in other states, potentially triggering a chain risk.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel:https://t.me/pasa_news
Original in-depth gambling channel:https://t.me/gamblingdeep
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PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
