Chicago officials are studying a plan to add a 50-cent tax to every online sports bet placed inside city limits. The idea comes from a city task force trying to close a projected $1.1 billion budget gap for 2026.
The new charge would be in addition to Illinois’s statewide per-bet tax that began in July, and supporters say it could raise about $17 million a year. The proposal has not been approved, and debate is already heating up among sportsbooks, bettors, and city leaders.
What’s Being Proposed — and Why
A city advisory group called the Chicago Financial Future Task Force recommended that Chicago “consider a $0.50 tax on all online sports wagers” made within the city. Their reasoning is simple: almost 98% of bets in Chicago happen online, which the city does not currently tax, while it already collects a small local tax on bets made at physical sportsbooks.
By charging a flat fee per online bet, the task force estimates the city could bring in $17 million annually, even after assuming some bettors might step outside the city to place wagers.
This city discussion follows a major change at the state level. Since July, Illinois mobile sportsbooks are charged a per-bet fee — $0.25 on the first 20 million bets each year and $0.50 on bets after that.
Operators say many have passed some of those costs to customers through small transaction fees or new minimum bet sizes. If Chicago adds its own per-bet tax on top of the state’s, residents could see two layers of costs tied to every wager, which is why the plan is drawing close attention from the industry and consumer advocates.
Importantly, this is still only a recommendation. The City Council would need to draft and approve an ordinance, and details like start date, enforcement, and whether the fee would apply to in-person kiosks or only mobile apps would need to be clarified.
For now, it’s an idea on paper meant to help stabilize city finances without cutting services or raising broader taxes.
What It Could Mean for Bettors and Sportsbooks
Industry groups, led by the Sports Betting Alliance, argue that a city per-bet tax could make small wagers more expensive and push some customers toward unregulated sites. They note that more than half of Illinois wagers are $5 or less.
On a $1 bet, a $0.50 city fee (plus any operator fee tied to the state charge) would be a large share of the ticket. The alliance also warns that piling costs on tiny wagers could nudge casual fans off legal platforms — where there are ID checks and consumer protections — and toward illegal markets that don’t provide any safeguards.
Supporters counter that the city needs stable revenue and that per-bet fees are predictable. They also point to July data from the Illinois Gaming Board, which shows the state’s new per-bet tax generated more than $5 million in additional revenue in its first month.
For a city trying to close a big gap, the task force believes a local per-bet fee for Chicago sports betting could be a targeted way to capture dollars from a fast-growing industry without raising broad sales or property taxes.
What happens next? Expect more lobbying at City Hall, public comments from operators, and questions about how the fee would work across different apps and geolocation boundaries. Chicago has not set a vote or timeline, and city leaders will have to weigh budget needs against the risk of higher costs for small bettors.
If the idea advances to an ordinance, we’ll likely see clearer answers on when the tax could start, how it would be collected, and whether there will be any exemptions or caps.
