Illinois lawmakers urge Chicago to drop online sports betting tax plan

A group of 30 Illinois House Democrats has called on the Chicago City Council to scrap Mayor Brandon Johnson’s proposal to apply the city’s 10.25% amusement tax to online sports bets, warning the measure could push gambling underground and jeopardize state revenues.

In a letter sent Thursday to all 50 alderpersons, the lawmakers said the city’s plan risked prompting more than 200 municipalities to impose their own local taxes on internet wagers, amplifying the financial hit to the state. They argued that making legal betting more expensive would drive gamblers to offshore websites that are “more dangerous, more predatory, untaxed and unregulated.”

“If you increase the tax so it becomes cost-prohibitive for gamblers, they will seek out overseas sites… That’s a direct loss in tax revenue for the state,” said Representative Dan Didech, chair of the House Gaming Committee, as reported by the Chicago Sun Times.

“A lot of these places require you to transfer your money to Bitcoin and cryptocurrency. Sometimes, winners get paid out. Sometimes they don’t. Money is not kept in segregated players’ accounts. It’s a much more predatory environment for players,” he said. 

The pushback comes as Johnson’s 2026 budget already faces strain. The City Council’s Finance Committee rejected his proposed corporate head tax, blowing a $100 million hole in the plan. If alderpersons also kill the online wagering tax, the budget gap would widen by another $26 million.

State lawmakers argued that Chicago’s proposal could backfire not only financially but politically. Representative Curtis Tarver, who chairs the House Revenue Committee, noted the state has “already taxed sports betting to the hilt,” raising rates twice in two years - first from a flat 15% to a tiered system of up to 40%, then by taxing each bet. A city-level tax, he said, could escalate tensions and spur efforts to “claw back” the city’s home-rule authority.

The Democrats’ letter criticized what it described as an ongoing “communication gap” between Chicago and Springfield, calling the sports betting proposal a “missed opportunity for collaboration.” It said the city advanced the idea “without meaningful consultation or early dialogue,” leaving even Chicago-based legislators with “no choice but to oppose the measure.”

Tarver said the friction reflects broader issues with Johnson’s legislative strategy and communication, pointing to his appointment of former Alderman John Arena as chief lobbyist. “He seems to alienate everybody he comes into contact with… the more you’re around him, the less you want to be around him,” Tarver said.

Several alderpersons echoed the concerns. Alderman Matt O’Shea said the letter was “another example of this administration’s failure to have a relationship and an open line of communication with Springfield,” adding: “There is no relationship.” Alderman Gilbert Villegas said Chicago had already missed its chance to secure a portion of the state’s sports betting tax, urging closer cooperation with lawmakers to ensure the city “doesn’t get screwed later on.”