Licensed sports betting operators in Illinois have a new tax to contend with under Chicago’s 2026 Budget.
After Chicago Mayor Brandon Johnson confirmed on Tuesday that he will neither sign nor veto the city’s 2026 Budget, licensed sports betting operators will have to pay 10.25 per cent of their adjusted gross revenue to the city effective January 1.
The new betting tax applies to all wagers placed in the city with licensed operators and is expected to bring in $26.2 million in 2026.
The new city tax comes six months after Illinois adopted a new state-wide wagering tax in the 2026 State Budget. This charges licensed operators $0.25 on each wager at the base level and rises to $0.50 on each wager for operators with more than 20 million bets annually.
Licensed sports betting operators in Illinois also pay tax based on their adjusted gross receipts, with this tax rate ranging from 20 to 40 per cent.
As with the additional state wagering tax that came into force on 1 July, operators are likely to pass the cost of the new city tax onto consumers, further weakening the legal market versus illegal offshore operators.
Chicago’s 2026 Budget also forecasts $6.8 million in new tax revenue from video gaming terminals (VGTs) under a proposal to legalize the machines in the city for the first time.
The rollout of VGTs in Chicago would have a negative impact on Bally’s Corporation’s upcoming casino in the city, Bally’s Chicago, which is set to open in the second half of 2026.