Illinois House Committee Approves Bill To Disallow New City Sports Betting Tax

• The Illinois House Gaming Committee approved HB 4171 by a unanimous vote
• The bill prohibits anyone but state legislators the power to regulate, license, or tax sports betting in Illinois
• The legislation is largely in response to the City of Chicago instituting a 10.25% tax rate on sports betting

---

The Illinois House Gaming Committee took a big step forward this week to limiting the regulation, licensing, and taxation of sports betting in Illinois to only state legislators.

The Illinois House Gaming Committee unanimously approved Rep. Daniel Didech’s (D-59) bill, HB 4171, by a 15-0 vote. The legislation aims to prohibit anyone but state legislators the power to regulate, license, or tax sports betting in Illinois.

The proposed legislation came in direct response to a newly instituted 10.25% Chicago sports betting tax rate on Jan. 1, 2026.

Sports Betting Taxation For State Legislators Only

Didech’s bill aims to affirm that regulation of the Illinois sports betting industry remains the sole responsibility of the state. Didech is the Chair of the House Gaming Committee.

His bill prohibits the newly instituted Chicago sports betting tax rate. Under his legislation, a “home rule unit” such as the City of Chicago “may not impose or collect a tax on sports wagering or a tax on receipts generated from sports wagering.”

The Sports Betting Alliance applauded the vote, noting that its ultimate passage will “result in more sports fans playing in the legal, regulated market and fewer seeking out illegal websites and bookies to play.”

The bill will now head to the House floor for potential consideration.

Several New Illinois Sports Betting Taxes, Fees

Over the last two years, Illinois has made several significant changes to to the state’s sports betting industry.

Gov. JB Pritzker (D) approved a budget earlier this year that included a new per-bet fee for all licensed online sports betting operators. The per-bet fee went into effect on July 1, 2025, and resulted in more than $5.2 million in revenue during its first month of operation.

Since the implementation of the new per-bet fees, the Sports Betting Alliance noted that total bets in the state dropped in three consecutive months from September to November 2025.

“The data is a warning sign that Illinois’ patchwork of regulations has direct consequences to the state’s revenues as well as the public policy goals of responsible gaming,” the SBA said in a statement. “In the face of high taxes, players are migrating to illegal betting sites and bookies that are cheaper to play, operating without any regulation or consumer protections in place, and bringing in zero tax revenue to the state.”

In 2024, Pritzker signed a budget into law on June 1, 2024, which included a new progressive tax rate for licensed state sportsbooks. The state budget included the first-ever progressive tax rate for sports betting operators in the country, which will see sportsbooks pay a rate of 20% to 40% based on adjusted gross revenues.

Based on the structure, operators pay taxes based on the following adjusted gross sports betting revenue totals:

$0 to $30 million: 20%

$30 million to $50 million: 25%

$50 million to $100 million: 30%

$100 million to $200 million: 35%

Over $200 million: 40%