Chicago Sports Betting Tax Faces Growing Opposition

Chicago officials are debating a proposed city tax on sports betting, a measure aimed at raising new revenue amid ongoing budget pressures. The proposal has drawn criticism from Alderman Gilbert Villegas, who argues that additional taxation could negatively impact legal wagering activity, causing potential legal and economic challenges.

Villegas Highlights Risk With Chicago Tax

Villegas, who is also the chairman of Chicago’s Economic, Capital, and Development Committee, has publicly opposed the proposed sports betting tax in a recent opinion piece published in the Chicago Tribune.

He argues that the city’s proposal comes at a time when Illinois has already increased sports betting taxes twice within the past year, including the introduction of a per-wager tax of 25 or 50 cents earlier this year.

According to Villegas, those state-level tax increases have coincided with a decline in sports betting activity, raising concerns that an additional municipal tax could further discourage bettors from using regulated Illinois sportsbooks. He warns that such a move could push wagering activity toward other states or unregulated alternatives, ultimately undermining the city’s revenue goals while putting player safety at risk.

Villegas has also raised legal concerns, suggesting the proposed tax could be challenged in court by bettors and potentially ruled invalid. He points to a prior precedent in which the Illinois Supreme Court struck down a Chicago tax imposed on users of StubHub, arguing that a similar outcome could occur if the city proceeds with a sports betting levy.

Criticism From Villegas Follows SBA Pushback

Industry opposition to the proposed Chicago sports betting tax extends beyond Alderman Villegas’ objections. The Sports Betting Alliance (SBA), a group representing major sportsbook operators, has also warned that a city-level tax could disrupt the regulated market.

The SBA argues that without a clear regulatory framework for mobile sports betting under the proposed tax, some online sportsbooks might find it unfeasible to continue operating in Chicago. This could push bettors toward offshore alternatives that lack consumer protections.

Pushback Could Influence Policy Decisions

While opposition from Villegas and the SBA has added momentum to the debate, it remains unclear whether the pushback will ultimately alter Chicago’s approach to a sports betting tax. The proposal is still being weighed against the city’s broader budget needs. Any changes would require agreement among members of the Chicago City Council as well as alignment with state-level regulations.

Supporters of the tax argue that new revenue sources, such as this additional Chicago sports betting tax, are necessary to address fiscal pressures.

As discussions continue, the effectiveness of the opposition will likely depend on whether lawmakers view the warnings about reduced betting activity and market disruption as outweighing the potential revenue benefits.

What’s Next for Chicago Sports Betting Tax

City officials are expected to continue reviewing the proposed sports betting tax as part of broader budget negotiations, with additional hearings and committee discussions likely in the coming weeks.

Continued input from aldermen, industry groups, and other stakeholders could shape revisions to the proposal or influence whether it moves forward at all.