Chicago Online Sports Betting Continues Into 2026

Online sports betting in Chicago continued as usual when the clock ticked over to 2026 after receiving city-level licenses before the deadline.

New Budget Adds Tax And City Licensing Requirements

The new Chicago budget, which went into effect Thursday, made two changes for accepting bets within the city limits: a 10.25% tax on adjusted revenue and city-level licenses.

The Sports Betting Alliance sued the city over the new rules since Chicago-specific sports betting licenses did not exist when the budget was passed. Operating without all required licenses would put its members’ licenses at risk in other states and jurisdictions, the SBA said.

SBA Lawsuit And Temporary Restraining Order Withdrawn

The SBA withdrew its request for a temporary restraining order after the city rolled out its licenses on Tuesday. That meant all SBA members – bet365, BetMGM, DraftKings, Fanatics and FanDuel – continued booking bets without disruption.

“We’re pleased to see the city moved quickly yesterday to maintain the operations of legal platforms that provide customer protections not available in the illegal market,” the SBA said in a statement. “Given these developments, there was no longer any need for an expedited TRO. The SBA will nevertheless continue to pursue in court resolution of the invalidity and unconstitutionality of the City’s recently passed license and tax ordinances.”

Chicago Sports Betting Tax Faces Legislative Pushback

Along with the lawsuit, there are pieces of legislation awaiting the 2026 legislative session that could change impact that 10.25% tax.

One bill, HB 4171, would change the sports betting law to make it clear only the state can tax sports betting and not local municipalities.

“When the legislature legalized sports betting in 2019, it was never our intent to allow local governments to create their own rules for this industry,” said author Rep. Dan Didech. “Chicago’s proposal will hurt consumers, drive vulnerable people to predatory illegal markets, and reduce state tax revenue. The city should work collaboratively with the state to ensure sound, informed policy decisions are made on this issue.”

Second Bill Would Offset Chicago’s Tax Revenue

Sen. Patrick Joyce, meanwhile, intends to file a bill that would reduce Chicago’s share of funds from the State Revenue Sharing Act by whatever the sports betting tax brought in.

Here’s an excerpt from the draft:

“Notwithstanding any other provision of law, if a municipality imposes fees, surcharges, or other costs for the privilege of conducting or participating in sports wagering, then the total amount of those fees, surcharges, or other costs shall be deducted from that municipality’s allocation under this subsection and redistributed to the other municipalities and counties in this State in accordance with the allocation formula set forth in this subsection (a).”

Illinois’ legislative session begins Jan. 14.