A plan for the city of Chicago to collect a 50-cent tax on every online sports bet placed within its limits was floated during a recent finance subcommittee meeting.
The city tax would be in addition to the per-wager tax imposed by the Illinois state legislature earlier this year.
Under the unprecedented state tax, as of July 1, sportsbooks pay 25 cents per bet on the first 20 million wagers they write, and 50 cents on wagers placed after that.
It’s an idea worth considering at the city level, too, city officials believe.
“What we looked at is what if the city extends a similar 50 cents per wager for all the wagers placed in Chicago,” Noor Shaikh, Deputy CFO for the City of Chicago, said on July 21, near the end of a three-and-a-half meeting of the finance committee’s Subcommittee on Revenue. “We are estimating that this can raise anywhere from $40-41 million over the next three years.”
Earlier in the meeting, City of Chicago CFO Jill Jaworski said she saw no legal reason why the city couldn’t levy such a tax on sportsbook.
Current Chicago city tax on retail sports betting doesn’t amount to much
While Chicago already taxes sports bets made at retail establishments within city limits, the only brick-and-mortar sportsbook that qualifies is the DraftKings-operated one at Wrigley Field.
The ordinance put just $20,500 into city coffers in 2024, the first full year Chicago collected the tax, Shaikh said.
That doesn’t do much toward the $1.1 billion budget gap the city is trying to close next year.
More expense passed along to sports bettors?
Today on Rush Street Interactive’s Q2 earnings call, CFO Kyle Sauers indicated that in response to Illinois’ new per-wager tax, BetRivers is implementing a minimum bet of $1 in the state.
This makes BetRivers the sixth sportsbook so far where Illinois players are feeling the impact of the new tax.
Customers at BetMGM ($2.50) and Hard Rock ($2) also now face minimum wagers if they want to bet.
DraftKings and FanDuel, which are most impacted by the new tax because of the 20-million bet threshold, are slapping a 50-cent fee on each wager, beginning Sept. 1, and Fanatics is adding a 25-cent fee on bets.
The city sports betting tax floated in Chicago looks like a longshot, but if it is ever enacted, players will likely bear some of the burden.
