Chicago Considers Online Sports Betting Tax in Brandon Johnson 2026 Budget

Chicago Mayor Brandon Johnson has introduced a new budget plan that includes a proposal to tax online sports betting activity within the city. The 10.25% Online Sports Wagering Tax would apply to “any licensee engaged in the business of sports wagering in the City,” according to the proposal submitted to the City Council on Thursday.

Good to Know

• The proposed tax targets online sportsbooks operating in Chicago.
• Officials estimate it would generate around $26.2 million in 2026.
• The new rate adds to already rising taxes for Illinois sportsbook operators.

The measure is part of Johnson’s broader $16.6-billion city budget for 2026, which aims to balance growing costs with new revenue streams. City officials expect the betting tax to raise $26.2 million, though that amount represents only a small fraction of the overall budget.

A budget overview from Johnson’s office said the tax would draw from “an industry that has grown rapidly, with over $48 billion wagered nationwide in the past five years.” The statement added that “the measure ensures this expanding sector contributes to the City’s shared priorities.”

While the tax still needs approval from the City Council, its inclusion in the mayor’s proposal already has the gambling industry on edge. Illinois operators have been grappling with higher state-level taxes and a per-bet fee that went into effect earlier this year, increasing operational costs across the market.

For Chicago sportsbooks, a city-specific tax would represent another financial hit layered on top of those state charges. Many operators are expected to push back strongly during the budget debate, warning that higher costs could drive bettors to offshore platforms or other states.

From the bettor’s perspective, the impact is already being felt. To offset recent tax hikes, sportsbooks have introduced transaction fees, minimum bet requirements, and tighter promotional offers.

The Sports Betting Alliance (SBA)—which represents major operators like FanDuel, DraftKings, BetMGM, and Fanatics—has been vocal about the strain of Illinois’ tax policies. In September, the group warned city leaders against new per-bet proposals from a Chicago task force.

Now, with Johnson’s 10.25% tax proposal, the Alliance may again sound alarms. “Unregulated, offshore operators offer cheaper sports betting alternatives for consumers, without any protections—including age verification—and without any oversight, not to mention no tax revenue whatsoever,” the SBA said earlier this year.

Industry watchers say the plan underscores a growing tension between municipal budget goals and a gaming industry already stretched by multiple tax layers. If the measure passes, Chicago would become one of the few U.S. cities to directly tax online sports betting revenue within its borders.

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