Sportsbooks Remain Operational in Chicago, SBA Drops Restraining Order Request
Chicago bettors said goodbye to 2025 and took a deep sigh of relief that sports betting is still operational in the Windy City.
Online sportsbooks remained up-and-running in the second-largest city in the nation on New Year’s Day after a coalition of several sports betting operators dropped an effort to obtain a temporary restraining order to block a new 10.25% city tax, as well as new licensing requirements and sports wagering regulations.
The new tax revenue stream is intended to help fill the city’s $1.2 billion budget deficit.
Chicago Grants Sports Betting Licenses to Major Operators
The Sports Betting Alliance (SBA), a coalition of some of the nation’s major sports betting operators – Bet365, BetMGM, DraftKings, FanDuel, and Fanatics – filed a lawsuit on Tuesday in Cook County that sought an emergency injunction blocking enforcement of the city’s new sports betting regulations.
They claimed that the state of Illinois’ Sports Wagering Act does not give any local government the authority to impose its own taxes on top of the state’s already-implemented sports betting taxes, or to require local licenses to generate revenue from sports betting.
On Tuesday, the five sportsbooks listed above were not licensed to operate in Chicago, according to new regulations. Later that day, all five were issued licenses. That same day, the SBA dropped its request for an emergency temporary restraining order against the city.
The SBA issued an official statement Wednesday on X:
So, the new tax remains in effect, but the SBA lawsuit is still moving forward challenging the new law’s constitutionality, with a hearing scheduled for March on the matter.
Sports Betting Taxes Already Steep in Illinois
The City Council approved Chicago’s 2026 budget plan put forth by Mayor Brandon Johnson earlier last month that would implement an additional 10.25% tax on all sports wagers placed within the city limits and approved a new requirement for annual licensing fees between $5,000 and $50,000 for each sports betting operator.
Operators already pay 20-40% in Illinois state taxes, plus a per-wager fee of 25 cents on the first 20 million wagers placed and 50 cents on each sports bet placed after that. Illinois is the only state to levy a per-wager tax, and it’s total sports betting tax rate is among the highest in the nation.
The SBA lawsuit claims that only the state government, not each local jurisdiction, can implement new taxes, licensing requirements and regulations.
In October, there was legislation introduced in the State House in Springfield that would prohibit local governments from regulation, implementing, licensing, or taxing sports wagering, but that has not come up for a vote to date.
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