Chicago Betting Plan Faces Industry Warnings Over Disruption

The Sports Betting Alliance has cautioned Chicago officials that a proposed municipal licensing and tax framework for online sports betting could disrupt legal operations and undermine public revenue. In a letter sent to the office of Mayor Brandon Johnson, the industry group urged the city to delay enforcement and reconsider the structure of the ordinance.

The proposal would require online sportsbook operators to obtain a city-level licence beginning in January, alongside a 10.25% tax on online betting revenue. According to the alliance, the ordinance lacks defined terms, application standards, and administrative procedures, leaving operators with no practical path to compliance.

The group has requested a minimum 180-day delay to allow time for rulemaking and licence issuance. It warned that enforcing the ordinance without a functioning application process could force licensed operators to suspend services within Chicago. Such a move, it argued, would contradict the city’s revenue objectives by pushing players toward unregulated platforms lacking consumer protections.

Operators are already subject to extensive state oversight in Illinois and cannot legally operate without full regulatory approval. The alliance also cautioned that a market disruption in Chicago could jeopardise tens of millions of dollars in state-level sports betting revenue.

Opposition to the proposal has extended beyond industry groups. Twenty-nine Illinois legislators have signed a letter condemning the plan, arguing it is overly burdensome and could set a precedent for municipal taxation of digital services.

The dispute comes amid rising tax pressure on Illinois sportsbooks, including a tiered state tax capped at 40% and a per-wager levy introduced earlier this year. The alliance cited data showing a 15% year-on-year decline in online wagering in September, warning that additional local taxes could further weaken the regulated market.