Chicago is the first US city to implement its own tax on sports betting operators. Mayor Brandon Johnson did not veto the City Council’s budget measure on Tuesday, which included a 10.25% levy on all sportsbook revenue generated within city limits. This measure will take effect on January 1. The city projects that the tax will rake in $26m each year.
The Sports Betting Alliance. which represents the interests of several major sportsbook operators, claims that some platforms may withdraw as a result of the new tax. It sent a letter to the mayor before he made his final decision, explaining how the lack of “defined terms, application standards, required documentation, and administrative procedures” means that operators have “no meaningful way” to be compliant by January 1.
unclear whether operators will follow through on their threats
The letter called for pushing out the timeline by at least 180 days to give operators time to adjust. It remains unclear whether operators will follow through on their threats, given that January is typically a busy month due to the NFL playoffs.
This comes after the state of Illinois implemented a levy this year on every sports bet placed in the state. It is $0.25 each for the first 20 million wagers per year for an operator, rising to $0.50 thereafter. Lawmakers also upped the gaming tax rate from a flat 15% to a tiered system, which ranges from 20% to 40%.
