The Sports Betting Alliance (SBA) has formally warned Chicago officials that a proposed plan for the online sports betting market could disrupt legal operations, reduce public revenue, and create regulatory confusion if implemented as drafted.
In a letter sent to the office of Mayor Brandon Johnson last week, the industry group urged the city to delay enforcement of its proposed municipal licensing and tax framework, and reconsider the structure entirely.
The correspondence followed a meeting between representatives of the mayor’s office, the Department of Business Affairs and Consumer Protection, and the SBA.
The alliance argued that the city’s proposed budget and revenue ordinance would impose a new city-level licensing requirement on online sports wagering operators beginning this coming January.
Chicago wants to impose a 10.25% tax on online sportsbook revenues, despite the absence of any established city-specific licensing framework tailored to digital wagering businesses.
According to the alliance, the ordinance lacks defined terms, application standards, documentation requirements, and administrative procedures, leaving operators with no practical way to comply upon its effective date.
The group therefore pressed the city to delay implementation by at least 180 days to allow time for rulemaking, application preparation, and license issuance before enforcement begins.
Online sports betting operators are already subject to extensive state oversight in Illinois and cannot legally operate without all required licenses.
The SBA, which hired former American Gaming Association SVP of Strategic Communications Joe Maloney as its new CEO this month, warned that enforcing a city requirement without a functioning application process could force operators to suspend services in Chicago.
Such a shutdown, even temporarily, the group said, would undermine the city’s own revenue goals by pushing consumers toward unregulated platforms that eschew age verification, consumer protection, and responsible gaming safeguards.
The letter also cautioned that a disruption in Chicago could jeopardise potentially tens of millions of dollars in state revenue tied to regulated online wagering.
While requesting delayed implementation, the alliance reiterated its opposition to the ordinance in its current form.
It urges city leaders to work collaboratively with the gaming industry on more durable revenue solutions, including possible amendments to state law that preserve regulatory integrity.
The dispute has drawn attention beyond City Hall, as a group of Illinois lawmakers has publicly condemned the proposal.
They argue that the city’s plan is overly burdensome and could set a precedent for other municipalities to tax not only betting operators but a broad range of goods and services conducted within the state’s largest city.
29 of the state’s 117 legislators signed a letter objecting to the measure.
The opposition comes as Illinois has already increased sports betting taxes twice in two years, moving to a tiered system capped at 40% in 2024 and adding a per-wager tax that took effect this past July.
The SBA claims that the per-bet tax contributed to a 15% year-on-year decline in online wagering in September, a data point it cites as evidence that additional local taxes could exacerbate an already tenuous market environment.
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