- Online ticket counts fell 15 percent last October and wagers dropped 25 percent in February, the first sustained slide since Illinois launched betting in 2020
- Every online bet in Chicago now carries three taxes at once: a state rate scaling up to 40 percent, a 25 to 50 cent per-wager fee, and a new 10.25 percent city levy
- HB 5143, the bill to kill the per-wager fee, missed the House crossover deadline and is dead for 2026, so the full stack stays in place
- FanDuel added a 50-cent surcharge then paused it in April, while DraftKings spares larger parlays, bigger single bets and bonus bets
SPRINGFIELD – Three separate taxes now apply to every online sports wager placed in Chicago as of Jan. 1, 2026, an unprecedented layering of state, per-wager, and municipal levies that has reshaped how operators price their products and how often Illinois bettors place wagers. House Bill 5143, which would have repealed the per-wager portion of the stack effective July 1, 2026, missed the Illinois House crossover deadline of April 17 and is functionally dead for the 2026 session.
The first layer arrived in mid-2024 when Illinois swapped its flat 15 percent tax on online sportsbook gross gaming revenue for a graduated structure that scales with operator size. Under the current framework, the first $30 million in annual adjusted gross receipts is taxed at 20 percent, with the rate climbing through brackets at 25, 30, and 35 percent before reaching 40 percent on receipts above $200 million. The largest two operators have spent most of FY 2026 in the top two brackets. FanDuel reached the 35 percent bracket after its FY 2026 AGR cleared $100 million; DraftKings finished September 2025 within $193,000 of the same threshold per Illinois Gaming Board filings, and both operators projected hitting the 40 percent top bracket by the end of December.
The second layer, the per-wager fee, took effect July 1, 2025. Sports wagering licensees pay 25 cents on each of the first 20 million Tier 1 and Tier 2 wagers processed in a fiscal year and 50 cents on each wager beyond that threshold, per operator. DraftKings and FanDuel each cleared the 20 million threshold within the first quarter of FY 2026, meaning every additional bet since then has carried the higher 50-cent rate on top of whatever AGR tax applies. State projections initially put the per-wager yield at roughly $36 million to $40 million per fiscal year. Actual revenue exceeded $60 million within the first six months. Cumulative per-wager tax remittances from FanDuel and DraftKings alone topped $50 million by April 2026.
Operator responses split into three patterns. FanDuel applied a flat 50-cent surcharge on every wager placed in Illinois starting Sept. 1, 2025, and held that pricing for roughly seven months before pausing the surcharge in April 2026. DraftKings carved out exceptions across four categories: parlays priced at $10 or more, single-event wagers of $50 or more, bonus bet tokens, and customers at the Silver loyalty tier and above. Smaller operators raised minimum bet sizes rather than charge a per-wager surcharge to customers.
The third layer started Jan. 1, 2026. As part of Mayor Brandon Johnson’s $16.6 billion 2026 budget, the Chicago City Council approved on Dec. 20, 2025 a 10.25 percent municipal tax on adjusted gross sports wagering receipts generated within Chicago city limits, plus city-level annual licensing fees ranging from $5,000 to $50,000. The municipal tax stacked on top of the state-level graduated tax and the per-wager fee. Chicago officials projected the new revenue stream at $26.2 million annually.
The data has reflected the cost pass-through. Illinois Gaming Board records show online ticket counts in October 2025 fell 15 percent versus October 2024, the first sustained decline since the program’s 2020 launch. Wagers placed in February 2026 were down 25 percent year-over-year despite handle holding roughly flat at $1.17 billion, a divergence the Sports Betting Alliance characterized as evidence that bettors were sizing individual wagers larger to spread the surcharge across more dollars per ticket. Revenue in February 2026 dropped 14.7 percent year-over-year to $109.2 million.
Rep. Daniel Didech filed HB 5143 on Feb. 5, 2026 to repeal the per-wager fee effective July 1, 2026, leaving the graduated AGR tax in place. The bill moved out of the House Rules Committee with support from Democratic colleagues and was assigned to the House Revenue and Finance Committee, where additional members signed on. Revenue and Finance then re-referred the measure back to Rules on March 27. The April 17 House crossover deadline came and went without floor action. Didech told reporters in February the bill’s purpose was to let the graduated tax structure carry the revenue load and to bring volume back to licensed operators rather than push bettors toward unregulated platforms.
A second Didech bill, HB 4171, would bar Illinois municipalities from imposing their own sportsbook taxes, an explicit response to Chicago. HB 4171 collected 27 co-sponsors by February 2026 and was scheduled for a second reading. Lawmakers on both sides of the aisle have raised concerns that Chicago’s municipal layer creates a precedent other Illinois municipalities may follow.
The Sports Betting Alliance, which represents bet365, BetMGM, DraftKings, FanDuel, and Fanatics Betting and Gaming, filed suit in Cook County Circuit Court on Dec. 30, 2025 challenging the Chicago tax and licensing framework on Illinois Constitution grounds. The complaint argued the state’s Sports Wagering Act gives no municipality the authority to impose its own tax on top of the state-level structure. The SBA initially sought a temporary restraining order to block the ordinance from taking effect Jan. 1, then withdrew the TRO request on Dec. 31 after Chicago issued last-minute licenses to all five named operators. The constitutional case continues; a hearing was scheduled for March 2026.
The practical consequences for Illinois bettors come down to which of the Illinois sportsbooks to use for which kind of wager. DraftKings remains the only major operator that exempts parlays above $10, single-event wagers above $50, and bonus bets from its surcharge structure. FanDuel’s April pause makes Illinois pricing temporarily competitive with other states, but Flutter has tied its permanent removal to legislative repeal of the per-wager fee. The next checkpoint is the Illinois Gaming Board’s release of April and May 2026 monthly revenue reports, which will show whether the FanDuel pause moved handle or wager counts back toward 2024 levels. Until the legislative or legal track produces a resolution, Illinois bettors stay in the priciest tax regime among legal online sportsbooks in the country.
