SBA celebrates pause on Chicago sports betting fees, tax increase
It’s new year, same battle for the city of Chicago as the Sports Betting Alliance (SBA) continues to fight the city over a new tax increase and a sports betting licensing law that were meant to impose new fees starting on January 1st, 2026.
The SBA consists of numerous top online betting platforms, notably including bet365. These online casinos and sportsbooks have come come together to file a lawsuit against the Chicago Department of Finance, City Comptroller Michael Belsky, and Commissioner of Department of Business Affairs and Consumer Protection Ivan Capifali to prevent new taxes and fees from being imposed on and around online sports betting.
Now, it looks as though those efforts are bearing some fruit.
Why is the SBA coming after Chicago?
The SBA is coming after the city of Chicago because it has made clear plans to further tax online betting sites. As part of the city’s 2026 budget, Chicago had implemented a 10.25% tax on all retail and online wagers placed within the city. The new law also states that operators that offer online sports wagers will need a city-specific license for Chicago, and this license will cost $50,000 up front and have a $25,000 renewal fee each year.
Due to these high operation costs and increased taxes, members of the SBA have previously stated they could leave the city of Chicago – and maybe all of Illinois – due to the complexities of following state-wide mandates alongside with Chicago’s city-specific regulations.
In the past, the SBA had also filed for a temporary restraining order, which was later withdrawn.
According to the SBA, the Chicago City Council does not have legal power to implement these increased costs independent of state approval. The filing points to an Illinois state law that states a license for revenue cannot be required without legislative permission. At this moment, the General Assembly hasn’t granted approval for the Chicago City Council’s ruling.
In the suit, the SBA explained that the 2% tax on retail wagers in Cook County means municipalities can’t make these kind of tax rules. And on top of the possible legal issues with Chicago’s new tax increase affecting sports betting and esports betting sites, the SBA also felt the wording left too much up to interpretation.
Earlier in the month, the SBA sent a letter to Chicago Mayor Brandon Johnson about the license portion of the law, questioning how operators are meant to obtain the license since it wasn’t properly outlined. It was even more of a concern since operators were meant to get this license before 2026, mere weeks away. The SBA argued that this left them with two decisions: continue operations in 2026 without the license or shut down Chicago operations entirely, leaving bettors to gamble illegally.
The letter included a request to delay the implementation by 180 days to allow for further discussion around the new licensing requirements, but it also made clear the SBA’s preference to have the new financial requirements nixed entirely.
The SBA also made clear that the wording made it sound as if the rules wouldn’t apply to online wagering, since it specified wagers made at physical locations and there are no physical Chicago sportsbooks that currently operate online wagering. Does this mean that online betting sites could continue to operate within Chicago without being affected? The city of Chicago didn’t seem to agree with the SBA’s interpretation, but the organization’s complaints may have led directly to preventing the new tax increase and licensing fees from coming into effect.
Chicago puts a pause on sports wager tax and licensing
A hearing on the lawsuit is scheduled for March 2026, with the city of Chicago having its new sports wager tax increase and licensing fees put on hold until then. Meanwhile, Chicago’s sports betting will continue as it was for now.
The SBA championed the pause, pointing to the benefits of “legal, regulated sports wagering” being able to continue in the city. Some state representatives have sided with the SBA, stating that cities can’t “create their own rules” for the gambling and betting industry.
Featured image credit: Choose Chicago
Olivia has worked in media ever since graduating from college, with her coverage ranging from traditional newspaper reporting to digital coverage of all things gaming, online betting, and nerd culture. She has traveled around the world pursuing that coverage, from the far coasts of the United States to the busy downtown core of Tokyo, Japan. Olivia’s favorite games include Overwatch and Super Smash Smash Bros, and she has been published at Esports Illustrated, Inven Global, EsportsInsider, Upcomer, and elsewhere.
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