With Issuance Of Last-Minute Licenses, Sports Betting Will Stay Live In Chicago

Bettors in Chicago won’t see a disruption in their sports betting platforms after the city Wednesday afternoon issued sports betting licenses. There was a possibility that wagering platforms would have to shutter Jan. 1 after the city council earlier this month passed a budget that added a 10.25% tax to bets made within the city but did not create a pathway for licensure.

The tax marks the third increase to operators in Illinois in the last two years. In 2024, state lawmakers changed the tax structure from a flat 15% tax to a sliding scale of 20%-40% depending on volume, and in July of this year, a new per-wager tax was added. Operators must pay a 25-cent fee for the first 20 million bets made on their platform in a calendar year and 50 cents for any above that. Some operators are passing that tax directly to consumers while others imposed bet minimums to mitigate the effect.

The Sports Betting Alliance (SBA) Tuesday sued the the city, saying betting operators could not continue to offer their platforms in Chicago without licenses, as well as requesting a temporary restraining order (TRO) against the new law. But according to ABC Chicago, the city issued last-minute licenses, and the SBA is dropping its request for a TRO, but will continue to pursue a lawsuit in which it argues that the city exceeded its constitutional authority by imposing the tax.

“Given these developments, there was no longer any need for an expedited TRO,” the SBA confirmed in a statement. “The SBA will nevertheless continue to pursue in court resolution of the invalidity and unconstitutionality of the City’s recently passed license and tax ordinances. Chicago sports fans will continue to have the benefits of legal, regulated sports wagering without interruption heading into the new year.”

Little info about new licenses

In its fillings Tuesday, SBA lawyers wrote that platforms would either risk operating without a license or would have to shutter to avoid “irreparable harm, including potential cascading regulatory consequences in Illinois and other jurisdictions where continued licensure depends on maintaining good standing and suitability everywhere the operator does business and damaging their reputations and customer goodwill.”

SBA lawyers argue in their broader lawsuit that only the state can issue sports betting licenses, and the decision by the city council to impose a tax is illegal. The Supreme Court in 2018 made the legalization of sports betting a states’ rights issue, and the only U.S. city that currently issues licenses is the District of Columbia.