Sports betting group sues Chicago over new tax on sports wagers
CHICAGO - A group of sports betting companies filed a lawsuit against the City of Chicago seeking to temporarily stop the implementation of a new law on sports wagers that’s set to go into effect in the new year.
It was just this month that the Chicago City Council approved the new tax on sports betting to raise revenue and close a more than $1 billion projected deficit for 2026.
The lawsuit was filed on Tuesday in Cook County Circuit Court.
What we know:
The group, called the Sports Betting Alliance, said it had been seeking clarity on the law’s requirement for licensing to operate in the city. The companies also claimed in their lawsuit that the city lacks the legal authority to impose licensing and taxing regulations on sports betting.
"The Illinois General Assembly has never authorized the City to impose such licensing or taxes on online sportsbooks. Thus, the State has sole authority to license and tax online sports wagering in the State of Illinois," the lawsuit said.
The State of Illinois already licenses and taxes sports betting in the state. State lawmakers legalized sports betting back in 2019.
The alliance members argued that if the law were to go into effect on Thursday, Jan. 1, as scheduled, it would force them to choose between operating in Chicago without a license or stopping all online sports betting, which would affect their bottom line and their customers.
Just days before the new tax and regulations were approved, Jeremy Kudon, the Sports Betting Alliance’s chairman, sent a letter to Mayor Brandon Johnson asking him to delay their implementation. That would "allow operators to understand the requirements, prepare and submit complete applications, and obtain the necessary City licenses prior to enforcement," according to the letter.
The Sports Betting Alliance on Wednesday said it withdrew a motion for a temporary restraining order to halt the law from going into effect because the city moved to "maintain operations of legal platforms that provide customer protections." But still, the alliance said, the lawsuit will continue to proceed alleging the " invalidity and unconstitutionality" of the tax and regulations.
A city spokesperson did not immediately respond to a request for comment on the lawsuit.