Sports activities Betting Alliance Sues Chicago Over Allowing Charges, Taxes

• The commerce group says a licensing requirement within the metropolis’s new finances might chase operators out of the Windy Metropolis.
• The finances goes into impact on Thursday, Jan. 1.
• SBA’s swimsuit additionally emphasizes the finances’s 10.25% on sports activities bets positioned inside Chicago metropolis limits.

The Sports activities Betting Alliance is suing Chicago, claiming the town is overstepping its constitutional authority with a brand new licensing requirement for sportsbook operators whereas additionally firing on the metropolis’s proposed tax on wagers positioned there.

A commerce group is suing Chicago over the town’s sports activities betting tax and licensing scheme. (Picture: OZinOH/Flickr.com)

Each gadgets are a part of the brand new finances, which fits into impact tomorrow. The commerce group argues licensing initiatives are set on the state, not metropolis, degree, including that Chicago’s effort to impose its personal allowing scheme on sportsbooks working there might chase these firms from the town.

The State — not the Metropolis — has sole authority to license and tax on-line sports activities wagering within the State of Illinois,” in accordance with the Alliance’s grievance. “The Illinois Structure reserves authority over licensing for income and income-based taxation to the State except expressly delegated. The Illinois Common Meeting has by no means licensed the Metropolis to impose licensing charges or income-based taxes on on-line sports activities wagering.”

Members of the Sports activities Betting Alliance (SBA) are Bet365, BetMGM, DraftKings, Fanatics, and FanDuel.

Operators Brief on Time to Combat Chicago Sports activities Betting Ploys

Chicago’s $16.6 billion finances, which Mayor Brandon Johnson (D) neither authorized nor rejected, accommodates the city-specific licensing provision in addition to a ten.25% levy on sports activities wagers positioned inside metropolis limits. The latter measure was proposed by the mayor.

In its swimsuit, the SBA argues its members had been assured Chicago would concern the related licenses to operators previous to the finances going into impact, however that hasn’t occurred and that lapse dangers forcing these gaming firms out of the third-largest US metropolis.

“Regardless of prior assurances that licenses might and could be issued on December 29, 2025, as of the time of submitting this Grievance, the Metropolis of Chicago has not issued the required municipal license to any SBA member or to its grasp license holder,” the SBA mentioned within the courtroom doc. “Nor has the Metropolis offered a proper willpower as as to whether any SBA member will obtain a Metropolis license for on-line sports activities wagering by the December 31, 2025, deadline.”

Earlier this month, the SBA penned a letter to Mayor Johnson requesting a delay of the licensing and tax requirement so member companies might adjust to the orders, however these overtures weren’t acknowledged prompting the lawsuit.

“These efforts have been unsuccessful, placing the SBA members in jeopardy of both violating the Ordinance, as interpreted by the Metropolis, after midnight on New 12 months’s Eve, or ceasing on-line sportsbook operations throughout the Metropolis fully,” notes the Alliance.

Illinois More and more Tough for Sports activities Betting Companies

Earlier this yr, Illinois Gov. J.B. Pritzker (D) signed regulation making a tax of 25 cents per wager on the primary 20 million wagers booked by an operator with that levy doubling to 50 cents for every wager thereafter. That adopted a sports activities betting tax improve in 2024 with the 2 measures combining to make Illinois one of many highest sports activities betting tax jurisdictions within the nation.

These strikes additionally resulted in DraftKings, Fanatics, and FanDuel making use of per wager charges with rivals growing minimal wager sizes. As for the Chicago-specific license charges, these too are thought of onerous.

“Additional confirming the license requirement is directed at producing income, the Metropolis fees $50,000 for a major sports activities license within the preliminary yr and $25,000 for every year thereafter, and $10,000 for a secondary sports activities license within the preliminary yr and $5,000 for every year thereafter,” concludes the SBA. “These charges exceed these imposed on all different kinds of companies.”