Illinois Sportsbooks Threaten to Exit Chicago Over Budget

The drama surrounding the Illinois sports betting market just keeps on churning.

This week, five sportsbook operators issued warnings that they would exit the Chicago market due to the new alternative budget passed last week. The frustration centers on new language in the budget that would require a special city-specific license for sportsbooks and add a 10.25% tax. This is in addition to the license and taxes required by the state, which already make it one of the most expensive states to operate in.

Before the budget was passed, the Sports Betting Alliance announced that bet365, BetMGM, DraftKings, Fanatics, and FanDuel would exit the city. 

Three of those operators have launched their own prediction platform, allowing them to continue offering sports betting in the city without the tax and licensing requirements.

One of the primary reasons sportsbooks are threatening to exit Chicago is the nationwide implications. If they simply accept the new changes, which are the first of their kind in the US, it would encourage other major US cities to follow suit. 

If the five sportsbooks decide to exit the city, it would take away four of the largest sportsbooks from the market.

Nobody Wants This

There was a common belief that Chicago would back down from their radical changes to sports betting. 

State lawmakers had warned them against approving the changes, fearing it would lead to irreversible damage to the market. They had raised tax rates twice in one year, leading operators to levy new fees to offset the cost. While the market’s handle has remained strong, it has led to far fewer bets.

Sportsbooks have also warned Chicago over this since the idea of tax changes was first discussed. With new fees and minimum bet requirements already added, they believe the cost of operating in the state will be too high to justify operating there.

Chicago lawmakers have ignored all of those warnings, and now they may pay the price. Because most Illinois residents live in the Chicago area, they will face fewer betting options. Those left will be far more expensive to use, pushing bettors to offshore operators or sports prediction markets.