Sports Betting Alliance Files Lawsuit Against City of Chicago

The Sports Betting Alliance is dealing with many pressing issues, but that isn’t stopping them from fighting rising operating costs for Illinois sportsbooks. 

The industry lobby group foiled a lawsuit against the city of Chicago in a Cook County court. The SBA is seeking a temporary restraining order against the city and its new budget, which includes city-specific taxes and licensing for sportsbooks. It argues that the changes violate state laws, which have the Illinois Gaming Board handle all taxation and regulation of the sports betting industry.

“The City’s attempt to impose this licensing requirement is invalid. It is unsupported by the ordinance’s text, represents an unconstitutional assertion of authority that rests exclusively with the State, and would irreparably harm the SBA, its members, and the public interest,” the lawsuit from the group reads.

Chicago’s original budget proposal called only for a 10.25% on sportsbooks, which the SBA already argued was illegal. However, tensions boiled over when an updated version of the budget not only kept the tax but also created a requirement for city-specific sportsbook licenses. 

Chicago currently receives tax revenue from sports betting, but it is first funneled through the state. 

Chicago Budget Also Targets Casinos

Chicago’s budget didn’t just target online sportsbook operators. 

The city also legalized video gaming terminals (VGTs), which had been banned to protect the city’s retail casinos. Lawmakers had planned on tax revenue from those casinos to help fill gaps in their budget, but they have failed to come close to their original projections. 

The timing of the change drew questions, given that Bally’s is almost finished with a gorgeous new casino and hotel downtown. The city has been at odds with he gambling giant, whose River North casino has not delivered the tax revenue expected. That has led some lawmakers to fear the new casino will underwhelm, prompting them to seek an alternative.

Bally’s was vocal in its opposition to VGTs, even threatening to withhold the $4 million annual payment it owed the city. The operator’s excitement for the new casino had been cooling before VGTs were approved, leaving many to wonder how much they would sacrifice to save the project.