Illinois lawmakers have introduced legislation that would prevent cities and counties from regulating or taxing sports wagering, a move that directly affects an ongoing dispute between operators and the City of Chicago.
House Bill 4171 would amend the state’s Sports Wagering Act to make licensing, regulation and fees exclusive responsibilities of Illinois authorities. Local governments would be barred from imposing additional taxes, licensing requirements or administrative rules on wagering operators or bettors.
The proposal follows litigation brought by the Sports Betting Alliance after Chicago officials attempted to introduce a 10.25% tax on adjusted gross revenue generated from bets placed within city limits. Industry representatives argued the measure exceeded municipal authority and created conflicting regulatory obligations.
Sports Betting Alliance Chairman Jeremy Kudon said: “There still is a concern on our part that other Illinois municipalities will follow this precedent and just create a complete morass of licensing, taxes, etc. for something that really should just be done at the state level.”
If adopted, the bill would immediately invalidate local wagering tax initiatives and reinforce a single statewide regulatory framework.
The proposal comes during a period of broader regulatory enforcement across Illinois gambling. Earlier this year, the Illinois Racing Board suspended Suburban Downs’ organization license after the racetrack failed to provide financial documentation demonstrating its ability to operate scheduled race dates.
Regulators said reinstatement would depend on corrective action and proof of financial integrity.
State gaming activity has also continued to grow. According to figures released by the Illinois Gaming Board, casinos generated $169.1m in revenue from table games and electronic gaming devices in December 2025, a 7.6% year-on-year increase.
Lawmakers have not yet indicated a final timeline for consideration, but the measure signals a shift toward consolidating sports betting oversight at the state level while the Chicago tax dispute remains unresolved.
In February, the Sports Betting Alliance challenged Chicago’s proposed betting tax, warning it could create overlapping local regulations across Illinois.
Operators previously warned the city they could reconsider market participation if local wagering taxes significantly increased operating costs
