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Sports betting continues to be a hot topic heading into 2026 as states either look to add online sports wagering as an offering or curb betting activity amid concerns of its impact on consumers. Illinois was one of the first states to adopt mobile sports betting and has largely been free of restrictions, but legislators have started to push back. Lawmakers passed a tiered tax system in 2024, which can cost operators 40% of all revenue over $200 million. They also passed a pre-bet tax on each wager, which sportsbooks have passed on to customers. Sportsbooks pay 25 cents on their first 20 million bets and 50 cents on every bet taken after that, and consumers now have minimum bet limits as part of this additional cost. Now, operators like DraftKings and FanDuel could face further restrictions in Chicago in the latest Illinois sports betting news.

The city is finalizing its 2026 budget and there is a provision that requires businesses or individuals to hold city-level licenses when accepting sports betting wagers. That provision is set to include online sports betting operators, which could affect sportsbooks like DraftKings, FanDuel, BetMGM and bet365 operating in Chicago. Of course, the issue won't exist if the language is removed.

This budget language could potentially impact operations in other states since sportsbooks typically have to be licensed to operate across all jurisdictions. If they're not able to legally operate in Chicago due to the new budget, they could face pushback in other major cities and, in turn, the states those cities are located in.

The Sports Betting Alliance has offered resistance to this development, saying the effective date of this provision in the budget should be pushed back in order to allow sportsbooks to secure city-level licenses. The current effective date is Jan. 1, 2026. The SBA says a delay would allow operators to understand enforcement expectations, submit applications for their licenses and let the city put together a detailed structure of how these licenses work.

The budget language is set to be put in front of the city council on Saturday, Dec. 27. If passed, it could further hamper sports betting activity in Illinois, which has fallen by 15% even though total wagering has gone up.