Chicago's Online Sports Betting Tax: A Political Puzzle

A heated debate is unfolding in Chicago over a proposed tax on online sports betting. The city's Mayor, Brandon Johnson, is pushing for a 10.25% amusement tax on online sports bets. However, this idea is facing strong opposition.

Opposition from Illinois House Democrats

Thirty Illinois House Democrats have written a letter to the City Council, urging them to reject Mayor Johnson's plan.

Arguments Against the Tax

1. Driving Betting Underground

   • The Democrats argue that this tax could drive online sports betting underground.
   • They worry that higher taxes might push bettors to use unregulated, overseas sites.
   • These sites are often unsafe and untaxed, leading to a loss in state revenue.

2. Risk of Unregulated Sites

   • State Rep. Dan Didech, who chairs the House Gaming Committee, warns that if the tax is too high, bettors might turn to risky, unregulated sites.
   • These sites can be dangerous, might not pay out winnings, and often require the use of cryptocurrencies.

3. Strain on State Revenue

   • State Rep. Curtis Tarver, chair of the House Revenue Committee, points out that the state has already increased taxes on sports betting.
   • He believes that adding another tax could strain the city's relationship with the state, leading to a loss of home-rule powers for the city.

Communication and Collaboration Issues

The letter to the City Council highlights:

• A strained relationship between Mayor Johnson and Governor JB Pritzker.
• A lack of communication and a poorly communicated legislative agenda.
• The city should have consulted with the General Assembly before proposing the tax.

Criticism from Aldermen

• Ald. Matt O'Shea and Ald. Gilbert Villegas have also criticized the mayor's approach.
• They believe that the city missed an opportunity to collaborate with the state.
• They argue that the city should have worked with the General Assembly to secure a share of the state tax on sports betting.

Broader Implications

The debate over the online sports betting tax is more than just about money. It's about:

• Communication
• Collaboration
• The relationship between the city and the state

The outcome of this debate will have significant implications for both Chicago and Illinois.