Chicago should crack down on illegal sweepstakes machines, tax online sports betting and lift the city ban on video gaming — but only after demanding a greater cut of tax revenue from the state, City Council members said Monday.
A city consultant has concluded that video gaming is not worth pursuing under a tax structure now heavily tilted in the state’s favor. Right now, Springfield gets five to six times more than Chicago and other municipalities get from video gaming in Illinois.
Ald. William Hall (6th), chair of the Council’s Revenue Subcommittee, pegged the overall jackpot from video gaming at $1.1 billion, with $955 million of that amount going to the state of Illinois. Chicago and other municipalities get $164 million, Hall said at a subcommittee hearing Monday.
That’s why the state is interested in lifting the Chicago ban.
“They would generate a lot of money opening up this market,” Chicago Chief Financial Officer Jill Jaworski said. “The state gets a much larger percentage than we do” from a tax structure that is “not favorable to us.”
Ald. Andre Vasquez (40th) countered, ”That’s why the good Lord invented negotiations.”
Budget Committee Chair Jason Ervin (28th) was exasperated by revenue estimates for Chicago from video gaming — just over $3 million in 2026 and $46.7 million by 2035 — that assumed the tax rate would remain the same.
It doesn’t “take a rocket scientist to figure out” that the current tax structure is a “loser for Chicago … if we have to get four times as much action to break even,” Ervin said. “This is not possible. So the question comes down to, how do we find a reasonable ask between the state to make this all work?”
Ervin said it’s “crazy” that Mayor Brandon Johnson’s financial team hasn’t “thought past what the current tax structure” is, adding he wondered whether Monday’s hearing was an attempt to bury the issue of video gaming in Chicago at a time “when we’ve got a whole body of people clamoring to do this.”
“You’ve got to figure out a way to make this work because you’ve got businesses in the city that are looking for the revenue. You’ve got a City Council that’s looking for additional revenue,” Ervin said. “We really want to find solutions here — not just say `no’ to what we already know the answer to be.”
Jaworski assured subcommittee members that Monday’s presentation was not aimed at dooming video gaming terminals in Chicago.
But the consultant study, by Christiansen Capital Advisors LLC, concluded that under the existing tax structure, there “not a big impact,” Jaworski said. If the video gaming tax in Chicago were doubled, the city’s cut would rise to $38 million in 2027 and about $54 million in 2028.
“We think there will be demand in the neighborhood. But with the taxing framework that we have to deal with at the state, we’re not seeing that we’re going to make much more money,” Jaworski said. “That doesn’t mean we shouldn’t have them. … That can be a very strong argument for going to the state to try to get changes…that would make it more favorable to us.”
Hall joined South Side colleagues Jeanette Taylor (20th) and Black Caucus Chair Stephanie Coleman (16th) in demanding that the city license, regulate and tax illegal sweepstakes machines.
“We’re getting nothing for sweepstakes. They’re at gas stations. They’re at liquor stores. They have become a haven for crime,” Coleman said.
Ald. Felix Cardona (31st) added Chicago is “losing a lot of money from sweepstakes machines. They’re not supposed to pay out money, but they do.”
Taylor stressed that illegal sweepstakes machines saturate the city’s African-American communities.
“I can take you to three different liquor stores … and show you those machines that have been there for five-plus years that we have not made a dime on,” she said, demanding that no store have more than “three to five” machines — and only if they provide security.
“I blame every administration that has allowed these machines to sit in our wards — and we got no money off of them,” Taylor said.
Jaworski said sweepstakes machines “live in a gray area, and that’s why enforcement is challenging. The administration agrees. We do need legislation around that.”
When Taylor pushed for a Chicago tax on internet sports betting, Jaworski disclosed that the Johnson administration has already “done the analysis” on imposing a local tax on “Draft Kings” and other online sports betting ventures.
“People download them and gamble all the time. We should be able to get money off of them,” Taylor said.