Sports Betting Alliance Sues Chicago Over Required Licenses

Summary

The Sports Betting Alliance (SBA) — the lobbying group for DraftKings, FanDuel, bet365, BetMGM and Fanatics — has filed suit in the Circuit Court of Cook County challenging Chicago’s newly adopted budget language that would require city-issued licences for online sports betting operators. The SBA seeks a temporary restraining order to stop the city enforcing those requirements, arguing the city lacks authority under the Illinois Constitution to impose local licensing or taxation on online sports wagering. Without relief, several major operators warned they may have to suspend online wagering in Chicago when the budget takes effect.

Key Points

The SBA sued Chicago after budget language required sports betting operators to hold Chicago licences; promised licences were not issued by the Dec. 29 deadline.
The group has asked the Cook County court for a temporary restraining order to block enforcement of the local licensing requirement.
SBA argues the City lacks home-rule authority and that only the State can licence and tax online sports wagering under the Illinois Constitution.
Operators face a dilemma: operate without a city licence (which the City deems unlawful) or suspend all online wagering in Chicago, risking significant revenue loss and player migration to unregulated markets.
SBA claims shutdowns could harm public interest by pushing bettors toward illegal alternatives and depriving state and city tax revenues.
State-level pushback is already underway: Sen. Patrick Joyce proposed a bill to penalise municipalities that impose local fees on sports wagering, and HB 4171 aims to clarify that only the State can tax sports betting.

Content summary

The lawsuit centres on whether Chicago can impose its own licensing and related costs on online sportsbooks operating inside city limits. The SBA says the Illinois General Assembly never authorised municipalities to require such licences or levies, and that the City’s attempt is an unconstitutional overreach that would cause irreparable harm to operators and the public.

Chicago previously considered a budget proposal that included a 10.25% tax on online sports bets; the final passed budget retained the tax and added the local licensing language. The SBA says the lack of issued city licences by the implementation date left its members exposed to enforcement and regulatory risk, prompting immediate legal action.

Context and relevance

This is a major dispute between a large municipality and the biggest national sportsbook operators over who controls revenue-generating regulation for online wagering. The outcome will affect market access, regulatory compliance across jurisdictions and municipal attempts to raise local revenue from sports betting. It also feeds into broader state-versus-local tensions about taxation and regulatory authority for gaming across the US.

Why should I read this?

Because this isn’t just a local spat — it could reshape how cities try to squeeze revenue from online sportsbooks. If you care about market access, regulatory risk or where your local betting tax money actually comes from, this is worth five minutes of your time. Plus, it could mean your go-to apps stop taking bets in Chicago unless this gets sorted fast.

Author style

Punchy: the piece flags a potentially high-impact, time-sensitive legal fight. If you follow gaming regulation or municipal finance, read the details — this could change how operators and cities negotiate turf and taxes.