Chicago May Impose Extra Taxes on Local Sportsbooks

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00:00for chicago you'll have to catch me up here sam because obviously i could read the story here but

00:04i don't know why this has really come down to the wire so much where because of some i mean i don't

00:10know what you would call it language maybe in their budget that some sports books are saying

00:16that they could potentially shut down how did this happen so fast and catch up on us here at

00:22the end of the year yeah it really is a fascinating development chicago is the first city in the u.s to

00:30propose taxing sports books on top of what the state already taxes you know historically the

00:35states have taxed sports books at a certain rate some states very high some states very low

00:40in illinois there's been about three tax hikes over the past year and a half of sports betting

00:46where sports books now have to pay about a 40 percent rate for the highest sports books on top

00:52of a per uh per bet fee a 50 cent fee uh per bet that they have to pay and we've seen them pass

00:59that down to the customer because it's kind of been untenable for them to continue business

01:03now as the state was having a lot of success doing that the city of chicago has said why don't we place

01:09an additional tax on sports books so there's a 10.25 tax uh currently proposed in the city's budget

01:17that would then layer that additional tax on top of sports books uh the budget is set to go in effect

01:22january 1st uh as is proposed right now it has not been changed despite sports books uh like fan

01:29duel draft kings and bed mgm this week coming out saying that we might have to pull out of the city

01:34of chicago if this goes into effect so effectively it would be a change that was added in the budget

01:40instead of lawmakers passing a law on their own it's something that happens a lot in politics where you

01:46want to change the law by making it one of many things that you change in a bigger budget that gets

01:51passed because it includes tax revenue as opposed to you know just proposing this um in the city

01:57council where it would really just kind of be weighed on the merits of itself we have now the

02:02sportsbook saying we might pull out chicago whether or not they do that remains to be seen there's still

02:06time for uh the city to effectively change its budget and not pass this uh you have had a lot of

02:13lawmakers urge them not to do it um but yeah it would be huge news if this actually ends up going

02:19through and if the sportsbooks actually end up pulling out obviously fanduel draft kings and bended

02:23mgm are pretty much the biggest players in the state and in the city uh would really be interesting

02:28to see how that affects the other sportsbooks as well um and how it impacts other cities potentially

02:34weighing this as well because again chicago is the only place to really propose this so it would be

02:39kind of major news for every other city in america that's considering a similar tax and uh you know when

02:44you talk about the offshore sportsbooks and the prediction markets which we'll get into in a bit

02:48it really would just be a huge huge change for sportsbooks