Illinois Governor JB Pritzker has unveiled his Fiscal Year 2027 budget blueprint, which includes a proposal to significantly raise tax rates on casino table game revenue outside of Chicago’s casino framework. The plan would align table games with the more progressive tax brackets currently applied to slots and other gaming devices, creating a steeper rate structure that is expected to generate tens of millions in new annual taxes.
This move comes as the state seeks stable revenue sources amid ongoing fiscal pressures, including funding for education, infrastructure, and public services. Lawmakers in Springfield will now debate the proposal’s merits as part of the broader budget negotiation process, weighing its impact on the gaming industry against anticipated gains in state coffers.
Key Components of the Proposed Tax Change
Illinois already levies tiered taxes on gambling revenue, but table games, including blackjack, craps, roulette, and baccarat, have traditionally been taxed at comparatively lower rates than slot machines and video gaming terminals. Under the governor’s FY2027 plan:
- Progressive tax brackets applied to table games: Most casino table game adjusted gross revenue (AGR) outside Chicago would be subject to a rising tax schedule, with rates that could climb to as high as 50 % at the upper end of the revenue spectrum, similar to slots tax brackets.
- Shift away from flat or low‑tier rates: Current table game taxes are capped at lower thresholds (e.g., 15 % up to a certain AGR point and 20 % beyond). The new structure would broaden the base and increase the top rate.
- Revenue estimates: Preliminary projections indicate this realignment could contribute roughly $120 million or more annually to state revenue, depending on gaming performance and industry responses.
Industry observers note that taxing table games more aggressively may reduce operators’ margins, particularly for capital investments and promotions aimed at attracting high‑value players. However, proponents argue that the gaming sector continues to show resilience and that a steeper tax take can help address broader fiscal needs without raising taxes elsewhere.
Governor’s Budget Plan: Illinois’ Strategic Use of Gaming Taxes
The governor’s FY2027 budget package, totalling roughly $56 billion, reflects continued efforts to balance funding priorities with fiscal sustainability. In recent years, Illinois has leaned on gaming taxes as part of its broader revenue strategy, including adjustments to sports betting tax frameworks and ongoing discussions about iGaming expansion.
As state revenues from traditional sources face pressure from economic uncertainty and federal funding variability, policymakers have looked toward gaming as a comparatively stable revenue stream because of its broad economic footprint and relatively inelastic consumer demand.
Industry Impact: Potential Consequences of Illinois’ Tax Increase
Higher table game taxes in Illinois could have competitive implications, particularly for properties near state borders, where neighbouring jurisdictions may offer lower effective tax rates or different gaming mixes. Operators may need to account for potential shifts in patron behaviour if tax‑induced price increases (e.g., higher rake or drop requirements) are passed through to players.
That said, Illinois’ mature gaming market, supported by a combination of commercial casinos, regulated sports betting, and substantial ancillary gaming revenue, provides a relatively deep tax base. The degree to which the proposed changes influence operator strategy will likely depend on how other states adapt their tax and regulatory frameworks.
Broader U.S. Gambling Tax Trends: Illinois’ Role in a Shifting Landscape
Illinois’ move to revisit table game taxation is part of a broader pattern of U.S. states reassessing how various gambling streams contribute to public finances.
Some states have turned to per-bet fees and higher online gaming taxes to support revenue while still attempting to balance industry growth with fiscal goals. For example, in Michigan, lawmakers have debated higher taxes on iGaming and a per‑bet sports fee as part of their revenue planning, reflecting a trend toward fine‑tuning how modern gaming products are taxed.
In other states, early sports betting launches have produced significant wagering volume but minimal tax receipts relative to expectations, prompting policymakers to revisit tax structures and incentives. Missouri’s sports betting market, for instance, saw over $543 million in bets in its initial reporting period but generated only modest tax revenue, underscoring the challenge of striking the right fiscal balance.
These developments illustrate the diversity of approaches states are taking and the importance of thoughtful tax policy in sustaining both industry health and public funding needs.
Next Steps for Illinois: Budget Proposal Under Legislative Review
The proposed table game tax hikes will now enter the Illinois General Assembly’s budget debate, where lawmakers will review, potentially amend, and vote on the governor’s recommendations. Stakeholder feedback from the gaming industry, local communities, and fiscal analysts will influence this process.
If enacted as proposed, the tax changes would go into effect for FY2027, shaping how casinos plan operations and capital allocation in the coming years. Given the central role gaming plays in Illinois’ economy, industry participants and state policymakers will closely monitor the outcome of this debate.