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FILED
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS 12/30/2025 10:25 AM
COUNTY DEPARTMENT, CHANCERY DIVISION Mariyana T. Spyropoulos
CIRCUIT CLERK
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

COOK COUNTY, IL
SPORTS BETTING ALLIANCE, ) 2025CH12984
Calendar, 9
) 35958272
Plaintiff, )
)
v. )
)
Case No. 2025CH12984
CITY OF CHICAGO; IVAN CAPIFALI, as )
Commissioner of Department of Business )
Hon.
Affairs and Consumer Protection; )
CHICAGO DEPARTMENT OF FINANCE; )
and MICHAEL BELSKY, as City )
Comptroller, )
)
Defendants. )

VERIFIED COMPLAINT FOR DECLARATORY

JUDGMENT AND PERMANENT INJUNCTION

Plaintiff Sports Betting Alliance (“SBA” or “Plaintiff”), by and through undersigned

counsel, brings this verified complaint pursuant to 735 ILCS 5/2-701 for declaratory and injunctive

relief against Defendant City of Chicago (the “City”), Defendant Ivan Capifali in his official

capacity as Commissioner of the City of Chicago’s Department of Business Affairs and Consumer

Protection, Defendant Chicago Department of Finance, and Defendant Michael Belsky in his

official capacity as the Comptroller of the City of Chicago (collectively, “Defendants”), and

alleges as follows:

Nature of the Action

1. This action seeks a declaration of the invalidity and unconstitutionality of the City

of Chicago’s interpretation of its amendments to Title IV, Chapter 4-156, Article VII of the

Chicago Municipal Code, Section 4-156-960 et seq., scheduled to take effect on January 1, 2026

(the “Chicago Ordinance Amendments”), which would impose a new municipal licensing

requirement and a 10.25% tax on all online sports wagering in the City, as well as an injunction
 precluding enforcement of the purported licensing requirements against all sportsbook operators

that accept online sports wagers from customers located in the City, and of the tax set forth in the
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

amendments.

2. The Chicago Ordinance Amendments exceed the City of Chicago’s constitutional

authority. Under Article VII, Section 6(e) of the Illinois Constitution, a home rule unit such as the

City of Chicago, may not require a “license for revenue” or “impose taxes upon or measured by”

income, earnings, or occupations unless the General Assembly has expressly granted that power

to the home rule unit. The General Assembly has not done so here.

3. In June 2019, Illinois legalized sports wagering statewide by enacting the Sports

Wagering Act. 230 ILCS 45/1 et seq. The Sports Wagering Act established a comprehensive

State-controlled licensing, regulatory, and taxation framework for sports wagering overseen by the

Illinois Gaming Board.

4. The SBA’s members include the sportsbook businesses operating under the trade

names Bet365, BetMGM, DraftKings, FanDuel, and Fanatics Betting and Gaming, including their

State-licensed operating subsidiaries that provide sports wagering in Illinois and in other

jurisdictions where sports wagering is legal. These Illinois sportsbook operators already pay

effective tax rates that can exceed 50% of their online sports wagering income in Illinois—one of

the highest tax burdens on legal sports wagering in the country.

5. Since the enactment of the Sports Wagering Act, SBA members have lawfully

offered sports wagering to customers in Chicago and across Illinois pursuant to state regulation

and oversight. Consistent with Illinois requirements, SBA members have adopted robust

safeguards to prevent underage wagering and operate sportsbooks only in the states and

jurisdictions where online and/or retail sports betting is legal and where they have complied with

2
 necessary licensing requirements. SBA members are among the most heavily regulated and highly

taxed businesses operating in Illinois.

FILED DATE: 12/30/2025 10:25 AM 2025CH12984

6. The City of Chicago hastily enacted the Chicago Ordinance Amendments on

December 20, 2025, as part of a last-minute effort to pass a budget before the December 31

deadline and thereby avoid a municipal government shutdown. The City adopted this novel

municipal licensing fee and income-based tax on online sports wagering in Illinois without

constitutional or statutory authority to do so.

7. According to the City, the Chicago Ordinance Amendments also require sports

wagering operators, including all SBA members, to pay substantial licensing fees. The master

sports wagering license holders with whom SBA members partner under the State regulatory

scheme will be forced to pay $50,000 for a “primary” City-level license and $25,000 annually

thereafter to maintain it, while SBA members themselves will be contractually required to

reimburse the license holders for those fees and to pay $10,000 for an initial “secondary” City-

level license and $5,000 annually thereafter to maintain it. The Amendments also impose a

whopping 10.25% municipal tax on net income from all sports wagers placed within City limits.

8. The City has communicated to representatives of the SBA and their members that,

under the Chicago Ordinance Amendments, even SBA members that operate no physical location

in Chicago must nevertheless be licensed by January 1 to continue accepting online wagers from

customers located in the City. The Ordinance, as amended, says no such thing. By its plain

language, the amended Ordinance requires a sports wagering operator to obtain a license only if it

is conducting sports wagering at a “physical location” within the City, including conducting

“related” mobile wagering “as a result of” the operator being “physically located in Chicago.” Chi.

Mun. Code, § 4-156-962.

3
 9. With only one exception, the SBA members have no “physical location” in

Chicago. And for the sole member that does, its online sportsbook operations are not related to its
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

physical location in Chicago. The City’s attempt to apply the Chicago Ordinance Amendments to

SBA members with no physical location in Chicago contravenes the plain language of Section 4-

156-962.

10. The only SBA member with a physical location in the City—DraftKings affiliate

Northside Crown Gaming LLC, conducts in-person betting at its brick-and-mortar location,

DraftKings Sportsbook at Wrigley Field (“DraftKings Wrigley”). Those in-person operations are

entirely separate from DraftKings’ online sports betting offered throughout Chicago and Illinois,

which are conducted through a different DraftKings affiliate, Crown IL Gaming LLC. Indeed,

since 2020, DraftKings has been providing online sports betting state-wide, including in Chicago,

through Crown IL Gaming LLC. When DraftKings Wrigley opened in 2024, providing in-person

bets through Northside Crown Gaming LLC, DraftKings continued to provide online sports betting

exclusively through Crown IL Gaming LLC just as it had done before, and it does so to this

day. DraftKings’ sports betting operations, in short, have never been, “related to” or “as a result

of” in-person wagering at DraftKings Wrigley. Thus, the Ordinance, as amended, does not apply

to DraftKings’ online sports betting operations across Chicago.

11. Separate and independent of the City’s untenable interpretation of the Chicago

Ordinance Amendments’ licensing requirement, the City’s paradigm-shifting amendments also

fail on constitutional grounds. The State—not the City—has sole authority to license and tax

online sports wagering in the State of Illinois. The Illinois Constitution reserves authority over

licensing for revenue and income-based taxation to the State unless expressly delegated. The

4
 Illinois General Assembly has never authorized the City to impose licensing fees or income-based

taxes on online sports wagering.

FILED DATE: 12/30/2025 10:25 AM 2025CH12984

12. For these reasons, among others, the Chicago Ordinance Amendments’ licensing

and tax requirements for online sports wagering violate Article VII, Section 6(e) of the Illinois

Constitution and therefore are unenforceable.

13. Enforcement of the invalid and unconstitutional Chicago Ordinance Amendments

against SBA members would cause immediate and irreparable harm to SBA’s members.

Critically, having passed the budget imposing the new municipal licensing requirement only on

December 20, 2025, the City is unable to perform the due diligence necessary to issue licenses

ahead of the amended Ordinance’s January 1, 2026 effective date. Absent injunctive relief, SBA

members would be unable to continue operations in Chicago and remain in compliance with the

Chicago Ordinance Amendments as interpreted by the City. They would thus be faced with an

impossible choice: operate without a City license or cease online sports book operations entirely

within the City. Ceasing operations in Chicago would likely cause irreparable injury to the SBA

members’ ongoing business operations, their reputations, and customer goodwill along with the

imminent loss of revenue from being forced to suspend operations in the City of Chicago as well

as the costs and operational disruptions associated with geofencing and disabling lawful online

wagering within City limits. These harms cannot be recovered through damages because

municipalities are immune from monetary liability arising from the enactment or enforcement of

legislation. As a result, SBA members have no adequate remedy at law, necessitating equitable

relief from the City’s interpretation of the Amended Ordinances. Alternatively, operating without

a City license—even though the SBA members disagree with the City’s interpretation—would

also cause them irreparable harm, including potential cascading regulatory consequences in Illinois

5
 and other jurisdictions where continued licensure depends on maintaining good standing and

suitability everywhere the operator does business, and damaging their reputations and customer
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

goodwill. Illinois’ sports wagering regulations, for example, impose on all licensees an ongoing

general duty to “Comply with all federal, State, and local laws and regulations,” Ill. Admin. Code

tit. 11, § 1900.210, and licensees must report to the Illinois Gaming Board “[a]ny adverse action

relating to any gaming license or operation in any other jurisdiction,” id. § 1900.220. Other state

laws and regulations impose similar requirements. Continuing operations without a municipal

license would therefore risk irreparable harm, including potentially impairing SBA members’

ability to maintain licenses or obtain new ones in other jurisdictions.

14. SBA members ceasing operations in Chicago also would harm customers of these

legal sportsbook operators by driving them from legalized sports wagering to the illegal sports

wagering alternatives readily available on the internet and through local bookies, that lack any

state oversight or consumer protections. Because those alternatives are untaxed, forcing SBA

members to “go dark,” would deprive Illinois, and, derivatively, Chicago, of significant revenues

under existing state tax laws from online sports wagering that has been legal in Illinois and in

Chicago since 2019.

15. Even if SBA members do not cease operations in Chicago, absent court

intervention, they will be required to pay many millions of dollars under this unlawful 10.25% tax.

This also could mean added costs, making offshore, illegal gaming an increasingly more attractive

option than legal, regulated sports wagering for bettors in Chicago and likely damaging SBA

members’ reputations and goodwill.

16. As Alderman Gilbert Villegas recently explained in a letter to the Chicago Tribune:

“There’s a right way and a wrong way to do things, and when you do things the wrong way, they

6
 can get messy and costly in a hurry. That’s one of the reasons that Chicago budget leaders should

abandon the misguided and half-baked idea of taxing people in Chicago who go online to bet on
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

sports…. City budgets need solutions that are predictable and dependable, and a new tax on sports

bets isn’t one of them. Under these tight circumstances, an additional sports bet tax by Chicago

will simply drive more bettors away from legal betting sites.” 1

The Parties

17. Plaintiff Sports Betting Alliance (“SBA”) is an Internal Revenue Code

section 501(c)(6) non-profit trade association headquartered in Arlington, Virginia whose member

entities are licensed by the Illinois Gaming Board (“IGB”) to conduct sports wagering in Illinois.

As used herein, “SBA members” include the sportsbook businesses operating under the trade

names Bet365, BetMGM, DraftKings, FanDuel, and Fanatics Betting and Gaming, including their

State-licensed operating subsidiaries that provide sports wagering in Illinois and in other

jurisdictions where sports wagering is legal. SBA members are committed to providing

responsible gaming experiences.

18. The SBA advocates for legal, regulated online sports betting and works to eliminate

unregulated and illegal betting operations. In furtherance of that goal, the SBA seeks to advance

the interests of companies involved in online sports betting and in securing fair and non-

discriminatory treatment under both federal and state laws and regulations.

19. The SBA’s objectives are to encourage sound regulation and taxation of a

previously illegal market, to control and protect the integrity of sports wagering, to provide

responsible gaming, and to promote economic development. The newly enacted Chicago

1
Gilbert Villegas, Ald. Gilbert Villegas: Chicago shouldn’t tax people who go online to bet on
sports, Chicago Tribune, Dec. 18, 2025, https://www.chicagotribune.com/2025/12/18/opinion-
chicago-sports-betting-tax/ (last accessed Dec. 29, 2025).

7
 Ordinance Amendments, as interpreted by the City, would frustrate these objectives by putting

existing sports wagering operators in legal jeopardy if they continue to operate in Chicago come
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

January 1, as the City has been incapable of timely implementing the licensing scheme it now

claims the Ordinance requires. Ceasing those operations would materially harm SBA members

financially and reputationally and would incentivize customers to engage in unregulated and

untaxed gaming.

20. SBA members all operate online sportsbooks in Illinois, including within the City

of Chicago. SBA members offer online sports betting in Chicago, with safeguards in place to,

among other things, prevent minors from betting. SBA members operate only in the states and

jurisdictions where online and/or retail sports betting is legal, licensed, regulated, and taxed.

21. In 2025, SBA members have processed the vast majority of online sports wagers

placed in Chicago and statewide. SBA members’ operations in Illinois have generated immense

tax revenues for the State. In October 2025 alone, sports wagering in Illinois yielded more than

$56 million in State tax revenue—the vast majority of which is attributable to online sports wagers

placed with SBA members. The State is on pace to generate over half a billion dollars in tax

revenue from sports wagering in calendar year 2025.

22. Defendant City of Chicago is an Illinois municipal corporation with offices located

at City Hall, 121 N. LaSalle Street, Chicago, Illinois 60602. Through its various offices (including

the Department of Finance and the Department of Business Affairs and Consumer Protection),

employees, agents and/or elected officials, the City of Chicago will administer and collect the

primary and secondary sports license fees and the 10.25% tax on the adjusted gross sports wagering

receipts under the Chicago Ordinance Amendments. Chi. Mun. Code, § 4-156-960 et seq. (eff.

Jan. 1, 2026).

8
 23. Defendant City of Chicago is a “home rule unit” within the meaning of the Illinois

Constitution and state statutes.

FILED DATE: 12/30/2025 10:25 AM 2025CH12984

24. Defendant Ivan Capifali (the “Commissioner”) is sued in his official capacity as

Commissioner of the City of Chicago’s Department of Business Affairs and Consumer Protection.

Under the Chicago Ordinance Amendments, Commissioner Capifali is empowered to administer

the Chicago Ordinance Amendments. Chi. Mun. Code, § 4-5-010.

25. Defendant Chicago Department of Finance is the division of the City of Chicago

that is responsible for revenue collection. Taxes paid pursuant to the Sports Wagering Act are due

and payable to the Department of Finance. Chi. Mun. Code, § 4-156-974.

26. Defendant Michael Belsky (the “Comptroller”) is sued in his official capacity as

the Comptroller of the City of Chicago, which is the office at the head of the Chicago Department

of Finance. Comptroller Belsky is empowered to collect all City revenue, including the impending

licensing fees and 10.25% tax imposed on SBA members under the Chicago Ordinance

Amendments.

Jurisdiction and Venue

27. This Court has jurisdiction over this matter pursuant to 735 ILCS 5/2-701, as well

as under Article VI, § 9 of the Illinois Constitution, because there is an actual and justiciable

controversy between Plaintiff and Defendants arising under the Illinois Constitution, Article VII,

Section 6 and Article IX, Section 3, as to which Plaintiff is entitled to a declaration of its members’

rights.

28. The Court has jurisdiction over Plaintiff’s challenge of the City’s licensing and

taxation of sports wagering revenue because Plaintiff disputes the validity of the assessment of

that licensing and taxation under the Constitution of the State of Illinois.

9
 29. This Court has personal jurisdiction over Defendants because: (i) the City of

Chicago is an Illinois entity with its principal place of business in Illinois; (ii) the Chicago
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

Department of Revenue is a subdivision of the City of Chicago; (iii) the Commissioner and

Comptroller reside in Illinois; and (iv) the conduct directed and enforced by the City, the

Department of Finance, the Comptroller, and the Commissioner against Plaintiff occurred, is

occurring, and will occur in Illinois. 735 ILCS 5/2-209(a)(1), (b)(2), (b)(4), (c).

30. Venue is proper in this Court because: (i) Defendants have their principal office(s),

or conduct business in Cook County, Illinois, 735 ILCS 5/2-101(1), 2-102(a), 2-103(a); and

(ii) transactions that gave rise to Plaintiff’s cause of action against Defendants – the adoption of

the Ordinance Amendments at issue and the impending application thereof – occurred and are

occurring in Cook County, Illinois, 735 ILCS 5/2-101(2).

Standing

31. The SBA has standing to bring this action on behalf of affected SBA members,

each of which operates legal sports betting businesses that accept wagers from customers located

throughout Illinois, including in Chicago, pursuant to the standards for associational standing. See

Hunt v. Washington Apple Advertising Commission, 432 U.S. 333 (1977).

32. The Chicago Ordinance Amendments will cause SBA members real, immediate,

and direct harm by precluding them from operating in Chicago after January 1 in compliance with

the City’s interpretation of the Chicago Ordinance Amendments. As noted, in the seven business

days between the City’s adoption of the Chicago Ordinance Amendments and the January 1

effective date, the City has failed to create and administer a system for granting the licenses it

claims SBA members require. Whether SBA members decide to operate without a City license or

cease operations entirely within the City, the harm is irreparable.

10
 33. If the operators suspend online sports betting in Chicago, it will cause immediate

and irreparable injury to SBA members’ goodwill, customer relationships, and ongoing business
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

operations. It will expose them to financial losses and reputational harm in one of the busiest

sports betting months of the year, including from New Year’s Day college football bowl games,

the balance of the College Football Playoffs, and the NFL playoffs. These additional financial

harms cannot be recovered through damages because municipalities are immune from monetary

liability arising from the enactment or enforcement of legislation. As a result, SBA members have

no adequate remedy at law.

34. Ceasing legal online operations also will harm the SBA members’ customers and

the public interest, as bettors will be driven to illegal gambling alternatives. And it will injure the

State and City by depriving them of tax revenues under existing Illinois statutes that tax online

sports wagering.

35. Alternatively, operating without a City license would cause SBA members

irreparable harm as well, by potentially jeopardizing their sportsbook state licenses in Illinois and

in other jurisdictions across the country and damaging their reputations and customer good will.

36. Finally, even if SBA members obtained licenses pursuant to the amendments, the

Chicago Ordinance Amendments’ 10.25% tax would harm SBA members by costing them untold

millions of dollars in lost revenues, and likely harming their reputations and impairing customer

goodwill.

Factual Background

A. Statewide Framework for Online Sports Betting

37. The June 2019 passage of the Illinois Sports Wagering Act (“Sports Wagering

Act”) legalized sports betting in Illinois. Before sports betting was legalized, it occurred in Illinois

solely through illegal channels such as underground and offshore sportsbooks. The Sports

11
 Wagering Act legalized both online and retail sports betting in the State, authorizing retail facilities

including in-State casinos, racetracks, and larger sports venues to offer sports betting.
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

38. The Sports Wagering Act’s stated goal is to promote public safety for sports

leagues, teams, players, and fans by making sports betting legal and regulating it. 230 ILCS

45/25-5.

39. State Licensing Regime. To conduct sports wagering in Illinois, SBA members

and their casino partners underwent lengthy, thorough, and expensive processes to obtain master

sports wagering licenses, management service provider licenses, and, as necessary, supplier

licenses. See 230 ILCS 45/25-20; Ill. Admin. Code tit. 11, § 1900.150. Applicants for these

licenses must meet certain minimum qualifications, Ill. Admin. Code tit. 11, § 1900.520, and

submit to an application process that is governed by the IGB, Ill. Admin. Code tit. 11, § 1900.620.

An applicant for an Illinois license must make substantial disclosures of records to the IGB and

complete thorough background checks.

40. SBA members possess “management services provider licenses” from the State to

operate sports wagering in Illinois. These management services provider licenses allow SBA

members to contract with casino partners who are “master sports wagering licensees” (a separate

license) under the Sports Wagering Act to do business in Illinois. In general, the management

services providers, such as SBA members, manage sports wagering operations, and creating and

maintaining the online sportsbook platform. The license and application fee for a management

services provider license is $1,000,000, with a renewal fee of $500,000 due to the IGB every four

years.

41. State Taxes on Gross Receipts. In addition to these licensing fees, Illinois also

taxes SBA members’ monthly “adjusted gross sports wagering receipts” (“AGSWR”), which the

12
 Sports Wagering Act defines as “a master sports wagering licensee’s gross sports wagering

receipts, less winnings paid to wagerers in such games.” 230 ILCS 45/25-10. AGSWR is
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

equivalent to an SBA member’s net income from sports wagering operations in Illinois. Illinois

taxes SBA members’ AGSWR based on graduated scale that reaches 40%. A significant portion

of the AGSWR for certain SBA members is taxed at the top 40% rate.

42. Consistent with the Illinois Constitution, the State expressly reserved for itself the

authority to tax AGSWR for the purposes of raising revenue for certain home rule units’ operations

under the Sports Wagering Act. That statute provides that “the State shall impose and collect 2%

of the adjusted gross receipts from sports wagers that are placed within a home rule county with a

population of over 3,000,000 inhabitants, which shall be paid, subject to appropriation from the

General Assembly, from the Sports Wagering Fund to that home rule county for the purpose of

enhancing the county’s criminal justice system.” 230 ILCS 45/25-90(a-5).

43. Cook County, which includes the City of Chicago, is the only home rule county

with over 3 million inhabitants. Thus, Illinois collects a supplemental 2% tax on SBA members’

AGSWR for sports wagers placed in Cook County and remits those tax revenues to the County.

44. Simply put, the 2% Cook-County-specific tax, was statutorily created by the State,

is collected by the State, and is paid by the State to Cook County. This demonstrates a clear

statutory framework whereby Illinois decides how much sports wagering is taxed state-wide and

in any home-rule units such as Cook County or Chicago. Through the Chicago Ordinance

Amendments, the City of Chicago seeks to improperly impose an additional 10.25% tax on top of

the Illinois-wide tax of up to 40%, and the Cook County Supplement of 2%, on AGSWR.

45. Additional State Taxes on Online Sports Wagering. In 2025, Illinois amended

the Sports Wagering Act to implement an additional tax on each and every online sports wager

13
 made in Illinois. In addition to paying the State up to 42% of their AGSWR, SBA members must

pay 25 cents per wager for the first 20 million online wagers placed that year and 50 cents per
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

wager for all additional online wagers beyond the initial 20 million. 230 ILCS 45/25-90(d-7).

46. Several SBA members have either passed the costs of these per-wager taxes

through to their customers or imposed minimum betting limits, resulting in a year-over-year

decrease in the number of legal sports wagers placed online in the State. The Illinois Gaming

Board reported a decline of over twelve million wagers placed online in the State in September

and October of 2025, compared to September and October 2024.

47. The State of Illinois derives additional revenue from bettors’ payment of income

taxes on winnings from online sports betting. SBA members help facilitate assessment and

collection of this State revenue. By contrast, this system is not possible for illegal, black-market

online or in-person sports betting operations, which often are able to evade the detection or reach

of state regulators and tax authorities, and enable their customers to evade their state income tax

obligations as well.

B. The Chicago Ordinance Amendments

48. On December 20, 2025, just 11 days prior to the December 31 budget deadline (just

seven business days accounting for the Christmas holiday), the Chicago City Council passed an

alternative budget with a revenue plan that amended Chicago’s municipal code. The amendments

include the new Chicago Ordinance Amendments, which, according to the City’s discussions with

the SBA, the City interprets as bringing all online sports betting in Chicago under the City’s

licensing and taxing authority for the first time. No other municipality in the country imposes its

own licensing and taxing regime on online sports betting on top of a state’s; the City’s is the first

of its kind.

14
 49. The City has notified the SBA and its members that it will enforce the Chicago

Ordinance Amendments against all operators that accept online sports bets within the City of
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

Chicago, and that it understands them to require operators to obtain City-level licenses under

Section 4-156-962. That reading of the Chicago Ordinance Amendments is untenable and at odds

with the plain language of the ordinance.

50. The Chicago Ordinance Amendments now include “online sports wagering

operators” in a section listing persons that cannot “conduct sports wagering at a physical location”

in Chicago or conduct “related mobile sports wagering permitted under the Sports Wagering Act

as a result of [the operator] being physically located in the City” without requiring City-level

licenses. Effective January 1, the amended Ordinance provides:

License Required. It shall be unlawful for any person to conduct

sports wagering at a physical location in the City of Chicago,
including related mobile sports wagering permitted under the Sports
Wagering Act as a result of such person being physically located in
the City of Chicago, unless such person: (1) is an owners licensee,
organization licensee, sports facility or its designee, an online
sports wagering operator, or a management services provider of
such person, and (2) holds all necessary licenses under the Sports
Wagering Act, and (3) holds valid City licenses including a primary
sports license and, if applicable, necessary secondary sports
licenses.

Chi. Mun. Code, § 4-156-962 (emphasis added, reflecting the Chicago Ordinance Amendment

revisions).

51. The City of Chicago has recently stated that it will apply this provision as requiring

a license from any entity that accepts online sports wagers from customers located in the City.

This interpretation is groundless.

52. The Chicago Ordinance Amendments do not require sports wagering operators to

obtain licenses based on the location of their customers. The Ordinance’s plain text requires

sportsbook operators to obtain a City license only if they have a “physical presence” in Chicago

15
 or conduct online sports wagering “related to” and “as a result of” that physical presence in the

City. Simply put, the touchstone of the licensing requirement is whether an operator has a physical
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

location in the City and is providing online sports wagering tied to that physical location, not where

the operator’s customers are located. Under the plain language of the Chicago Ordinance

Amendments, a sports betting operator with no physical presence in the City is not subject to the

license requirement, even if it accepts online sports wagers customers from located in Chicago.

While the plain text is clear, the City’s contrary position—that the Chicago Ordinance

Amendments’ licensing requirement depends on the location of the customer—has no support.

53. With only one exception, the SBA members have no physical location in Chicago.

And the sole SBA member with a physical location in the City (DraftKings Wrigley) only accepts

in-person betting at that location through its affiliate Northside Crown Gaming LLC. By contrast,

all of DraftKings’ online sports betting across Chicago and throughout Illinois is through its

licensed affiliate Crown IL Gaming LLC, which conducts no in-person betting in Chicago. In

short, no DraftKings entity accepts online sports wagering in Chicago “related to” or “as a result

of” that single physical retail location in Chicago and thus the Chicago Ordinance Amendments

do not apply.

54. The Ordinance provides for two types of municipal licenses: a “primary sports

license,” which the Ordinance states is required for master sports wagering licensees (entities that

SBA members partner with pursuant to the Illinois framework); and a “secondary sports license,”

which the Ordinance states is required for management services providers (SBA member entities).

Chi. Mun. Code, §§ 4-156-960, 4-156-962. Thus, to continue doing business in Chicago under

the Chicago Ordinance Amendments as interpreted by the City, both SBA members and their

16
 Illinois master sports wagering licensee partners must obtain secondary and primary municipal

licenses, respectively.
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

55. Under the City’s Municipal Code, primary sports licenses cost $50,000 for the

initial year and $25,000 for each subsequent year. Secondary sports licenses cost $10,000 for the

initial year and $5,000 for each subsequent year. These license fees are higher than any other

license fees the City imposes for any other types of business. Chi. Mun. Code, § 4-5-010.

56. The Chicago Ordinance Amendments do not impose any regulatory requirements

on licensees with respect to online sports wagering conduct beyond those required by the State for

the corresponding State licenses. The City’s licensing requirement exists only to raise revenue.

57. Unlike the Sports Wagering Act or other state-level licensing frameworks across

the country, the Chicago Ordinance Amendments provide no rubric, timeline, application or

requirements relating to the licensing process. See generally Chi. Mun. Code, § 4-156-960 et seq.

58. Although the Chicago Ordinance Amendments do not textually require SBA

members to obtain new licenses by January 1, and although the City of Chicago has no basis to

impose a new municipal-level license, SBA members have attempted to cooperate with the City’s

interpretation of the Chicago Ordinance Amendments and obtain requisite licenses by January 1,

2026. These efforts have included meeting with the Mayor and sending his office a December 18,

2025 letter urging it to “develop a cogent licensing framework” and provide a reasonable

timeframe by which SBA members can “understand the requirements, prepare and submit

complete applications, and obtain the necessary City licenses prior to enforcement.” 2 The SBA’s

December 18 letter explained that although the Chicago Ordinance Amendments “would impose

2
https://www.sportsbettingdime.com/app/uploads/2025/12/IL_SBA-Ltr-Mayor-
Johnson_12.17.25-1.pdf (last accessed December 29, 2025).

17
 a City licensing requirement effective January 1, 2026, [] the City does not currently have a

licensing rubric” to apply, and that “[i]n the absence of defined terms, application standards,
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

required documentation, and administrative procedures, operators would have no meaningful way

to comply with the ordinance upon its effective date.” Id.

59. After the City Council passed the alternative budget passing the Chicago Ordinance

Amendments licensing requirement for online sports wagering, the SBA made further outreach to

the City to attempt to obtain licenses ahead of January 1. Despite prior assurances that licenses

could and would be issued on December 29, 2025, as of the time of filing this Complaint, the City

of Chicago has not issued the required municipal license to any SBA member or to its master

license holder. Nor has the City provided a formal determination as to whether any SBA member

will receive a City license for online sports wagering by the December 31, 2025 deadline.

60. The SBA and its members have used every available day since the Chicago

Ordinance Amendments’ passage in a concerted effort to avoid irreparable injury by securing

licenses from the City or delaying their implementation. But those efforts have been unsuccessful,

putting the SBA members in jeopardy of either violating the Ordinance, as interpreted by the City,

after midnight on New Year’s Eve, or ceasing online sportsbook operations within the City

entirely.

61. Moreover, the Chicago Ordinance Amendments impose a new tax on sports

wagering operators which accept any online wagers placed within the City, like SBA members

(assuming they are both required and able to obtain licenses). The ordinance provides:

Tax Imposed. There is hereby imposed a tax on each primary sports

licensee operating in the City. The rate of the tax shall be 10.25% of
the adjusted gross sports wagering receipts from sports wagers that
are placed within the City:

18
 (1) at, or within a 5-block radius of, any of the following: a casino
facility, race track facility, or sports facility where sports
wagering is allowed under Section 4-156-968; or
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

(2) over the internet or through a mobile application as allowed

under Section 4-156-968 and verified as having been placed
within the City utilizing the internet wagering system
requirements provided in Section 1900.1430 of the Sports
Wagering Rules and the sports wagering system requirements
provided in Section 1900.1450 of the Sports Wagering Rules.

Chi. Mun. Code, § 4-156-973 (eff. Jan. 1, 2026). These taxes are “due and payable to the

Department of Finance no later than the 15th day of the month following the calendar month in

which the adjusted gross sports wagering receipts were received and the tax obligation was

accrued.” Chi. Mun. Code, § 4-156-974.

62. The Chicago Ordinance Amendments adopt this Illinois statutory definition of

AGSWR: “a master sports wagering licensee’s gross sports wagering receipts, less winnings paid

to wagerers in such games.” Chi. Mun. Code, § 4-156-960; 230 ILCS 45/25-10.

C. The Chicago Ordinance Amendments are Unconstitutional

63. Separately and independently, the Defendants cannot enforce the Chicago

Ordinance Amendments because their licensing and tax requirements are unconstitutional. The

Illinois Constitution specifically reserves certain essential state powers from being exercised by

home-rule units unless specifically authorized by the General Assembly.

A home rule unit shall have only the power that the General
Assembly may provide by law (1) to punish by imprisonment for
more than six months or (2) to license for revenue or impose taxes
upon or measured by income or earnings or upon occupations.

Ill. Const., art. VII, § 6(e).

64. The Chicago Ordinance Amendments’ City-level licensing requirement is a

“license for revenue” within the meaning of Section 6(e). The Illinois General Assembly has never

granted the City the power to license online sports wagering for revenue.

19
 65. The Chicago Ordinance Amendments’ 10.25% tax on SBA members’ AGSWR is

levied “upon or measured by” SBA members’ “income or earnings” within the meaning of Section
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

6(e). But the Illinois General Assembly has never granted the City the power to tax sports

wagering income or revenue.

66. Indeed, the Sports Wagering Act, 230 ILCS 45/25 and the Illinois Gambling Act,

230 ILCS 10, which the Sports Wagering Act incorporates, are the Illinois statutes that address

licensing, regulation, and taxation of online sports wagering revenues. Neither confers any

authority on any county or municipality to impose its own local licensing requirements or taxes of

its own.

67. Notably, the Sports Wagering Act evidences the General Assembly’s intention with

regard to taxation and home rule units. It does not grant authority to any home rule unit to impose

or administer its own taxes on any type of sports wagering. Instead, it imposes a single 2% tax for

wagers placed in Cook County (and any other home rule county that may reach the certain

population threshold in the future), to be imposed by the State and directed to “from the Sports

Wagering Fund to that home rule county for the purpose of enhancing the county’s criminal justice

system.” 230 ILCS 45/25-90(a-5). This demonstrates that the General Assembly did not intend

for home rule units to impose their own licensing or taxation regimes on top of the State’s.

68. The Chicago Ordinance Amendments will push Chicago residents who, since as

early as 2020, have participated in online sports wagering legally to turn to available illegal online

sports wagering options. And they will deprive the State and City of tax revenues from legal online

sports wagering in Chicago, as well as from bettors’ winnings on such wagering.

69. Recognizing this, in November 2025, a group of 29 Illinois lawmakers urged the

City Council not to pass the then-proposed City tax on online sports betting, calling it “a flawed

20
 policy that sets a poor precedent, provides minimal fiscal benefit, and reflects the ongoing

communication gap that must be addressed if the City and the State are to move forward effectively
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

together” and explained that it “could open the door for a patchwork of local taxes in other state-

controlled policy areas, making enforcement and compliance nearly impossible” instead of

providing a “legally sound” proposal that “algin[s] with existing state frameworks[.]” 3 The State

legislators further explained:

To layer an additional municipal tax on top of [the

State’s] … creates an outsized regulatory and administrative burden
with minimal fiscal impact. From a policy standpoint, the proposal
is deeply problematic. The Illinois General Assembly has already
increased the state’s sports-betting tax twice in consecutive years—
first from a flat 15 percent to a tiered rate as high as 40 percent, and
then by adding a per-wager assessment. Illinois now has one of the
highest sports-betting tax burdens in the nation. 4

70. The Chicago Ordinance Amendments threaten the progress made by the SBA, its

members, and the State of Illinois in addressing the scourge of illegal, unregulated, and untaxed

online sports wagering in the state.

* * *

71. For the foregoing reasons, Plaintiff is entitled to declaratory judgments that the

Chicago Ordinance Amendments’ licensing and tax requirements violate Section 6(e), Article VII

of the Illinois Constitution. Plaintiff is also entitled to injunctive relief preventing the enforcement

of the City’s aforementioned licensing and tax requirements.

3
https://resources.sbcamericas.com/sbcamericas/2025/11/FILE_2868.pdf (last accessed Dec.
29, 2025).
4
Id.

21
 COUNT I – DECLARATORY JUDGMENT
Pursuant to 35 ILCS 5/2-701
For Lack of Authorization Under Chi. Mun. Code, § 4-156-962
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

72. Plaintiff repeats and incorporates by reference each of the allegations set forth in

paragraphs 1-71 as if fully set forth herein.

73. The City has told representatives of SBA and of SBA members that, as of January

1, 2026, it will apply Chi. Mun. Code § 4-156-962, as amended, as requiring Plaintiff’s members

to obtain municipal licenses to continue providing online sports wagering in Chicago.

74. But Chi. Mun. Code § 4-156-962 does not require all SBA members to obtain

municipal licenses. SBA members that do not have a “physical location” in Chicago or do not

provide online sports wagering that is “related” to and “as a result of” their being physically located

in the City are not obligated to obtain municipal licenses.

75. An actual controversy exists between the parties regarding the issues set forth

hereinabove.

76. This Court is empowered, pursuant to 735 ILCS 5/2-701, to declare the rights of

Plaintiff’s members.

77. Plaintiff is entitled to declaratory and injunctive relief, as requested below.

COUNT II – DECLARATORY JUDGMENT

Pursuant to 35 ILCS 5/2-701
For Violation of Ill. Const., art. VII, § 6(e)

78. Plaintiff repeats and incorporates by reference each of the allegations set forth in

paragraphs 1-71 as if fully set forth herein.

79. Article VII, Section 6(e) of the Illinois Constitution prohibits a home rule unit, such

as the City of Chicago, from imposing a license for revenue unless the Illinois General Assembly

has provided that home rule unit with that power.

22
 80. The City of Chicago’s January 1, 2026 amendments to section 4-156-960 et seq. of

the City of Chicago Municipal Code establish a license for revenue with respect to online sports
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

wagering.

81. The State of Illinois has never provided by law that the City of Chicago may

establish a license for revenue with respect to online sports wagering.

82. The City of Chicago’s January 1, 2026 amendments to section 4-156-960 et seq. of

the City of Chicago Municipal Code thus violate Section 6(e) of Article VII of the Illinois

Constitution.

83. An actual controversy exists between the parties regarding the issues set forth

hereinabove.

84. This Court is empowered, pursuant to 735 ILCS 5/2-701, to declare the rights of

Plaintiff.

85. Plaintiff is entitled to declaratory and injunctive relief, as requested below.

COUNT III – DECLARATORY JUDGMENT

Pursuant to 35 ILCS 5/2-701
For Violation of Ill. Const., art. VII, § 6(e)

86. Plaintiff repeats and incorporates by reference each of the allegations set forth in

paragraphs 1-71 as if fully set forth herein.

87. Article VII, Section 6(e) of the Illinois Constitution prohibits a home rule unit from

imposing a tax on income, earnings, or occupation unless the Illinois General Assembly has

provided the City of Chicago with that power.

88. The City of Chicago’s January 1, 2026 amendments to section 4-156-960 et seq. of

the City of Chicago Municipal Code establish a 10.25% tax on income, earnings, or occupation

with respect to online sports wagering.

23
 89. The State of Illinois has never provided by law that the City of Chicago may

establish a tax on income, earnings, or occupation with respect to online sports wagering.
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

90. The City of Chicago’s January 1, 2026 amendments to section 4-156-960 et seq. of

the City of Chicago Municipal Code thus violate VII, Section 6(e) of the Illinois Constitution.

91. An actual controversy exists between the parties regarding the issues set forth

hereinabove.

92. This Court is empowered, pursuant to 735 ILCS 5/2-701, to declare the rights of

Plaintiff.

93. Plaintiff is entitled to declaratory and injunctive relief, as requested below.

Prayer for Relief

WHEREFORE, Plaintiff requests that the Court:

A. Declare that the City of Chicago’s licensing requirement for sports wagering operators,
Chi. Mun. Code § 4-156-962, as amended and effective January 1, 2026, does not
require persons who conduct online sports wagering in the City of Chicago, and who
lack a physical presence in the City of Chicago or only conduct online sports wagering
unrelated to their physical presence in the City of Chicago, to obtain municipal licenses;

B. Enter relief restraining Defendants from enforcing the City of Chicago’s licensing
requirement for sports wagering operators, Chi. Mun. Code § 4-156-962, as amended
and effective January 1, 2026, during the pendency of this action;

C. Declare that the City of Chicago’s licensing requirement for sports wagering operators,
Chi. Mun. Code § 4-156-962, as amended and effective January 1, 2026, violates
Section 6(e) of Article VII of the Illinois Constitution;

D. Declare that the City of Chicago’s 10.25% tax on sports wagering operators’ adjusted
gross sports wagering receipts from all online sports wagers placed within the City,
Chi. Mun. Code § 4-156-973, as amended and effective January 1, 2026, violates
Section 6(e) of Article VII of the Illinois Constitution;

E. Enter a permanent injunction enjoining Defendants from enforcing the City of

Chicago’s licensing requirement, Chi. Mun. Code § 4-156-962, as amended and
effective January 1, 2026, against sports wagering operators that lack a physical

24
 presence in the City of Chicago or only conduct online sports wagering unrelated to
their physical presence in the City of Chicago;
FILED DATE: 12/30/2025 10:25 AM 2025CH12984

F. Enter a permanent injunction enjoining Defendants from enforcing the City of

Chicago’s 10.25% tax sports wagering operators’ adjusted gross sports wagering
receipts from all online sports wagers placed within the City, Chi. Mun. Code § 4-156-
973, as amended and effective January 1, 2026;

G. Award Plaintiff any license fees or other taxes paid under Chi. Mun. Code §§ 4-156-
962 and -973, as amended.

H. Award such further relief as the Court deems just and proper.

Dated: December 30, 2025 Respectfully submitted,

/s/ Gabor Balassa

Gabor Balassa, P.C. (ARDC No. 6242469)
Madelyn A. Morris (ARDC No. 6340655)
Michael K. Sciaccotta (ARDC No. 6324625)
KIRKLAND & ELLIS LLP
Firm ID No. 90443
333 West Wolf Point Plaza
Chicago, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
[email protected]
[email protected]
[email protected]

David Foster, P.C. (DC No. 984393) (pro hac

vice forthcoming)
KIRKLAND & ELLIS LLP
1301 Pennsylvania Avenue, N.W.
Washington DC 20004
Telephone: (202) 389-5000
Facsimile: (202) 389-5200
[email protected]

Attorneys for Plaintiff

25
 Docusign Envelope ID: FC98B771-7815-4D9C-B328-A3EC59CD0EB8

VERIFICATION BY CERTIFICATION PURSUANT TO SECTION 1-109

FILED DATE: 12/30/2025 10:25 AM 2025CH12984

Under penalties as provided by law pursuant to Section 1-109 of the Code of Civil

Procedure, the undersigned certifies that the statements set forth in this instrument are true and

correct, except as to matters therein stated to be on information and belief and as to such matters

the undersigned certifies as aforesaid that he verily believes the same to be true.

DATED: December 29, 2025

______________________________

JEREMY KUDON
Chairman, Sports Betting Alliance