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Illinois to Raise Sports Betting Tax to Pay for 'Migrant Crisis'

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Illinois' gambling industry has been a significant source of tax revenue for the state, contributing almost $2 billion in the previous fiscal year. Now, with an increase in sports betting taxes, Illinois hopes to collect even more to address various issues, including what Governor J.B. Pritzker has termed a "migrant crisis."

Sports Betting Costs Increase in Illinois

Pritzker recently unveiled a $52.7 billion state spending plan, which includes additional funding for addressing the migrant crisis, education, and quantum computing. To help close the budget gap, Pritzker has proposed tax increases, with a significant hike in sports betting taxes.

Related: Vote to Raise Taxes for New Illinois Casino on the Table

Previously, Pritzker's budget office had projected a nearly $900 million shortfall. However, the deficit is now smaller than anticipated, and the state is looking at new revenues to bridge the gap. One of the key proposals is to more than double the sports wagering tax, from 15% to 35%, generating an estimated $200 million in additional revenue. This tax is paid by casino sportsbooks, which generated $143 million in tax revenue for Illinois in fiscal year 2023.

The revenue from sports betting hasn't changed much over the past few years. However, data shows that almost $50 million of the tax revenue from fiscal year 2022 was from licensing and administrative fees.

Records show that bettors placed almost 305 million bets in Illinois on various sporting events during fiscal year 2023. The sports betting handle for Illinois for the fiscal year was $10.4 billion, but they earned just $948 million.

In addition to the sports betting tax hike, Pritzker is also proposing to cap a deduction that allows corporations to reduce their taxable income, which is expected to save the state $526 million.

Blaming it on Texas

Funding for asylum seekers is a contentious issue in the budget talks, with House Speaker Emanuel Welch establishing a committee on newcomers and Republicans advocating for sanctuary laws. Illinois has allocated $638 million to tackle this issue.

Cook County's financial support plan has allocated an extra $182 towards aiding immigrants. These funds are designated for the welcome center initiative, which encompasses housing, legal aid, and programs to prevent homelessness.

Chicago has struggled to accommodate and support almost 36,000 asylum seekers who have come since 2022, with the city budgeting around $150 million for their needs. The decrease in immigration is linked to climate issues and is happening at the same time as a reduction in available land.

Texas Governor Greg Abbott called for federal action as Illinois Governor Pritzker pointed fingers at the government for causing hardships for families. Pritzker's concerns arise amidst immigration gaining significance in the upcoming presidential election and with Chicago gearing up to hold the Democratic National Convention in August.

The proposed tax has sparked concerns among Republicans and business organizations, such as the Chicagoland Chamber of Commerce. They believe that Pritzker is favoring non-U.S. citizens over American citizens.

The Governor's budget proposal ALSO allocates $500 million towards advancing computing technology, with additional funding set aside for cryogenics equipment.

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