Illinois’ FY2027 budget proposes higher casino table game taxes, a new consolidated gaming regulator, and a shift of VGT revenue as the state continues to lean on gambling to close fiscal gaps.
Illinois Governor JB Pritzker’s proposed Fiscal Year 2027 budget aims to reshape the state’s gaming framework on multiple fronts, including a significant increase in casino table game taxes, creation of a new gambling regulator, and a reallocation of video gaming terminal (VGT) revenue.
To be enacted, the changes must be approved by the state legislature, which must approve a budget.
Casino Table Games to Be Taxed Like Slots
Pritzker proposes to restructure the tax rate on casino table games at the state’s 15 non-Chicago casinos. Currently, table games, such as blackjack, roulette, and poker, are taxed under a two-tier model: 15% on adjusted gross revenue (AGR) up to $25 million and 20% on AGR above that threshold.
By contrast, electronic gaming devices (slots) are taxed under a progressive structure ranging from 15% on the first $25 million, up to 50% on AGR above $200 million. Pritzker’s FY2027 budget would align the table game tax with the slots tax, meaning higher-grossing casinos could face rates of up to 50%.
The governor’s office estimates the change would generate approximately $120 million in annual tax revenue.
Notably, the proposal applies only to non-Chicago casinos. Bally’s Chicago temporary casino (and future permanent facility) operates under a separate tax structure.
Creation of a Consolidated Gaming Regulator
The FY2027 budget also proposes creating a new consolidated regulator: the Illinois Department of Gaming Regulation and Enforcement (IDGRE). The new agency would absorb the Illinois Gaming Board and Illinois Racing Board, overseeing casinos, racinos, VGTs, horse racing, and sports wagering.
The budget funds 297 positions under the new structure. It frames the consolidation as a way to improve efficiency, compliance, and enforcement capacity.
VGT Revenue Redirected
The budget also reallocates VGT revenue without changing the 35% tax rate.
Currently, the state’s portion is deposited into the Capital Projects Fund. Under FY2027, 10% of VGT receipts—estimated at approximately $92 million—would be redirected to a newly created State Facilities Repair and Maintenance Fund.
Another Gambling Tax Increase
The proposed table game overhaul fits within a broader pattern in Illinois of raising gambling taxes to support state revenue needs.
In 2024, Illinois replaced its flat 15% tax on sports betting revenue with a graduated tier. The new structure ranges from 20% to 40%, depending on annual adjusted gross revenue.
Then, in 2025, lawmakers approved a new per-bet tax on every sports wager. Beginning July 1, sportsbooks began paying $0.25 per wager for the first 20 million bets, and $0.50 per wager thereafter. The measure drew criticism from operators, who introduced either a surcharge or minimum bet requirements to offset costs.
Data from the Illinois Gaming Board also suggests that the per-bet tax has contributed to fewer bets in the state. Between September 2025 and December 2025, Illinois bettors placed 27.6 million fewer wagers than in the same period the previous year. As a result, earlier this month, lawmakers introduced a bill to repeal the tax.
Furthermore, as part of its FY2026 budget, Chicago implemented a 10.25% municipal sports betting tax to raise revenue and close its budget gap.
Could iGaming Fill Another Gap?
With Illinois increasingly relying on gambling as a fiscal lever, attention could eventually turn to online casinos (iGaming).
While there have been efforts to legalize iGaming in Illinois, and Pritzker has signaled openness for budget purposes, lawmakers have shown little interest. That has not stopped State Rep. Edgar Gonzalez Jr. from introducing another proposal this year.
The Internet Gaming Act allows up to three skins per licensee and a 25% tax on annual revenue. Supporters have argued that iGaming could generate hundreds of millions annually.
For context, in Pennsylvania, which has a slightly higher population, online casinos generated approximately $3.4 billion in annual revenue. Meanwhile, in Michigan and New Jersey, both with lower populations than Illinois’, the sector generated around $3 billion.
Applying the 25% tax rate, similar performance in Illinois could bring the state around $700-$800 million annually once the market matures.
However, previous iGaming efforts have stalled amid concerns about retail cannibalisation and gambling addiction. There are no indications whether lawmakers will show interest this year either.
Gambling as a Budget Instrument
Illinois’s FY2027 proposal reinforces a clear fiscal strategy.
Rather than raising income or sales taxes, lawmakers have repeatedly turned first to gambling when addressing budget pressure:
- Sports betting tax restructure (2024)
- Per-wager levy (2025)
- Chicago municipal tax (2026)
- Table game restructuring (FY2027 proposal)
- VGT revenue redirection (FY 2027 proposal)
The $120 million projected from the table game adjustment underscores how central regulated gaming has become to Illinois’ fiscal structure.
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