Illinois Records $2.7 Billion Gambling Tax Revenue Amid Legal Defeat
Illinois collected record gambling tax revenue while a federal judge blocked the state from regulating prediction markets as gambling entities.
The state of Illinois collected a record $2.7 billion in gambling-related tax revenue last fiscal year, marking a 19.2% increase over the previous year and a 90% rise since 2019. A report from the Commission on Government Forecasting and Accountability identified video gambling machines as the primary revenue driver, generating over $1 billion. Sports wagering emerged as the fastest-growing sector, with $15 billion wagered in 2026.
This revenue growth coincided with significant losses for bettors, who lost nearly $8 billion total. Parlay bets were particularly costly, accounting for over 60% of all sports betting losses at $879 million. Adam Hoffer of the Tax Foundation noted the state's contradictory position, suggesting Illinois wants to discourage gambling activity while relying on it as a revenue source.
Parallel to these financial gains, the state suffered a legal setback regarding prediction markets. U.S. District Judge Martha Pacold issued a preliminary injunction blocking the Illinois Gaming Board from regulating platforms like Kalshi and Polymarket as gambling entities. The judge ruled that these markets are likely financial swaps regulated by the Commodity Futures Trading Commission under the Commodity Exchange Act rather than state gambling laws.
