Illinois lawmakers concluded an overnight legislative session on Monday, June 1, passing a $56 billion budget for fiscal year 2027 that incorporates new taxes on businesses and digital platforms while keeping overall spending below Gov. JB Pritzker’s February proposal. Senate Democrats framed the plan as a necessary response to federal cuts and economic uncertainty, with budget leader Elgie Sims of Chicago noting, “We are not acting on fear. We are acting responsibly.”
The budget includes an $830 million supplemental allocation for the current fiscal year, effectively keeping next year’s spending flat. Gov. Pritzker described the budget as placing the state in “the strongest position in decades” and highlighted that Illinois has maintained a balanced budget for eight consecutive years.
To navigate partisan differences, Democrats tempered progressive revenue ambitions, such as additional taxes on large corporations and billionaires. Instead, the budget freezes corporate net operating loss deductions and imposes taxes on social media platforms, digital assets, fantasy sports, tobacco, and prediction market betting.
Gaming Taxes and New Licensing Framework
A notable addition to the budget is a set of taxes and regulatory measures targeting Illinois’ growing digital gaming market. Senate Bill 3019 amends the Sports Wagering Act to include “exchange wagers,” covering contracts traded on prediction markets. Each exchange wager is taxed at 1.75%, rising to 3.5% after five million wagers by a single operator.
Fantasy sports operators are also now under a formal licensing system. Small operators serving up to 7,500 patrons pay $500 for a two-year license, while larger platforms pay $7,500. All DFS operators must remit a 15% tax on adjusted gross receipts and implement age verification, geolocation controls, anti-money laundering procedures, and identity verification. DraftKings, FanDuel, and Underdog are among the largest providers affected.
The state anticipates these measures could generate roughly $65 million in additional revenue, though the precise impact depends on compliance and the outcome of ongoing legal disputes. The Commodity Futures Trading Commission (CFTC) is currently challenging Illinois’ regulation of federally regulated prediction market operators, including Kalshi, Robinhood, and Crypto.com. Previous lawsuits in Minnesota and other states suggest further litigation may arise.
Funding, Relief Measures, and Fiscal Concerns
Alongside gaming taxes, the budget includes adjustments designed to ease the impact on residents. According to ABC7 Chicago, a 1.3-cent gas tax increase slated for July has been postponed until January, and a sales tax holiday for school supplies is scheduled from August 7–16. Funding for local governments remains stable, and K–12 education will receive allocations via the Evidence-Based Funding model, though districts must forgo property tax increases for three years to benefit.
Additional spending initiatives include a $400 one-time payment under the Families Receiving Emergency Support for Hunger (FRESH) program for residents affected by SNAP benefit changes. Healthcare programs for seniors without legal U.S. status are allocated $143 million, while $4 million is directed to immigrant welcoming centers.
Critics from both parties raised concerns about the reliance on fund sweeps and potential hidden costs. Bryce Hill of the Illinois Policy Institute emphasized that consumers ultimately bear the burden of new taxes, while fiscal watchdogs warned that future federal cuts could exacerbate pension and budgetary pressures.