The significant revenue initiative is the proposed overhaul of the way the state taxes table games at Illinois casinos. Currently, the state taxes these games on a simple two-tier schedule, but the FY2027 plan would align tables with the state’s progressive slot tax framework. This means the tax cap would rise to 50% for higher-grossing properties.
Industry coverage of the story indicates the change would affect all Illinois casinos outside of Chicago, while the Chicago casino operates on a different model.
The Revenue Target And The Broader Pattern
According to the published information regarding the proposed plan, the principle is similar to the slots structure. That is, the rate would start 15% and go up in steps to 50% as the adjusted gross revenue surpasses the $200 million mark. The governor’s office has proposed that the change will bring in an additional revenue of about $120 million annually. Media reports suggest that the money will go to the Education Assistance Fund.
This development is in line with the recent Illinois trend of using gambling taxation to achieve its budgetary goals. The media report on the FY2027 package mentions the recent changes in the taxation of sports betting in 2024 and 2025.
The Proposal Is Not Only About Taxes
The budget proposal also contains a structural regulatory change. That’s the establishment of a consolidated gaming authority, the Illinois Department of Gaming Regulation and Enforcement, through the merger of the Illinois Gaming Board and the Illinois Racing Board. The new department is supposed to regulate casinos, racinos, VGTs, horse racing, and sports wagering, with 297 funded positions in the new structure.
A separate budget measure would not change the VGT tax rate. However, it would direct 10% of the revenue from VGT, which is about $92 million, to a new State Facilities Repair and Maintenance Fund.
iGaming Remains the Larger Strategic Question
Although the FY2027 plan is more concerned with land-based and VGT revenue mechanics, Illinois has an Internet Gaming Act bill pending in the state. The Illinois General Assembly page for HB3080 shows that Rep. Edgar González, Jr. is a sponsor of this bill and that it includes a 25% privilege tax on internet gaming revenue. However, this bill has been re-referred to Rules in 2025.
The current budget package strengthens the trend that is familiar in Illinois: to extract more value from the current tax collection mechanisms in gaming before engaging in the politics involved in the legalization of iGaming.
If the budget is approved in the state, the effect would be felt first in the land-based casino economics and enforcement. With regard to iGaming, the budget proposal primarily provides context because the legislature would be looking to address a budget deficit through the existing channels first, which could delay online casino debates.
