If Illinois were to legalize sports betting through the Sports Wagering Act proposed last year, net revenues for the gaming industry would increase by $400 million and about 1,800 new jobs would be created at between 30 and 75 licensed locations. The proposed bills would also raise state tax revenue by between $50 million and $120 million per year. However, due to relatively high tax rates, the proposals in the Illinois General Assembly would result in nearly half of all sports betting activity remaining in the black market. In this report, the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign, evaluates several proposals to legalize, regulate, and tax sports betting. If the General Assembly chooses to move forward on this concept, a balanced framework that combines the United Kingdom’s 15 percent tax on gross gambling revenues, a $100,000 annual license fee for sports books and related establishments, and a small 0.05 percent “integrity fee” on wagers to ensure compliance and prevent fraudulent activity may offer a way forward.