Chicago’s Sports Betting Stalled

Measure to Allow Sports Betting at Chicago Pro-Sports Arenas Remains Stalled Despite Mayor’s Backing

From WTTW, “A measure that would allow five of Chicago’s professional sports teams let fans place bets at their home arenas and during games stalled again Tuesday despite the support of Mayor Lori Lightfoot, amid concerns that it could kneecap long-delayed efforts to build a casino in Chicago.

With Lightfoot’s backing, the revised measure that was up for a vote Tuesday would impose a 2% tax on gross revenues from sports betting in Chicago. Those revenues are already subject to a 15% state tax and a 2% Cook County tax.

Ald. Walter Burnett (27th Ward), whose West Side ward includes the Chicago Bulls’ United Center, called the proposal a “no brainer” that would spur economic development.

“A bird in the hand is worth two in the bush,” Burnett said. “We will start getting money immediately with the sports facilities, rather than waiting on a casino to be built.”

But four of the mayor’s closest allies on the Chicago City Council objected to the plan, saying the 2% tax was not enough to offset concerns that allowing the Bears, Cubs, White Sox, Blackhawks and Sky to operate sportsbook operations on their home turf would cannibalize revenue set to be generated by a Chicago casino.

Allowing Chicago’s pro-sports teams would add between $400,000 to $500,000 to Chicago’s coffers annually, according to an analysis presented by Connor Brashear, the chief of staff to Chief Financial Officer Jennie Huang Bennett. The teams could realize gross revenues of $20 million to $25 million, according to a study commissioned by the city authored by Union Gaming’s Grant Govertsen.

“It seems like peanuts for an industry that is growing,” said Ald. Pat Dowell (3rd Ward).

Ald. George Cardenas (12th Ward), the mayor’s deputy floor leader, said the city should require firms owned by Black, Latino and female Chicagoans be involved in the sportsbook construction and operations.

“I just want my colleagues to understand in dollars and cents, five owners who are very wealthy are going to get even wealthier, without having a direct impact on minorities,” Cardenas said.

Govertsen’s study of the impact of sportsbook operations at Chicago’s pro-sports stadiums found it was “perfectly compatible” with a casino, Brashear said. 

However, Ald. Brendan Reilly (42nd Ward) said the members of the Chicago City Council should have a chance to review that study before casting a vote, warning that alderpeople could come to regret a hasty vote without reviewing important information like they did in 2009 when the City Council voted to lease the city’s parking meters to a private company in a much-loathed deal.

Opponents of the measure warned that greenlighting sports betting lounges at Wrigley Field, United Center, Wintrust Arena, Solider Field and Guaranteed Rate Field would stunt the growth of a casino-resort that city officials have long counted on to put Chicago on firm financial footing — and avoid additional property tax hikes.

“There are too many unknowns,” said 7th Ward Ald. Greg Mitchell, who like Reilly, Dowell and Cardenas is a mayoral ally. “We are moving entirely too fast.”

Officials will begin the process of selecting one of five proposals from three firms to build a casino and resort in Chicago at a series of sessions set for Dec. 16. The casino is expected to ring up $200 million in revenue for the city annually. Those funds are earmarked for Chicago’s underfunded police and fire pension funds.

Chicago billionaire and Rivers Casino Des Plaines operator Neil Bluhm, whose Rush Street Gaming submitted two separate bids to build a casino-resort in Chicago, remains opposed to allowing sports betting at pro-sports stadiums. During a hearing last month, Bluhm told alderpeople it would have a “materially negative impact” on a casino at any location. 

Bluhm’s opposition remains unchanged, said John Dunn, a spokesperson for Bluhm, who has been widely considered the apparent front-runner for the casino.

In addition to the 2% tax on gross revenues, Chicago would charge venues an initial $50,000 license fee for a sports betting lounge, as well as $25,000 per year to renew that license. Independent firms could apply for licenses to operate sportsbooks at the venues for $10,000, renewable with an annual fee of $5,000, according to the proposal.

A permanent casino could open as soon as 2025 in Chicago, although slot machines could start ringing at O’Hare and Midway airports much sooner — with tentative plans for a temporary casino also in play.

Bluhm has proposed building a casino and resort in what is now McCormick Place’s Lakeside Center — once known as the convention center’s east building —  or south of the Loop on vacant land along the Chicago River set to be redeveloped by Related Midwest as The 78.

Bally’s envisions building a $1.6 billion complex at either the Chicago Tribune Publishing Center, at Chicago Avenue and Halsted Street, or the McCormick Place Truck Marshaling Yard on the south side of the convention center, according to a statement from the firm.

Hard Rock International proposed building the casino and resort as part of the One Central project, which would build a mixed-use development over the Metra tracks south of Soldier Field.

However, Union Gaming’s study found that sports betting lounges in other cities have not hurt casino revenues, because 96% of all sports bets are placed online, most through mobile apps, Govertsen said.

Confusion also erupted during Tuesday’s hearing over remarks made by Lightfoot during an unrelated news conference on Monday, where she told reporters that the 2% tax would generate revenue that would pay for “any infrastructure work” and “regulatory oversight.”

“We need to make sure that there are sufficient resources for us to be able to do it,” Lightfoot said.

Questioned by City Council members, representatives of the Business Affairs and Consumer Protection Department and the Department of Planning and Development said they were not sure what those costs would be.

Ald. Emma Mitts (34th Ward), the chair of the License Committee, abruptly recessed the committee hearing, an indication that alderpeople may take up the issue again before the full City Council meeting set for Dec. 15.”

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