Chicago City Council Recesses Without Vote On Sports Betting Ordinance

Confusion and casino cannibalization concerns put kibosh on lifting home rule ban
Chicago Sports Betting Ordinance

The Chicago City Council recessed Tuesday without taking a vote on an ordinance that would lift the home rule ban on sports betting in the Illinois metropolis at or near its five sports venues.

Alderwoman Emma Mitts, who chairs the Committee on License and Consumer Protection, called for the recess after Alderman Brendan Reilly inquired if anyone had received a copy of the Union Gaming Analytics study regarding the potential for retail sportsbooks to cannibalize a downtown Chicago casino. After no one confirmed that they’d read the study and multiple members said they had not, Reilly stated, “That’s a bit of a concern to me. … While I’m not going to dispute the claims made by the authors of the study, I think it’s incumbent on all of us to take a moment to read it.”

Reilly noted that something similar took place with regard to approval of the city’s 75-year lease of its parking meters to private company Chicago Parking Meters in 2008 under then-Mayor Richard M. Daley for $1.16 billion. That deal continues to be reviled, considering it had generated more than $500 million in revenue for private investors through 2020 while putting a strain on the city’s budget.

Reilly also addressed Alderwoman Pat Dowell’s concerns regarding infrastructure quotes around the ordinance, quoting a Chicago Sun-Times article from Monday in which Mayor Lori Lightfoot said the city must pay for any “infrastructure work” to facilitate sports wagering in Chicago, including potential “regulatory oversight.”

That led to Mitts abruptly calling for a motion to recess that was seconded by Alderman David Moore with an undetermined return date.

Not wanting to upset casino progress

Multiple aldermen said they were not opposed to allowing sports wagering to take place at or within a five-block radius of Wrigley Field, Guaranteed Rate Field, Soldier Field, the United Center, and Wintrust Arena — the last still needing approval via Gov. JB Pritzker’s signature on HB 3136 to be included. But more than one alderman objected to the timing of the vote on the ordinance proposed by Alderman Walter Burnett.

That timing involves the city being in the early stages of reviewing the five proposals it received for a downtown casino that officials hope could open by 2025. Three companies — Rush Street, Bally’s, and Hard Rock — submitted proposals with projected costs ranging from $1.6 billion to $2 billion, with the winning bid having a chance to generate up to $800 million in annual revenue, according to an August 2020 white paper from Union Gaming Analytics.

Adding to the difficulty in potentially gaining consensus was late language inserted into the ordinance that would allow the city to impose a 2% tax on adjusted revenue on all wagers made within its borders. The tax rate on sports wagering revenue statewide in Illinois is 15%, and there is an additional 2% tax on revenue for all wagers placed within Cook County. The latter tax has generated $4.1 million in revenue for Cook County this year, and Grant Govertsen, managing director of CBRE Capital Advisors, projected the additional 2% would generate between $400,000 and $500,000 in tax receipts for the city based on annual revenue between $20 million and $25 million.

Rush Street co-founder Neil Bluhm, who has an ownership stake in both the Chicago Bulls and Chicago White Sox, came out stridently against the ordinance last month, citing a potential revenue drain of as much as 10% on the projected downtown casino revenue. Testimony on Wednesday included many proponents of the ordinance among business operators in the Lakeview area near Wrigley Field, while Rivers Casino lobbyist John Dunn offered testimony in opposition.

Potawatomi denied TRO in Waukegan license process

In other Illinois gaming news, the Forest County Potawatomi Community was denied a temporary restraining order by Judge Cecilia Horan in the Chancery Division of Cook County Circuit Court on Wednesday. The decision concerned the Illinois Gaming Board’s process for finding a gaming company “preliminary suitable” for the casino license awarded to the city of Waukegan in the northeast portion of Illinois near the Wisconsin border.

The tribe had sought a temporary restraining order because the IGB had an agenda item for its Wednesday meeting that could result in a winning bid being selected for Waukegan between Full House Resorts and North Point Casino. In a filing, the Forest County Potawatomi Community called the city’s selection process “rigged,” and the Illinois Gaming Board delayed any decision on the Waukegan license last month in hopes that federal mediation would bring a conclusion to the case.

Photo: Shutterstock


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