A planned vote on an ordinance to bring sports betting in Illinois to Chicago professional sports venues in exchange for a 2% tax on betting transactions was sidetracked by members of the City Council’s License and Zoning Committees on Tuesday.
The ordinance, which was championed by Mayor Lori Lightfoot, would have imposed the tax on gross revenue from sports betting, bringing the city’s total rate to 19% — after the 15% statewide rate and 2% Cook County tax.
The vote was tabled after several aldermen questioned why none of the 26 councilmembers had seen the fiscal study the tax was based on.
The meeting was abruptly sent to recess by Chicago City Council Chair Emma Mitts with no resumption time or date given. Although the legislature legalized Illinois gambling on sports in 2019, it’s still banned in Chicago.
What the Public Said in Tuesday’s Meeting
One theme from Tuesday’s 90-minute meeting was the lack of consensus on how the sports betting tax should be addressed.
Much of the public comment favored the ordinance, with speakers saying the increase in betting dollars from the five proposed retail sportsbooks at various Chicago sporting venues would outweigh concerns about cannibalizing the city’s future casino revenues.
The council is slated to choose from five bids for Chicago’s first casino, with a decision on the facility coming in early 2022. Bally’s Illinois submitted proposals for two sites in the city; HR Chicago, LLC, Rivers Chicago at McCormick, LLC, and Rivers 78 Gaming, LLC had one each.
If the council were to revoke Chicago’s ban on sports betting, five stadiums — Wrigley Field, Guaranteed Rate Field, United Center, Soldier Field, and Wintrust Arena — could open retail sportsbooks. DraftKings and the Chicago Cubs have been laying the groundwork for a sportsbook at Wrigley Field for more than a year.
Chicago resident Derrick Rettell, a co-owner of 4 Star Restaurant Group, told the council he supports both the 2% tax and revoking the city’s ban on sports betting.
He defended his stance by saying his business has seen firsthand the impact teams like the Cubs and Bulls have had on the neighborhoods around them and opening their venues year-round would provide greater financial results for the city at large.
“I'm testifying today in support of the sports wagering ordinance, which allows sports wagering in Chicago,” Rettell told the council. “I am a business owner in a number of neighborhoods … Our reason for supporting this is that I believe that this is a needed economic development opportunity that will lead to greater job creation for all the areas and will be a great year-round attraction that brings people to Wrigleyville, or other areas around arenas and stadiums in Chicago.”
Aldermen Split on Taxes and Sportsbooks
Aldermen lined up on both sides of the debate over the proposed sportsbook ordinance.
One alderman favoring both the sports betting tax and in-stadium sportsbooks was Walter Burnett, who said the revenues from retail sportsbooks would provide immediate financial relief for the city.
“A bird in the hand is better than two birds in the bush,” Burnett said. “We will start getting money immediately with the sportsbook facilities, rather than waiting on a casino to be built. We still have a way to go until these things get built.
“You could see from a lot of folks who got on and testified today, a lot of them benefit from these institutions. They've been doing things in our communities for over 30 years. Why shouldn't we help them to be a part of this program instead of some outside people who haven't been doing anything in our city?”
Others, like Aldermen George Cardenas, David Moore, and Anthony Beale questioned why the city was willing to risk cannibalizing its future casino tax revenues long before the facility opens its doors.
For Beale, the main quandary he had was with the amount of money the city’s budget department projected the 2% tax rate to bring in and the rush to implement such a hike at this point in the rollout process for legalized betting in the Windy City.
Connor Brashear, the chief of staff to Chicago Chief Financial Officer Jennie Huang Bennett, told the aldermen revoking the city’s ban on sports betting could generate between $400,000 and $500,000 in tax revenue based on the 2% figure.
“We’re arguing over $400,000-500,000, when we could potentially be losing dozens of millions of dollars that we’re putting at risk by pushing this forward,” Beale said. “This makes no sense whatsoever that we are even talking about this, at this point in time, when we have a casino pending.”
In November, Neil Bluhm, the chairman of Rush Street Gaming, argued Chicago’s new casino would be negatively impacted financially by competition from sportsbooks at professional stadiums.
A main sticking point for the three aldermen was Mayor Lightfoot’s comments to the Chicago Sun-Times about the city’s obligation to cover infrastructure work costs associated with the rollout of sports betting in the city.
“We need to make sure that there are sufficient resources for us to be able to do it,” Lightfoot said, per the Sun-Times.
Several aldermen asked Alexis Long, the legal counsel for the city of Chicago’s law department, whether the city would be on the hook for such payments, with Long seemingly refuting the statements made by Lightfoot.
“There are no infrastructure requirements,” Long said. “I don't know if there's an argument being made that maybe it would require the city to update something or anything like that, but in the ordinance itself, there's no infrastructure updates required.”
No Resolution in Sight for Sportsbook Ordinance
Mitts adjourned Tuesday’s meeting after Alderman Brendan Reilly questioned why none of the 26 members had received the economic study the city’s financial department commissioned.
“Could someone from the administration answer this question: Has anyone seen this study on the city council?” Reilly asked. “I’m a person who actually reads the traffic studies when we have a developer commission one for a project. And while I am not going to dispute the claims made by the authors of the study, I think it’s incumbent upon all of us to take a moment to read it.”
