Chicago-Area Sportsbooks Hit Casino-Sized Roadblock

Written By Nicholaus Garcia on December 9, 2021

In round one of the heavyweight matchup between the Rivers Casino owner Neil Bluhm and sportsbooks at professional arenas in Chicago, Bluhm is the winner.

An ordinance to lift the ban on IL sports betting in Chicago stalled during a city council meeting after several city officials questioned the proposed 2% tax rate.

What the opposition is saying

John Dunn, the main lobbying arm for Rivers Casino, said for every $1 Chicago gains from a 2% tax on sports betting, the city will lose up to $4 in casino revenue.

Dunn, the former director of intergovernmental affairs under Mayor Richard M. Daley, knows city politics. Dunn also knows the best way to get city officials on your side is to punch them with dollar amounts. And that’s precisely what he did.

“The city will lose 10 to 12 million dollars per year — The Chicago Casino will have a revenue drop as much as $80 million a year, which jeopardizes the entire feasibility of your casino,” Dunn said during Tuesday’s meeting.

“Don’t be fooled,” he said. “Desperate to get this approved quickly, they’ve added a 2 percent tax to give a little cover. This is a fig leaf that won’t begin to make up for the city’s loss.”

Chicago mayor supports sports betting in Illinois

Mayor Lori Lightfoot has continued to hold firm in her belief that sportsbooks at professional venues would not cannibalize revenue from a Chicago casino.

Under the proposed ordinance, Wrigley Field (Cubs), Soldier Field (Bears and Fire), Guaranteed Rate Field (White Sox), the United Center (Bulls and Blackhawks), and Wintrust Arena (Sky) would have been allowed to open sportsbooks.

According to Connor Brashear, the chief of staff to CFO Jennie Huang-Bennett, sports betting would bring in between $400,000 to $500,000 based on an estimated $25 million in annual revenue.

Budget Committee Chairwoman Pat Dowell (3rd) called the potential tax revenue “peanuts.”

“I just think $400,000-to-$500,000-a-year to the city of Chicago is really paltry — even when you add the licensing fee that these guys are gonna have to pay. It seems like peanuts for an industry that is growing,” Dowell said.

Next round of discussions are critical

Other Alderman, including Greg Mitchell (7th) and George Cardenas (12th), expressed similar hesitations.

“We’re moving entirely too fast, and the upside is very minimal,” Mitchell said.

Cardenas kept his focus on the city’s long-awaited casino.

“We’re missing this whole picture on the casino. We already have permission to build it,” Cardenas said. “I don’t need to disrupt that.”

Although the ordinance is not entirely open and shut, the next few rounds might be trickier to navigate.

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Where IL sports betting stands

Currently, IL sports betting is one of the top-performing markets when compared to Nevada, New Jersey and Pennsylvania. 

The state recorded $840.4 million in betting handle for October, another state record.

Sportsbooks across the state totaled $48.3 million in profits, resulting in $7.9 million in tax revenue.

Photo by Joe Hendrickson / Shutterstock
Nicholaus Garcia Avatar
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Nicholaus Garcia

Nick has had stints in Chicago and Washington, D.C., writing about politics, financial markets, and sports betting. He graduated from Texas Tech University and completed his master's degree in journalism at Columbia College Chicago.

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