Misdeal or pat hand? Pritzker and Lightfoot playing for high stakes with Chicago casino

Political insiders say Gov. J.B. Pritzker was completely blindsided by Mayor Lori Lightfoot’s new proposal for a publicly-owned city and state Chicago casino and first read details of her plan in the newspaper.

“This strikes me as a uniquely amateur view of how governing functions,” one insider said.

But Lightfoot on Tuesday took umbrage at suggestions that she had somehow violated political protocol by briefing state legislators from Chicago about her veto session requests before sharing them with the governor.

And she denied any suggestion that the governor was left out of the loop.

“There’s no error,” the mayor said. “We’ve constantly brought the governor and his team along on the journey regarding casinos. ... I’ve spoken directly with the governor about what options are on the table.”

Pritzker spokeswoman Emily Bittner said the governor “remains open to a number of approaches for making the Chicago casino successful, but with regard to public ownership, our administration would need to ensure that the challenges of public ownership are fully understood and addressed.”

But political insiders described Lightfoot’s move as a “my way or highway kind of approach” that did not include all key stakeholders.

“They were treated as an afterthought when they should have been seen as partner and an ally,” the insider said of the governor’s office.

The tensions could come to a head Wednesday as high-level staffers for the freshmen governor and mayor meet to hash out the details.

Ashlee Rezin Garcia/Sun-Times file photo

It’s not the first time Lightfoot has gone it alone and surprised Pritzker. In June, he learned of the mayor’s plan to try to get the state to take over the city’s pension funds via the media. The governor promptly nixed that plan.

State Sen. Terry Link, a key sponsor of the gambling bill, said he warned the mayor this fall during negotiations that the governor was not on board with a city-and-state-owned Chicago casino.

“I told them, ‘The governor is still opposed, so why do you keep bringing this in? Let’s focus on some different ways that we are working on. Let’s focus on that.’ And now the mayor comes out and makes this statement,” Link said. “I can’t figure it out.”

Link said it will be difficult to pass “special legislation for Chicago only.”

“We gave them a really good plan as it was in the last legislation. If we start giving them other things we’re not going to be able to pass it because the Republicans went along with it,” Link, D-Vernon Hills said. “We did it in the last session, but I don’t think you will have any Republicans wanting to give the city of Chicago something that will not help the other new casinos.”

“It’s not an easy sell in any regard,” Link said.

State Rep. Bob Rita, D-Blue Island, on Tuesday acknowledged there’s a lot more work to be done to hammer out the Chicago casino, which has always been a contentious issue. And there are less than two weeks to go before the veto session, in which Pritkzer’s priority is a plan to consolidate suburban and Downstate police and fire pension funds.

“There’s a lot of things to work through and a lot at stake here involving the gaming legislation,” Rita said. “When you’re dealing with gaming, you move one part and make one change and you open Pandora’s box,” Rita said. Still, he said he hopes stakeholders will meet as soon as possible to “work through” the ownership issues.

In her pursuit of the elusive Chicago casino, Lightfoot was forced back to the table after a feasibility study by a Las Vegas consultant found “onerous” taxes in the gambling bill passed this year would prevent any developer from getting the financing to break ground on the city casino.

As she revealed this week, the mayor has put her chips in two different piles.

Plan A calls for the city and state to own a Chicago casino operated by a private vendor. The state would get 51% of the profits or an estimated $381.6 million for statewide infrastructure. The city would get 49% or $366.7 million for police and fire pensions. Plan B is simply a revised tax structure that would reduce the effective tax rate on a Chicago casino from 72% to 45% with the same 51%-49% revenue split.

When legislators negotiated the gaming bill this spring, they worked hard to craft a different arrangement for a Chicago casino that rural lawmakers wouldn’t call a “special deal.” Lightfoot was not yet mayor when many of these conversations were evolving.

“She would be the mayor who got a Chicago casino regardless of how the ownership looked. We felt like this was a win,” a source with close knowledge of the gaming bill said of the original ownership agreement. The source said changing the initial structure to help Chicago will give room to “everyone wanting a piece of the changes.”

Illinois Senate President John Cullerton was not available to comment on the proposal on Tuesday. But Senate Majority Leader Kimberly Lightford, D-Maywood, said it will be “tough” to work out the many issues around the Chicago casino during veto session.

“It’s good to have ideas to start the conversation, and I would like to see a Chicago casino happen and help create much-needed revenue for the city. However, arriving at a consensus on ownership and all that that entails and getting legislation passed in veto session is going to be tough and will require a lot of work,” Lightford said.

John O’Connor/AP; Ashlee Rezin Garcia/Sun-Times

Illinois Republican Leader Jim Durkin and the mayor “have discussed the issues regarding Chicago’s casino license and other city issues,” spokeswoman Eleni Demertzis said, adding Durkin will receive a detailed briefing “in the near future.” Illinois Senate Republican Leader Billy Brady, however, was not briefed on the proposal, his office said.

Lighfoot floated her casino plan, as well as a plan for a graduated transfer tax, during a private meeting over the weekend with members of the Chicago delegation.

Lightfoot on Tuesday likened her plan for city-state ownership of a Chicago casino to the Metropolitan Pier and Exposition Authority and said she had briefed Pritzker on those plans every step of the way.

Lightfoot said she’s had “multiple conversations personally with the governor” and there have been “many staff-to-staff conversations.”

“We obviously recognize that the governor is an important part of this process, just as the Legislature is. That’s why we have been incredibly transparent in trying to solicit conversations, suggestions, advice from a number of different folk who are gonna be involved in getting this right.”

Justin L. Fowler/The State Journal-Register via AP)

A Chicago casino would make an upfront payment to the state “equal to $135 million, plus $10 million for a sports betting license.” That would be the “highest payment of all casinos” in Illinois, City Hall said. The Chicago casino would “pay the same table admission tax as all other casinos.”

Lightfoot’s decision to take on city and state ownership — amid a burgeoning corruption scandal that has spread from Chicago and the south suburbs to Springfield — was a surprise. Many expected her to keep a complicated subject simple and confine her request to the tax structure.

Lightfoot denied that the initial response to both of her plans has been “cool.”

“I don’t know who you talk to, but we have had a lot of conversations with a lot of legislators. And that’s not actually, not accurate at all,” she said.

So, the mayor likes her chances in the abbreviated fall veto session?

“You never know ‘til you know. But, we have been very conscious of making sure that we are bringing people along on the journey,” she said.