Teams want protection in exchange for $10 million vig required to launch sports betting at arenas

State regulators need to tighten rules to fend off “faux” competitors if Chicago’s professional sports teams are expected to fork over a whopping $10 million apiece for licenses to open sportsbooks at or near their stadiums.

That’s what a lawyer for the White Sox, Cubs, Bears, Bulls and Blackhawks told the Illinois Gaming Board in a letter last week, as the agency sets the framework for newly legalized sports betting across the state.

Among other things, the teams want rules to keep casino-tied sports wagering operations and Illinois Lottery parlay betting kiosks out of their territory once the industry finally launches.

“We believe the issues below must be resolved to get sports betting operational at Illinois sports facilities and to meet the goals” of “sustaining and promoting tourism and generating revenue for Illinois,” gaming attorney Donna More wrote on behalf of the teams.

Ashlee Rezin/Sun-Times

Illinois’ new gambling expansion law authorizes sports wagering licenses not only for casinos, racetracks and off-track betting parlors, but also for up to seven sports facilities with a capacity of 17,000 or more — opening the door to betting windows inside or within a five-block radius of Guaranteed Rate Field, Wrigley Field, Soldier Field and the United Center.

Even though Gov. J.B. Pritzker’s signature made sports betting legal June 28, the Gaming Board — which oversees all gambling operations in the state — still has to draft hundreds of pages of rules not spelled out in the law before the industry can go live.

And with a $10 million price tag for each sports wagering license on top of a $250,000 application fee, each team should get total control over its five-block-radius domain, wrote More, an attorney for Fox Rothschild LLP who previously served as the Gaming Board’s general counsel — and who has also thrown her hat in the ring for Cook County state’s attorney in next year’s primary election.

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That means barring from each team’s designated domain the lottery sports-betting terminals that were also included as a pilot program under the gambling expansion, unless they get team approval. Those lottery terminals, which could soon be installed at up to 5,000 convenience stores statewide, would “result in another major source of wagering saturation in the State” if left unchecked around stadiums, More wrote.

It also means casinos, OTBs and other competing sports-betting operators should be kept from advertising or horning in with “a faux sports wagering facility” within the five-block-radius zone, including by offering online betting without team approval, More wrote.

“Protecting the teams’ exclusive right to authorize sports wagering activity within the five-block radius both promotes the economic interests of the state and community, and protects the teams’ investment in their fans and the quality and integrity of the games,” More wrote.

With an apparent lack of political will to revisit terms of the sports betting law during the upcoming fall veto session in Springfield, influencing the rule-making process appears to be the teams’ last shot at improving their initial stake in the industry.

State Rep. Mike Zalewski, the Riverside Democrat who spearheaded the sports betting end of the new gambling legislation, said the teams’ recommendations were “pretty consistent with what they’d been telling us in the spring — that while they had specific concerns about what would make a venue license viable, they still do wish to participate in the market.”

In addition to Chicago’s four major stadiums, large venues such as Chicagoland Speedway in Joliet and SeatGeek Stadium in Bridgeview would be eligible to lay wagers. Rosemont officials have already said they’re exploring a license for Allstate Arena.

The teams provided nearly nine pages of recommendations to the board, including a request for licenses to follow teams if they get a new stadium or relocate within the state.

Their comments were submitted as part of a public comment period initiated by Gaming Board administrator Marcus Fruchter, a period that closed last week. The Gaming Board has said it will share some of those responses on their website “in a timely manner.”

Regulators have not set a timeline for sports betting to launch in Illinois. Despite groans from eager fans, Fruchter has said his agency won’t rush into a rollout, even as casinos in Iowa and Indiana have started taking bets over the last month and a half.

The Gaming Board’s next meeting is Nov. 7.

Read the pro teams’ full list of recommendations to the Gaming Board here: