One month after voting to raise property taxes by a record $588 million, a rookie alderman on Wednesday forged ahead with a plan to minimize pain for Chicago homeowners — by authorizing video gaming–only to be shot down by Mayor Rahm Emanuel.
Emanuel is dead-set against the idea of saturated gambling with video machines in scores of neighborhood bars.
Instead, the mayor wants the land-based, city-owned casino downtown that has eluded Chicago mayors for a generation. That way, anyone offended by legalized gambling could simply avoid the casino.
“I’ve been very clear. I’m opposed to it. I’ve said that many times. I’ll repeat it. I’m opposed to video gaming. I don’t support it. If we’re going to have gaming, it should be isolated or in a central location like a casino. I don’t want to see it spread throughout the city of Chicago. I don’t think that’s good for the type of city we want to have,” the mayor said Wednesday after Ald. Ray Lopez (15th) introduced the video gaming ordinance.
“I’ve been clear that the city should have a casino. I’ve said that for the last five years. And the resources for that casino should go toward shoring up our police and fire pensions. But, I don’t believe you want to see machines throughout the city of Chicago. In a single location would be appropriate.”
Lopez has an answer to what he calls the “keep-it-over-there” theory: Allow individual wards to “opt out” of video gaming, just as they can already declare moratoriums on new liquor licenses.
“The licensing fee is $1,000. And all the moratorium language is written into the ordinance so that aldermen who decide it might not be a perfect fit for their communities can opt out of it,” Lopez said Wednesday.
Last month, Lopez was one of 36 aldermen to support a tax-laden budget that includes a $588 million property tax increase for police and fire pensions and school construction and a first-ever garbage collection fee of $9.50-a-month-per household.
Emanuel has openly warned that the heavy-lifting is only beginning. The mayor has also proposed raising property taxes by another $170 million for teacher pensions, provided it’s part of a grand bargain that calls for pension help from Springfield and shared sacrifice — in the form of a 7-percent pay cut — from the Chicago Teachers Union.
On Wednesday, Lopez said he’s forging ahead with a video gaming plan he first talked about in September to try to mitigate the need for future property tax increases — either for teacher pensions or to save the Municipal Employees and Laborers pension funds if, as expected, the Illinois Supreme Court overturns Emanuel’s carefully negotiated reforms that increased employee contributions by 29 percent and reduced benefits.
“Anything we can do to lighten the load on property owners and our retail commercial industries would definitely be appreciated. It’s never too soon to start that conversation,” Lopez said, pegging the city’s possible yearly revenue jackpot at $50 million to $200 million.
Video gaming opponents have condemned it as the “crack cocaine of gambling.” They worry about the negative impact of having machines in every other tavern.
Lopez dismissed those concerns.
“We had some unauthorized video gaming throughout the city’s neighborhoods before. This gives us an opportunity to have that industry come out of the shadows and be legitimate and aldermen still have the ability to regulate it. So, it’s not like all of Clark Street is going to be nothing but strip-malls with gaming machines. Aldermen will be able to limit that while at the same time, helping businesses that want to participate,” Lopez said.
If the City Council authorized video gaming, 1,800 establishments could seek licensing to host approximately 7,600 machines, Lopez said, citing projections from the city’s Office of Budget and Management.
If all of those machines were authorized, the city would get $16 million in annual tax revenue. When you throw in a $1,000 annual licensing fee for each machine, the city’s take would approach $40 million.
Ald. Pat O’Connor (40th), Emanuel’s City Council floor leader, has argued that it makes no sense to authorize video gaming while the mega-casino proposal is still pending in a stalemated Springfield.
“If we do that kind of piecemeal approach, it significantly impacts our attempt to get a casino. If you allow gambling throughout the city, trying to get gambling at one particular site is far less compelling. It weakens our case,” O’Connor has said.