Casino magnate Neil Bluhm makes the case against lifting Chicago ban on sports betting
Bluhm’s Rush Street Gaming company is part of two separate groups vying to build a Chicago casino — and his Des Plaines-based Rivers Casino has a sports book that could lose business if sports betting is legalized in Chicago.
Casino magnate Neil Bluhm has lined up a team of blue-ribbon lobbyists to try to convince the City Council not to lift the ban on sports betting in Chicago.
On Monday, Bluhm made the argument himself during a subject matter hearing on sports betting before a joint meeting of the zoning and license committees. It’s the political equivalent of a heavyweight boxing match that has pitted sports team owners against clout-heavy developers vying to build a Chicago casino.
“I feel like an ant in between elephants in this situation with all of these billionaires fighting over this stuff,” chief sponsor Walter Burnett (27th) told his colleagues at the close of Monday’s two-hour hearing.
Bluhm’s interest in blocking the ordinance is two-fold. His Rush Street Gaming company is part of two separate groups vying to build a Chicago casino.
And his Des Plaines-based Rivers Casino already has a sports book that stands to lose business if sports betting is legalized in Chicago.
Bluhm argued lifting the city’s ban on sports betting would have a “material negative impact” on both a Chicago casino and city revenues from it — to the tune of $88 million, about 10% of the “projected gaming revenue” — regardless of which of the five sites and development teams is picked.
“The person who gambles on sports is very likely a gambler who also bets on tables and slot machines. It’s 20% of our business. ... This isn’t some hypothetical discussion,” Bluhm said.
“The bottom line is that less people will come to the Chicago casino when they can bet on sports at the stadiums, particularly at these really good, close locations [at Wrigley Field and the United Center]. That means that less sports bettors will walk around the casino and play slots and table games and less people go to the restaurants at the casino if they can also be betting sports at the same time at the stadium.”
Bluhm argued Chicago casino revenue from slots and tables would drop by $61 million a year with stadium sports betting. The city would lose 20% of that — about $12 million. The state would lose $9 million.
“For almost 20 years, the city has tried to get a casino. Now, when you finally can have one, why would you create several competitors when the city gets no revenue from sports betting?” Bluhm said.
“What is more important — that the city have a great casino or the sports teams have a retail sports betting book? ... This is not good for the city. It’s gonna cost them a lot of money.”
Mara Georges, onetime city corporation counsel and now a registered lobbyist for the United Center, accused Bluhm of overstating his case out of selfish motives and working behind the scenes to get the City Council to increase the tax on sports betting beyond the current 17%.
“I question the fact that he would encourage you to vote against an ordinance that pushes business out to his Des Plaines casino because that is what it will do,” Georges said.
“If the tax rate on Illinois gets too high on sports book or if sports book is not allowed in the city of Chicago, all that will happen is those bettors will leave the city and flee to locations outside the city.”
The United Center’s research has found “no evidence that sports wagering at professional sports venues will materially impact revenue from a Chicago casino,” Georges said.
“Not only ... is sports wagering activity a fraction of casino activity. But, in Washington D.C., the first district to allow sports wagering at professional sports venues, revenues at nearby casinos actually increased after sports wagering at professional venues began,” she said.
Bluhm has registered as a lobbyist and lined up a high-powered team of other lobbyists in trying to kill, or at the very least stall, the sports betting ordinance championed by Burnett, whose ward includes the United Center.
Those lobbyists include John Dunn, who spent eight years as intergovernmental affairs director for former Mayor Richard M. Daley; LaTasha Thomas, a former City Council member; and Mike Houlihan, son of former Cook County Assessor Jim Houlihan.
The roster of high-powered lobbyists representing the Blackhawks, the United Center, the Wirtz family, the Whites Sox or other sports teams in advocating for sports betting at Chicago stadiums also includes John R. Daley, son of Cook County Commissioner John Daley and nephew of the former mayor; Mike Noonan; Amy Degnan; Guy Chipparoni; Richard Velasquez, Ken Sawyer and Gyata Kimmons.
Sports moguls laid out their argument to lift Chicago’s ban on sports betting in a flyer distributed to Council members before Monday’s hearing.
It estimates “direct and indirect tax revenue to the state, county and city from sports wagering” would “exceed $79 million annually.”
“Without action, Chicago would continue to lose patrons to sports wagering facilities outside the city limits or utilize mobile betting services,” the flier states.
“The city would also miss out on incremental job creation as well as incidental food, beverage and amusement tax revenues.”
Like Bluhm, Mayor Lori Lightfoot has expressed concern that lifting the ban could “cannibalize” a Chicago casino.
That’s apparently why the Chicago Park District wouldn’t engage in good faith discussions with the Chicago Bears on their request to create a sports-betting mecca near Soldier Field.
The spurned request is yet another reason the team has a deal to buy the 326-acre site of the now-shuttered Arlington International Racecourse for $197.2 million.
Bluhm has long been considered a shoo-in to apply for the city casino license, given his success running Rivers, Illinois’ most lucrative gambling mecca — in addition to his close ties to the mayor. Lightfoot has received more than $200,000 in campaign contributions from Bluhm’s daughter Leslie and her sister Meredith Bluhm-Wolf.
Bluhm is a key player in the development group seeking to open a Chicago casino at the McCormick Place Lakeside Center after adding 2,000 parking spaces and making “significant capital improvements” to the aging, seldom-used facility.
Bluhm’s second hand in the Chicago casino game is Rivers 78 Gaming LLC, a partnership with development firm Related Midwest. That proposal aims to break ground near Roosevelt Road and Clark Street.
The Cubs have forged a $100 million partnership with DraftKings that could give Wrigley Field the first stadium sportsbook in Major League Baseball. But first, the city’s sports betting ban must be lifted.
Burnett’s ordinance would do just that.
Under the plan, sports betting would be authorized at Wrigley, Guaranteed Rate Field, Soldier Field, the United Center and Wintrust Arena or in a “permanent building or structure located within a five-block radius” of those stadiums.
Sports wagering would also be authorized inside inter-track wagering facilities and inside a Chicago casino.
No more than 15 kiosks or wagering windows would be allowed at each location unless bettors can also purchase food and drink. No one under age 21 would be allowed to place a bet.
Sports wagering would be prohibited from midnight to 10 a.m., Monday through Thursday; midnight Friday to 9 a.m. Saturday; and 1 a.m. to 9 a.m. on Saturday and Sunday.
The city would issue two types of sports wagering licenses. “Primary” licenses would start at $50,000 a year and cost $25,000 for annual renewal. “Secondary” licenses would start at $10,000, with an annual renewal fee of $5,000.
As Monday’s hearing got under way, Burnett argued sports betting would “benefit all of the restaurants and businesses” in his Near West Side ward without hurting a Chicago casino.
“It’s dead in our community,” except on game days at the United Center, Burnett said. “You just see an island of parking lots.”
Ald. Anthony Beale (9th) strongly disagreed. He called Burnett’s ordinance “one of the worst” and most “ill-timed” gaming ordinances ever drafted because of its potential to discourage developers vying to build a Chicago casino.
“We don’t know what this will do or what it won’t do as far as having somebody invest billions of their own dollars,” Beale said.
“I’m not opposed to [sports betting]. I’m just opposed to ... spending time on this now when we should be trying to spend all of our time and energy on a casino that’s gonna be bringing in hundreds of millions of dollars into this city. To be talking about something that could potentially jeopardize that ... when we’d only get $25,000 a year for each one of these licenses — that’s absurd.”
When the hearing ended, a spokesperson for the United Center, Bulls, Hawks and Sox issued a statement saying sports moguls appreciated the opportunity that Monday’s hearing gave the teams to “share our position and challenge the false narratives that have been launched” about the sports betting ordinance.
“We appreciate Mayor Lightfoot’s continued support and we look forward to the administration keeping its commitment to see this pass the full City Council,” the statement said.