City Council lifts Chicago ban on sports betting — and imposes a 2% tax
Some mayoral allies denounced the city’s take as “peanuts for an industry that is growing” and “not a sufficient reward for the risks we’re taking.”
A divided City Council agreed Wednesday to lift the Chicago ban on sports betting —and impose a 2% tax on gross revenues from it — paving the way for sportsbooks to open in and around Soldier Field, Wrigley Field, Guaranteed Rate Field, the United Center and Wintrust Arena.
With nine dissenting votes, the Council agreed to get a small piece of the action from a sports betting phenomenon that has already triggered $7 billion of wagering statewide.
The 2% city tax on gross revenues from sports betting is expected to generate $400,000 to $500,000 a year based on an estimated $25 million in annual revenues from sports betting in Chicago.
Three mayoral allies — Budget Committee Chairwoman Pat Dowell (3rd), Ald. Greg Mitchell (7th) and Energy and Environmental Protection Committee Chair George Cardenas (12th), Lightfoot’s deputy floor leader — have denounced the city’s take as “peanuts for an industry that is growing” and “not a sufficient reward for the risks we’re taking.”
South Side Ald. David Moore (17th) was the only member to air concerns about the lack of minority participation on the City Council floor.
“I told everybody after George Floyd and this COVID, I’m not going back to what people call normal because that wasn’t normal, especially for African Americans. We see the numbers. We see the disparities constantly. I’m not going back to that,” Moore said.
Moore said Chicago sports moguls need to be “intentional” about “bringing partners on” and “investing in communities” instead of making vague promises.
“I appreciate the turkeys. I appreciate the toys. But you know what? Everybody’s giving toys and turkeys. ... Things gotta be substance so people can begin to buy their own toys and turkeys,” Moore told his colleagues.
The vote Wednesday ends the political equivalent of a heavyweight boxing match that had chief sponsor, Ald. Walter Burnett (27th), feeling “like an ant in between elephants with all of these billionaires fighting over this stuff.”
In one corner are the owners of the Bulls, Blackhawks, Cubs, Sox, Bears and Sky. In the other corner is Neil Bluhm, billionaire of the Des Plaines-based Rivers Casino that already includes a sportsbook. Bluhm’s Rush Street Gaming company is also part of two separate groups vying to build a Chicago casino.
Mayor Lori Lightfoot has raked in political cash from both groups.
She received more than $200,000 in campaign contributions from Bluhm’s daughter Leslie and her sister Meredith Bluhm-Wolf. She has also received $131,491 from the family of Bulls and Sox owner Jerry Reinsdorf, the Wirtz family that owns the Blackhawks, and from Laura Ricketts of the billionaire family that owns the Cubs.
Just this week, Laura Ricketts and her wife, Brooke Skinner Ricketts, were on the host committee for the third annual “Women’s Spotlight” fundraiser for LightPAC at Theater on the Lake.
Bluhm has argued that the $500,000 in annual revenue the city would generate by imposing a 2% tax on gross revenues from sports betting — for a total tax of 19% — would be “small potatoes” compared to the $12 million in casino revenue it stands to lose by authorizing five “mini-casinos.”
“While people are betting on sports at Wrigley Field or United Center — fantastic locations [that] will open two-and-a-half years before a casino so people will be used to going there — they won’t be at the casino betting on casino games. For every $1 of sports betting you’re losing, you lose about $3 or $4 of casino revenue. While they’re there, they walk around and play slot machines. They play roulette. They play blackjack. That’s big money,” Bluhm has said.
During the public comment period before Wednesday’s meeting, Cubs Chairman Tom Ricketts countered that “sports bar restaurants with a limited number” of betting windows are “not mini-casinos in any way.”
“As shown by the experience in other jurisdictions, testimony of large casino operators and the conclusion of the only independent study — the study commissioned by the city — this will not have an economic impact on the viability of any potential future Chicago casino,” Ricketts said.
“The fact is, sports gaming is less than 2% of casino revenue, and there is no evidence that even that would be affected by this ordinance.”
Ricketts reiterated that the Cubs are “ready to go today” on a $100 million partnership with DraftKings that will pave the way for Wrigley Field to house the first stadium sportsbook in Major League Baseball in time for the 2023 season.
“Every sports venue is looking for ways to contribute to the economic health of our neighborhoods on non-game days. … This ordinance will attract more people on days when we don’t have games and generate more activities on game days themselves,” Ricketts said.
“This ordinance is also good for our sports teams. Incremental attendance and marketing relationships with our sports gaming partners will provide our sports teams with extra resources that can be used to put more competitive teams on the field and, importantly help us keep up with other teams that are monetizing their sports gaming opportunities.”
Last week, a joint City Council committee delayed a vote on the sports wagering ordinance amid complaints that the 2% city tax was “peanuts” and that minorities were getting nothing out of it.
Ald. Greg Mitchell (7th) argued then that the city was moving “too fast” and “too early” before knowing how sports betting will affect a downtown casino and that 2% is “not a sufficient reward for the risks we’re taking.”
Ethics Committee Chair Michele Smith (43rd) has noted that revenues from a Chicago casino will be used to shore up police and fire pension funds.
“That means, if anything cannibalized it, people are gonna ask more of the property taxpayers.”
Under the plan, sports betting would be authorized at a stadium 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, which has been authorized by the Illinois General Assembly but is years away from being built.
No more than 15 kiosks or wagering windows would be allowed at each location unless bettors can also buy 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 to 9 a.m. on Saturday and Sunday.
The city would issue two types of sports wagering licenses: “primary” and “secondary.” Primary sports licenses would start at $50,000 a year and cost $25,000 for annual renewal. Secondary sports licenses would start at $10,000, with an annual renewal fee of $5,000.