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Sports Betting Proposal Stalls As Alderpeople Decry The ‘Peanuts’ The City Would Receive In Taxes

The sports betting ordinance was amended to include a 2 percent tax on gambling revenue, but several alderpeople said it's not enough.

A rendering shows the Cubs' plans for a two-story addition to the southeast corner of Wrigley Field that would house a sportsbook.
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CHICAGO — A proposal to allow sports betting at major stadiums was delayed Tuesday amid pushback from alderpeople who say it could be a gift to wealthy teams while the city gets left with a lump of coal.

The ordinance to allow betting at Wrigley Field, the United Center, Guaranteed Rate Field, Soldier Field and Wintrust Arena was introduced over the summer. The following month, the Ricketts family, who own the Chicago Cubs, announced a partnership with Draft Kings to build a two-story addition at Wrigley Field to house a sportsbook.

But the ordinance has stalled for months amid several concerns, including local taxes. It was amended to include a 2 percent tax on gross wagering revenue. That mirrors Cook County’s tax on sports wagering and adds to the 15 percent tax rate flowing to the state, bringing the total tax on gambling revenues to 19 percent.

The measure appeared ready for a vote during a joint council committee meeting Tuesday, but after several alderpeople questioned if a 2 percent tax was enough, Ald. Emma Mitts (37th) postponed the meeting “until further notice.”

Credit: Colin Boyle/Block Club Chicago
The sun sets over the United Center and Chicago skyline as seen from the Near West Side neighborhood on March 8, 2021.

The 2 percent tax “strikes the right balance” and would net the city $400,000-$500,000 per year, Connor Brashear, of the city’s Budget Department, told alderpeople.

Mayor Lori Lightfoot supports the ordinance and the inclusion of the tax.

“I think it’s only fair that the city of Chicago also obtains revenues as a result of this new venture by the sports teams,” Lightfoot said at an unrelated news conference Monday. “We bear the responsibility for all the residual work that’s going to be done, any infrastructure work that’s required, any regulatory oversight. We need to make sure there are sufficient resources for us to be able to do it.”

Ald. Walter Burnett (27th), who sponsored the ordinance and whose ward includes the United Center, called it “a no-brainer.”

“A bird in the hand is better than two birds in the bush,” he said. “We would start getting money immediately with the sports facilities rather than waiting on a casino to be built.”

Credit: Colin Boyle/Block Club Chicago
Ald. Pat Dowell (3rd) attends a City Council meeting on Sept. 14, 2021.

But several close allies of Lightfoot rejected the plan. 

“I just think $400,000 to $500,000 a year to the city of Chicago is, you know, really paltry,” said Ald. Pat Dowell (3rd), who chairs the Budget Committee. “Even when you add in the licensing fee that these guys are going to have to pay, it seems like peanuts for an industry that is growing.”

Lightfoot’s deputy floor leader, Ald. George Cardenas (12th), described the tax as generating “a few dollars in our pocket.” Cardenas also criticized the lack of formal participation guidelines for minority- and women-owned businesses in the construction of the facilities or operations.

“I just want my colleagues to understand in dollars and cents, five folks [who] are very wealthy are going to get even more wealthy without having a direct impact on minorities,” he said. 

Credit: Colin Boyle/Block Club Chicago
Soldier Field on Nov. 19, 2021.

The measure also has been criticized by potential operators of a Chicago casino. They argue allowing sports betting at the city’s five stadiums would cannibalize revenue at a city casino and cut into the hefty casino tax revenue the city is relying on to shore up its police and fire department pensions.

Lightfoot and her administration have disputed claims from billionaire Neal Bluhm, whose Rush Street Gaming is behind two bids to operate the Chicago casino, that allowing sports betting would diminish casino profits. 

The city hired Union Gaming to conduct research on sportsbooks and the casino proposals, but Ald. Brendan Reilly (42nd) said City Council should be able to review that analysis before voting on the ordinance.

Reilly also echoed a question from Dowell, asking for clarification on what infrastructure the city could be on the hook for.

City officials on hand for the meeting Tuesday said there was no infrastructure work agreed to in the ordinance and asked to provide more information later.

Hearing the concerns of her colleagues and facing an uncertain vote on the proposal, Mitts, who chairs the Committee on License and Consumer Protection, abruptly recessed the meeting.

The other chair of the joint meeting, Ald. Tom Tunney (44th) — whose ward includes Wrigley Field — confirmed the postponement after earlier favoring the ordinance, saying, “We need to embrace it.”

“The jury’s gonna be out in terms of how it cannibalizes revenue, but we’ve been waiting on casino revenues since I’ve been an alderman,” he said. “We’ve been waiting and waiting and in the interim, money has gone to various casinos in and around the Chicago area, to our loss.”

Sports betting would be allowed at facilities inside or near the city’s stadiums, or in buildings within five blocks of the sports facilities. Sports betting would also be permitted at the future Chicago casino.

The sports teams would pay an initial $50,000 license fee and $25,000 in subsequent years. Betting would be limited to the hours of 10 a.m.-midnight Monday-Thursday,  9 a.m.-midnight Fridays and 9 a.m.-1 a.m. Saturday-Sunday.

The five bidders for the Chicago casino will present their plans at a public hearing at the University of Illinois Chicago on Dec. 16. 

The five casinos are being proposed for the Chicago Tribune printing site, the old Michael Reese site, near McCormick Place, at the One Central development near Solider Field and in the The 78 megadevelopment along the south branch of the Chicago River.

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