Chicago aldermen call timeout on sports betting over casino worries
Aldermen are worried sports betting taxes will yield chump change while damaging the prospects for new casinos in Chicago. They are calling for a delay in the action.
A Chicago City Council joint committee delayed voting on allowing stadiums to open sportsbooks, with some aldermen saying the city should see a bigger cut of the take.
The plan for venues such as Wrigley Field and the United Center to open sports betting operations hit a roadblock Dec. 7 when the license and zoning committees stalled on voting. The dispute is over the city’s share of revenue from a 2% tax.
Under the 2% tax, the city can expect to see $400,000-$500,000 in annual revenue. Budget Committee Chair Ald. Pat Dowell, Ward 3, called the estimate “paltry.”
“It seems like peanuts for an industry that is growing,” Dowell said.
Some aldermen said they fear sports betting will undermine new casino projects. John Dunne, a lobbyist for Rivers Casino, said a study by the casino company showed the city could miss out on $10-$12 million in casino revenue if sportsbooks are allowed in stadiums.
The 2% tax on sportsbooks has support from Mayor Lori Lightfoot as well as Ald. Walter Burnett Jr., whose 27th Ward includes the United Center.
“We would start getting money immediately with the sports facilities rather than waiting for a casino to be built,” said Burnett, who originally introduced the ordinance. The soonest Chicago could see a permanent casino is 2025.
Council members are asking for a city-commissioned report proving the two types of gambling can co-exist without cutting into casino tax revenue. A study from Union Gaming Analytics distributed to committee members showed sports betting in other cities doesn’t hurt casino revenue because 96% of sports bets are made online through mobile apps.
City Council members also want clarification from Lightfoot about the logistics of the city paying for casino infrastructure. Lightfoot earlier this week said the city is on the hook for “infrastructure work” related to sports betting facilities.
Chicago teams argue the 2% tax is too much. In an emailed statement, a spokesman for the Chicago Bulls, White Sox, Blackhawks, and the United Center said fans already pay a 12% city amusement tax, and they shouldn’t face another 2% tax when they make their sports bets. They also said taxing sports venues creates an unfair advantage for the Rivers casino location in Des Plaines, which operates without a municipal tax.
If the ordinance passes, sportsbook operators must pay an initial $50,000 in licensing fees and $25,000 annually in years to follow.
The license and zoning committees will revisit the issue before the next council meeting Dec 15.