Recently, the Chicago City Council approved an ordinance allowing sportsbooks in the city’s sports stadiums. Despite months of sometimes contentious discussion, the ordinance was approved with little debate. Illinois sports bettors will soon be able to place bets at retail sportsbooks when they go to a game in Chicago.
Retail sportsbooks are allowed in stadiums under Illinois law, but Chicago city officials took over two years to remove the prohibition.
The approval was something of an uphill battle; Rush Street Gaming co-founder Neil Bluhm and owner of the Rivers Casino in Des Plaines was vehemently opposed. Also, a handful of city alderman expressed doubts about the benefits to the city and their wards.
Retail sportsbooks will be able to open within these stadiums or a five-block radius:
- Wrigley Field
- Soldier Field
- Guaranteed Rate Field
- Wintrust Arena
- United Center
Chicago Cubs Chairman Tom Ricketts predicts that a DraftKings Sportsbook could be open by the 2023 MLB season at Wrigley Field. He also suggested that the Wrigley Field sportsbook will likely be a sports bar and restaurant.
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Chicago Adds a 2% Tax on Illinois Sports Betting
The city council decided to impose a 2% tax on the new sportsbooks. That jacks up the total tax on Illinois sports betting in Chicago to 19%. Critics say the high tax rate in Chicago could drive sports bettors to place bets on their phones.
Other critics, such as Budget Committee Chairwoman Pat Dowell, think the 2% city tax rate should be higher, Dowell expressed the opinion that 2% would be “peanuts” to the city’s tax coffer.
Mayor Lori Lightfoot says the Chicago sports betting tax was implemented to appease critics like Bluhm, who feel Chicago sportsbooks will draw traffic away from his Des Plaine casino. Estimates are the tax could generate around $500,000 per year for Chicago, which could go to the city’s public safety pension funds.
Concerns Illinois Sportsbooks Could Hurt Local Casinos
Bluhm has been against opening sportsbooks at the Chicago stadiums for a long time. He has also opposed online registration for sports betting, which will expire end in March 2022. Both of these measures reduce the foot traffic through his casino in Des Plaines.
Two of the five bids for the proposed Chicago casino are from Bluhm’s Rush Street. So, Bluhm’s concern is not only for lost foot traffic in Des Plaines but also if Rush Street wins the bid for the Chicago casino.
Bluhm asserts that the city could lose around $11 million every year and possibly make the new Chicago casino less successful, due to allowing sportsbooks at the stadiums. He believes this will occur due to fewer people going to the casino to place their bets. As Bluhm points out, sports bettors often play the slots as they pass through a casino. They also spend money at casino restaurants and shops.
However, Union Gaming Analytics conducted a study that predicts that the Chicago casino would lose around $4 million to the stadium sportsbooks. But, $4 million is still a significant amount.
Chairman of the Chicago Bulls and White Sox, Jerry Reinsdorf, reports that Bluhm had approached team owners to discuss placing his sportsbooks at the stadiums. BetRivers Sportsbook and Rush Street’s Rivers Casino are partnered with the Chicago Bears. Reinsdorf is perplexed by Bluhm’s change of direction. He wonders if Bluhm had gotten a sportsbook back then, would he be so vehemently opposed to stadium sportsbooks today?
Chicago Mayor Supports Sportsbooks and Has Plans for Casino Tax Revenue
Mayor Lori Lightfoot has supported the ordinance allowing sportsbooks at the city stadiums, in opposition to Bluhm.
Lightfoot also believes taxes generated by the new casino will fund the Chicago police and fire department pensions. As of now, those funds are nearly depleted.
Illinois Governor J.B. Pritzker lent a hand when he signed SB 516 into law. The bill lowers the state’s cut of tax revenue on a Chicago casino that has yet to be built. It also shifts that tax revenue to the City of Chicago. The city can now rake in between 22.5% to 74.7% of slot machine revenue, depending on the casino’s gross gaming revenue.
Of course, the casino is still just a dream. The city’s high tax rates have driven off all but two bidders, one of which is Bluhm and Rush Street. Major casino resort companies, like Caesars, Wynn, and MGM, have lost interest in Chicago, primarily due to taxes and politics.
Illinois Sports Betting Surging
Despite the drama in Chicago, Illinois sports betting hit a record high of $840.4 million in October. The state’s sportsbooks also did well, generating a record $48.3 million in revenue.
DraftKings dominated the Illinois sports betting market with nearly $309 million in online handle. Moreover, DraftKings will be busy setting up its new sportsbook at Wrigley Field.
Undoubtedly, the Illinois sports betting market will surge once sportsbooks open at the Chicago stadiums. Also, the end of in-person sports betting registration will likely boost both revenues for the sportsbooks and taxes to the states.
