The Chicago City Council approved the plan for sportsbooks to be based in or around the five major stadiums in the city on Wednesday, and thus, the ban on sports betting has been lifted. Even though the council was divided on the issue, sportsbooks will now be able to operate in the vicinity of the United Center, Wrigley Field, Guaranteed Rate Field, Soldier Field, and Wintrust Arena.
Details on the Regulations Concerning Sportsbooks in Chicago
Sportsbooks would be allowed to be inside the five major stadiums in the city or within five blocks from them, at a permanent location. The maximum number of windows they will be allowed to operate is 15, and the gross revenue will have a 2% tax, which was earlier proposed by the council.
Moreover, sports betting facilities will have to pay 2% tax to Cook County and an additional 15% state tax. City officials have estimated that the annual revenue of Chicago sportsbooks would be between $20 million and $25 million, which equals to around $500,000 in tax revenue. When the Chicago casino is built, the facility will also be able to host a sportsbook.
Neil Bluhm, the owner of Rivers Casino in Des Plaines, who is also bidding for the Chicago casino, stated that the green light on sportsbooks would be a devastating blow for the casino. He stated that by allowing sportsbooks to operate in the city, Chicago would gain around $500,000 in tax revenue each year from them but would lose around $11 million.
During a Monday committee meeting, Bluhm stated that the decision would lead to the creation of 5 mini-casinos that will take both visitors and money from a casino in Chicago.
The Mayor Disagrees With The Critics By Pointing to A Sportsbook-Related Study
Mayor Lori Lightfoot pointed out a study by Union Gaming from Las Vegas to put aside all of the claims by Bluhm. As the co-founder of Union Gaming, Grant Goverston, pointed out to the aldermen, the company’s study analyzed six states where sports betting was legalized and the study found out that even though some states had a decrease in casino revenue, the revenue of casinos in some states actually increased.
Many sports teams based in Chicago have also blasted Bluhm by saying that he is hypocritical. Cubs’ owners disagreed with the fact that sportsbooks would have a negative impact on the future of the Chicago casino.
The chairman of the Cubs, Tom Ricketts, called into the City Council meeting on Wednesday and urged aldermen to back the ordinance concerning sports betting. He said that this would allow sports teams in Chicago, Cubs included, to open up sports restaurants and bars.
Ricketts emphasized the fact that these restaurants and bars would not be mini-casinos as they wouldn’t feature any casino games, whereas sportsbooks will have a major positive impact as they will create jobs.
Jerry Reinsdorf, the chairman of the Bulls and the Socks, called out Bluhm for his hypocrisy by saying that he met with him and other owners of sports teams in Chicago to make a deal on operating sportsbooks in the city.
Under the plan, Chicago would issue two types of licenses – primary and secondary. Primary licenses will come at an initial cost of $50,000, and the annual renewal will cost $25,000. On the other hand, secondary licenses will start at $10,000, and their annual renewal cost will be $5,000.
Some aldermen expressed concerns over the fact the ordinance does not allow minority-owned or women-owned companies to get a specific share of the contracts, but Mayor Lightfoot said that the state law gives Chicago limited power over the regulation of sportsbooks, which is why critics should ask for changes in the state law, rather than the way the city will regulate these sportsbooks.