Neil Bluhm may be a billionaire, but that doesn’t necessarily mean he understands business. The entrepreneur and partner of Midwest Gaming & Entertainment is trying to convince the Chicago City Council not to lift a local sports betting ban because it would impact his Rivers Casino and sportsbook in the city of Des Plaines. However, that’s what free enterprise, the system that turned him into a billionaire, means.
No Sportsbook (Unless It’s Mine)
As reported by the Chicago Sun-Times, Bluhm presented the argument during Monday’s subject matter hearing regarding sports betting at a joint meeting between the license and zoning committees. This is the political equivalent to a heavyweight boxing match. It pits sports team owners against developers who want to build a Chicago casino. Walter Burnett, the chief sponsor of the effort, told his colleagues that he felt like an “ant in between elephants” in the current situation of all these billionaires in this fight.
Bluhm has two motives for blocking the ordinance. His Rush Street Gaming company is one of two groups that are vying for a Chicago casino. Rivers Casino, which is located in Des Plaines, already has a sportsbook that, according to him, would lose money if Chicago legalizes sports betting.
Bluhm claimed that lifting Chicago’s ban on sports betting would have “materially negative impacts” on both Chicago casinos and city revenues. This was to the tune of $88 million or about 10% of “projected gaming income.”
Bluhm, who incorrectly believes that casino gamblers and sports bettors are the same, asserted, “The bottom line is that fewer people will come to the Chicago casino when they can bet on sports at the stadiums, particularly at these really good, close locations [at Wrigley Field and the United Center]. That means that less sports bettors will walk around the casino and play slots and table games and less people go to the restaurants at the casino if they can also be betting sports at the same time at the stadium.”
Incorrect Assumptions Only Hurt Chicago
Bluhm claimed that Chicago’s casino revenues from tables and slots would fall by $61 million annually with stadium sports betting. This would mean that the city would lose around $12 million or 20%. The state would also lose $9 million.
BetRivers Sportsbook is the first brick-and-mortar sportsbook to be approved by the Illinois Gaming Board. It opened at Rivers Casino in Des Plaines last month.
Mara Georges is a former city council counsel, and she is now a registered lobbyist with the United Center. Bluhm was accused of exaggerating his case for selfish motives. He also claimed that he worked behind the scenes to get City Council to raise the tax on sports betting to 17%.
Georges stated, “I question the fact that he would encourage you to vote against an ordinance that pushes business out to his Des Plaines casino because that is what it will do.”
She added, “If the tax rate on Illinois gets too high on [sportsbooks] or if a sportsbook is not allowed in the city of Chicago, all that will happen is those bettors will leave the city and flee to locations outside the city.”
Georges stated that the United Center’s research found no evidence that betting on professional sports will have a material impact on revenue at a Chicago casino. “Not only … is sports wagering activity a fraction of casino activity. But, in Washington DC, the first district to allow sports wagering at professional sports venues, revenues at nearby casinos actually increased after sports wagering at professional venues began,” she concluded.