Ordinance For Sportsbooks At Chicago Venues Passes Out Of Committee

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An ordinance that would allow sports betting at Chicago’s five sports venues passed out of committee by a strong margin Monday, moving one large step closer to having the full city council vote to lift the home rule ban.

By a 19-7 vote, Alderman Walter Burnett’s ordinance advanced out of the Joint Committee for Zoning, Landmarks, and Building Standards and License and Consumer Protection. Chairwoman Emma Mitts said she would report the ordinance out of committee to the full Chicago City Council at its Wednesday meeting, and it is possible it will come up for a full vote at that time.

The ordinance had late language inserted that would allow the city to impose a 2% tax on revenue from all wagers — retail and mobile — made through a licensee at its location or within a five-block radius.

The committee was reconvened after going to recess last Tuesday. At the time, some aldermen felt they did not have enough information to make an informed decision about the potential for sports betting revenue to cannibalize gaming revenue at a proposed downtown casino.

Monday’s session brought testimony from heavy hitters on both sides of the sports and gaming industry. The ordinance was endorsed by Chicago Bulls and White Sox owner Jerry Reinsdorf, Cubs owner Tom Ricketts, and Blackhawks owner Rocky Wirtz.

But Rush Street Gaming co-founder Neil Bluhm, who also has a minority stake in both the White Sox and Bulls, repeated his opposition to the ordinance in similar terms to testimony given last month. Bluhm’s gaming company also has two of the five downtown casino proposals submitted to the city and a substantial minority ownership stake in Rivers Casino in Des Plaines, the highest generator of casino tax revenue among the 11 casinos currently operating in the state.

Allowing sports venues to be granted sports betting licenses was one of the provisions in the massive gaming expansion bill signed into law by Illinois Gov. JB Pritzker in June 2019. The bill allowed for Wrigley Field, Soldier Field, Guaranteed Rate Field, and the United Center to apply for sports wagering sports facility licenses.

Wintrust Arena, which did not meet the attendance capacity established in the 2019 bill, would be allowed to apply for a license if Pritzker signs HB 3136, which was sent to the governor’s desk on Nov. 22. He is expected to approve the measure, which passed both houses by an overwhelming majority during the state’s legislative veto session in late October.

Ricketts hopes to open sportsbook in 2023

Reinsdorf calls Bluhm’s opposition “perplexing,” says Bluhm wanted to operate sports books at the United Center before a casino was approved in Chicago
He is cut off, as his 3 minutes expire

— Heather Cherone (@HeatherCherone) December 13, 2021

Of the three owners who offered testimony Monday, Ricketts appears to be the closest to launching a retail sportsbook. The Cubs signed an agreement with DraftKings in September 2020 to open a sportsbook, and Ricketts received a key zoning approval in August to build that sportsbook — reportedly to be more than 22,000 square feet in size — at the intersection of Addison Street and Sheffield Avenue.

The Cubs owner reminded aldermen during testimony that the planned Wrigley Field sportsbook “is not a casino or even a mini-casino. It’s a sports bar/restaurant with the type of fans at the type of places you see at venues around the country. … The fact is there are no slot machines, no card games, no roulette wheel, no table games, nothing like a casino.”

Ricketts, who said construction would begin immediately should the ordinance be approved, added that “our sportsbook would not have a meaningful impact on any potential city casino.”

For his part, Reinsdorf took aim at Bluhm during his allotted three minutes. After touting his teams’ civic involvement around Chicago, Reinsdorf said, “What is perplexing is that Neil Bluhm, who does not want our buildings to have sportsbooks, met with us on several occasions seeking to operate sportsbooks in our buildings.”

Reinsdorf also pointed out that those meetings came “long after the casino was approved for Chicago,” noting that Bluhm “had no assurance he would be chosen to operate a casino in Chicago, but was not concerned that these books would in any way cannibalize whoever was chosen to operate the casino.

“It makes me wonder: If he had gotten his way back then, would we be having this meeting today?”

Sparks between Bluhm and Bally’s

With Rush Street and Bally’s slated to make their downtown casino proposals Thursday, it made sense that both parties (as well as Hard Rock, which did not offer any public remarks) would be following the ordinance proceedings closely. A Chicago native, Bluhm made clear his opposition last month and doubled down in his testimony Monday.

Bluhm said that “nothing had changed since last week” and warned the ordinance “will cost the city of Chicago serious money” in relation to the projected revenue from the downtown casino. Calling the five venues “mini-casinos,” Bluhm said the 2% tax would create little to no revenue and perhaps even a loss when factoring in the city’s infrastructure expenses.

Bluhm said Rush Street provided two studies to the city that support his contention “that sports betting is the most promising development for casino gambling in a decade. Sports betting attracts a younger demographic to [the Chicago] casino.” He maintained his stance from last month that the city would lose $10 million to $12 million in tax revenue per year if the ordinance was passed and claimed that “the real issue is that the stadiums are taking the sports betting customers away from your Chicago casino.”

Bally’s, which has two of the other three bids for the downtown Chicago casino license, offered testimony in support of the ordinance. Wanda Wilson, a Chicago native who is on Bally’s board of directors, noted her company is the largest gaming company among the downtown license bidders and has the third-largest retail footprint of any gaming operator in the U.S.

“We welcome the presence of retail sportsbooks at Chicago’s legendary professional sports venues,” Wilson said, “and are confident it will have no impact on our casino revenue expectations. We remain ready to make a $1.6 billion commitment to the city of Chicago. … We are strongly in favor of this ordinance.”

Aldermen struggling with timing of ordinance

.@Alderman_Beale says the discussion is not on Chicago professional sports teams’ “charitable giving” and work in communities but an argument about how how sports betting could affect the city’s potential casino “at a later date.”

— Erin Hegarty (@erin_hegarty) December 13, 2021

A common theme throughout the meeting was some aldermen supporting the general principle of the ordinance but questioning the need to pass it so quickly, especially with the downtown casino process in its earliest stages. Some also questioned the city’s ability to enforce the standard percentage allotments of vendor contracts awarded to minority, women, veterans, and person with disability-based enterprises, criticizing late language inserted to match the percentages passed in the state version of the Sports Wagering Act.

Because the tax receipts generated from the downtown casino revenue go directly toward addressing the shortfall in the city’s police and fire departments’ pension plans, some aldermen were hesitant to upset potential casino bidders for what they felt was a smaller return of guaranteed money with the sports betting tax revenue — which was projected to be between $400,000 and $500,000 per year.

Alderman Anthony Beale, who has been the most vocal opponent of the ordinance based on its timing after Burnett first filed it in July and re-routed it to this joint committee in the summer, said, “This argument is about what this is going to do to cannibalize our potential casino at a later date. And I’ve said this from day one: We’re jeopardizing dozens of millions of dollars in place of four to five hundred thousand dollars.

“That’s irresponsible for this council to be even entertaining something of this magnitude when we’re looking at supplementing that small amount of money right now,” Beale added, suggesting the city could have a temporary casino in place inside of a year if everything goes according to plan.

Mayor Lori Lightfoot, who is in favor of the ordinance, had Chicago’s chief financial officer, Jennie Huang Bennett, provide reasons for the city’s support. Bennett pointed out that the $10 million license fees for each of the five venues would go into the state’s capital funding plan that impacts city projects. She added that another five liquor licenses and restaurants in a city that already has over 3,800 licensees and 8,000 restaurants does not create a “zero-sum game.”

Bennett also said the ordinance provides “an incremental economic impact of approximately $1 million” per year, while the city’s initial licensing fees and subsequent renewals can be put toward infrastructure.

Next stop: city council for a full vote

The ordinance could come up for a vote at Wednesday’s regularly scheduled city council meeting, but given the number of “no” votes in committee, it is possible a full roll call could be taken. Per city council rules, two aldermen can orally call for a “Defer and Publish” — which is allowed just once on any bill — before roll call to move the vote on the ordinance to the next scheduled meeting.

That next meeting is currently scheduled for January, but Lightfoot could counter that maneuver by adjourning Wednesday’s meeting and calling for one as early as Friday to bring it up again for a vote.

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