A special legislative session
The Illinois legislature held a special session over the weekend amid the ongoing coronavirus pandemic that lasted into the early hours of Sunday morning. During the session, the state’s lawmakers approved a $40bn state budget and laid the groundwork for the go-ahead on a casino in Chicago.
Both the Senate and House passed Senate Bill 516 on Saturday that would alter the tax structure for a casino in Chicago. This was one of the main obstacles that had been stalling the development of a casino in the city limits.
Chicago Mayor Lori Lightfoot has been pushing hard for these changes for some time. She tweeted a statement following the bill’s passage:
Expected approval from Pritzker
The legislation now goes to Illinois Governor J.B. Pritzker’s desk, who already promised that he would sign the bill into law. The development of a casino in Chicago was a key part of the $45bn capital bill that was passed in June 2019.
This is good for everyone for jobs and development — having a Chicago casino be real.”
Speaking about this latest step forward for a casino in Chicago was Democratic Representative Bob Rita, one of the sponsors of the bill. He said: “This is good for everyone for jobs and development — having a Chicago casino be real.”
Changes to the casino tax structure
The Illinois Gaming Board commissioned a feasibility study when the idea of developing a casino in Chicago was proposed. Las Vegas-based gaming consulting firm Union Gaming conducted the study.
The feasibility study concluded that an effective tax rate of 72% would be needed. This would be composed of a 38.7% tax on casino win as well as a 33.3% privilege tax that would go towards the funding of first responder pensions.
This new bill decreases the tax rate suggested in the study to make operating a profitable Chicago casino more feasible. In turn, projected tax revenue would drop from about $850m to $500m annually.
Casino revenues received by the city of Chicago would go towards funding firefighter and police pension funds. Cook County’s allocation of revenue will go towards criminal justice system funding.
Gambling expansion in Illinois
As part of the $45bn capital bill passed in June 2019, a number of other gambling expansion policies were introduced. Both mobile and retail sports betting were legalized. Controversially, the bill blocked the likes of DraftKings and FanDuel from launching during the first 18 months of the state’s regulated sports betting industry.
The aim of the bill was to generate $12bn in tax revenue
There was also a provision for the development of six casinos across Illinois and for allowing racetracks to offer table games and slot machines. The aim of the bill was to generate $12bn in tax revenue for the state over the next few years.
