by Todd Feurer, CBS Chicago web producer
CHICAGO (CBS) -- Chicago will lift its ban on sports betting, after the City Council on Wednesday approved a plan to allow sportsbooks to be set up in or near the city's five professional sports stadiums, despite warnings from at least one bidder for a future Chicago casino.
Billionaire casino magnate Neil Bluhm, who owns Rivers Casino in Des Plaines and is among the bidders for a Chicago casino, has warned that allowing sports betting in Chicago would mean the city's casino would lose significant business, costing the city $11 million to $12 million in annual tax revenue, far more than the $400,000 to $500,000 in tax revenue that would be created by the city's proposed 2% tax on sports books.
"I can assure you as an experienced casino and sportsbook operator, that this ordinance will cost the city of Chicago serious money," Bluhm told aldermen during a committee meeting on Monday, claiming the ordinance would essentially create five "mini-casinos" that would take away visitors and money from a Chicago casino.
However, Mayor Lori Lightfoot and her top aides have disputed Bluhm's claims, pointing to a study by Las Vegas-based Union Gaming, which found allowing sports betting in Chicago would not have a significant impact on casino revenue.
Union Gaming co-founder Grant Goverston told aldermen last week that the study analyzed six states that legalized sports betting to determine its impact on traditional casino revenue, and found that some states saw an increase in revenues at casinos, while others saw a decrease.
Cubs chairman Tom Ricketts called in to Wednesday's City Council meeting to urge aldermen to back the sports betting ordinance, saying it would allow the Cubs and the city's other sports teams to build sports bars and restaurants that feature betting windows.
"These are not mini-casinos in any way. They will not have slot machines, card games, roulette wheels, or table games. The sportsbooks will, however, have a large and positive impact on the city. This ordinance will create jobs today," Ricketts said.
Ricketts said the Cubs already have plans in place to immediately begin construction on a sportsbook outside Wrigley Field, and expect it to be open in time for the 2023 season. He said the project would create hundreds of temporary construction jobs, and about 400 permanent jobs once the sportsbook opens.
The owners of the Cubs and most of the city's other pro sports teams also have disputed that sportsbooks in Chicago would hurt a future Chicago casino.
"This will not have an economic impact on the viability of any potential future Chicago casino. The fact is sports gaming is less than 2 percent of casino revenue, and here was no evidence that even that would be affected by this ordinance," Ricketts said.
At a committee meeting on the ordinance on Monday, Bulls and White Sox chairman Jerry Reinsdorf essentially accused Bluhm of hypocrisy, claiming the casino operator previously had met with him and other sports team owners in Chicago in an effort to operate sportsbooks in their stadiums.
"That was long after the casino was approved for Chicago. At that time, he 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?" Reinsdorf said.
The sports betting ordinance would allow sportsbooks to be set up at the city's five major sports stadiums – Guaranteed Rate Field, Soldier Field, the United Center, Wintrust Arena, and Wrigley Field – or at a permanent location within five blocks of those arenas.
Sportsbooks would be limited to 15 betting windows per facility, and the city would collect a 2% tax on gross revenues from sports betting – on top of the 15% state tax and 2% Cook County tax. City officials estimated sports betting in Chicago would generate approximately $20 million to $25 million in annual revenue for the sports books, meaning $400,000 to $500,000 in tax revenue per year for the city.
A sportsbook also would be allowed at the Chicago casino when it's built.
Lightfoot dismissed criticisms from some aldermen who accused her administration of trying to rush the measure through the City Council last week without addressing their concerns.
"We did the research over and over, engaged with aldermen and other stakeholders, and looked at it from truly every possible angle," she said. "This will be a great endeavor for our city that will undoubtedly stimulate economic development, and I'm glad that we can make this happen."
Several aldermen had also voiced concerns that the sports betting ordinance does not require companies owned by minorities or women to get a specific share of sportsbook construction and operations contracts.
Rather, the ordinance only requires the city to "actively seek to achieve racial ethnic and geographic diversity when issuing primary sports licenses" and requires sportsbook operators to provide annual reports on all procurement goals and spending by minority- and women-owned partners.
Lightfoot noted the state law allowing for sports betting operations in Illinois gives the city limited control over licensing such facilities, and said critics who want more guarantees for minority- and women-owned business participation should lobby Springfield for changes in state law.
The mayor noted state lawmakers approved sports gambling in Chicago in 2019, just days after she took office, and she said there was "ample opportunity for the critics to weigh in at that point."
"A lot of the people who are complaining now didn't raise a single word of criticism back then," she said.
After Wednesday's vote, Ald. David Moore (17th), one of only a handful of aldermen to vote against the sports betting ordinance, lamented that sports team owners would not give him direct answers when he asked them for commitments to investing in the city's neighborhoods, particularly Black and Brown communities, as part of allowing sports betting in Chicago.
"I do want to see those owners more active in our community, so that when we get to things like this, that we can be supportive," Moore said. "If we're not trying to be intentional about bringing partners on, if we're not trying to be intentional about investing in communities, then those are the things that I don't want to support."
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