The Chicago casino tax structure that has been deemed excessive by an independent gaming industry firm that conducted a feasibility study on the project will remain in place, at least for the time being.
The Illinois General Assembly passed a far-reaching gaming expansion package earlier this year that was signed by Gov. J.B. Pritzker (D). The legislation authorized an integrated resort in Chicago, as well as five smaller regional casinos.
But under the terms of the law, the Windy City casino would struggle to make ends meet, or so says Union Gaming, the Nevada gaming consultancy hired by the Illinois Gaming Board (IGB) to review the regulations passed by the state’s legislature.
In its feasibility report, Union said, “In a best-case scenario,” the casino operator’s massive investment would earn pennies on the dollar. That’s due to an effective tax on gross gaming revenue (GGR) of 72.3 percent.
Chicago Mayor Lori Lightfoot (D) went to Springfield this week in a last-minute effort to convince state lawmakers to amend the tax structure law set for her city’s casino. Little progress was made.
She has the support of Pritzker, who said the casino resort would be good for both Chicago and the state. He remains hopeful that a revised tax structure will eventually be passed. But on Thursday, the Illinois General Assembly called it a year in Springfield.
While we are disappointed that a much-needed fix to the gaming bill won’t be made during this compressed veto session, the Chicago casino is still very much in the sightline thanks to the progress we’ve made with our state partners,” Lightfoot said.
“After 30 years of only being talked about, our proposal has moved Chicago closer than ever to bringing much-needed relief for our police and fire pension funds, while unlocking significant economic opportunity for our communities and capital funding for our entire state,” the mayor added.
It’s that police and firefighter pension that is the main cause of the casino tax dilemma. Unlike the other five regional suburban gaming properties issued under the law, the Chicago casino would be subjected to a 33 percent “privilege tax” that is to be used to fund the pensions for the first responders.
Republicans Counter Lightfoot
Lightfoot’s visit to Springfield was a rather scarce occurrence for a sitting Chicago mayor. The state and Windy City have long been at odds, and her predecessor, Rahm Emanuel (D), rarely visited the state capital.
Though the Illinois General Assembly is heavily controlled by the Democrats – the party accounting for 40 of the 59 Senate seats, and 73 of the 118 House seats – Republicans say Lightfoot hasn’t reached out to them for help on the Chicago casino arrangement.
“The city of Chicago has not approached me once,” Rep. Tim Butler (R-Springfield) told the Chicago Tribune. “Not a phone call, not an email, not a meeting to talk about the Chicago casino.”
“I think what you’ve heard our folks say is, ‘We’re willing to help.’ We want a Chicago casino,” Butler added.