In advance of the Illinois legislature’s upcoming veto session, Chicago Mayor Lori Lightfoot met with state lawmakers from the Windy City to discuss two proposals “to help ensure the Chicago casino is viable,” she said.
One option would make the casino a “public structure” with the city and state sharing the gaming license; the other option would have the casino privately owned and operated. Either proposal would require the state legislature to approve lower taxes than the rate included into the new gambling law Governor J.B. Pritzker signed earlier this year. “We’re looking at two different models, obviously changing the tax structure so that a private operator can be successful and we’ll see what happens,” Lightfoot said.
The mayor said she wants the legislature to reduce the effective tax rate on a Chicago casino from 72 percent to 45 percent, with 51 percent of tax revenue going to the state and the 49 percent to the city. Earlier this month a feasibility study called the 72 percent tax rate “very onerous.”
House Majority Leader Greg Harris said Lightfoot’s proposal to lower the tax rate will face challenges since the same tax structure would apply to the state’s 10 existing casinos and horse racetracks and the six new casinos authorized in the new gambling bill.
“It’s going to be a big lift to get it done this fall,” Harris said. He added setting up a joint city-state entity to hold the casino license would “be a bit leap.”
Several lawmakers at the meeting also raised concerns about the ethics of the city and the state being directly in the casino business, Harris said. Pritzker’s spokeswoman Emily Bittner said the governor “remains open to a number of approaches for making the Chicago casino successful, but with regard to public ownership, our administration would need to ensure that the challenges of public ownership are fully understood and addressed.”
Lightfoot said he wants to reopen talks about public ownership to give Pritzker and legislators options. “We don’t want to just say, ‘Hey here’s a problem, you legislature, you governor, fix it.’ It’s incumbent upon us to take responsibility and we’ve done that I think in a responsible way by giving two options that the legislature can choose from,” Lightfoot said.
State Rep. Bob Rita, the chief sponsor of the new gambling law, said a Chicago casino deal could be accomplished during the veto session. “There’s a lot of time left, even though the clock is ticking. What we need to do is get the stakeholders together and see how we can work through some of the issues we faced in the spring. You propose one idea, it creates three other issues. You have to have the right mix,” he said.
Harris noted, “Everything about casinos is complicated. To the extent that this is also complicated, I wasn’t really surprised. Any casino bill is always a big lift in the legislature. We’ve seen that for years and years. So, we’ll have to wait and see. At least now there is a proposal for people to react to. That’s helpful.”
In a recent radio interview, Lightfoot said a Chicago casino has the potential to become a “structural fix” for under-funded police and fire pensions and become a “transformative way to address” skyrocketing city payments to those funds. But that requires a more reasonable tax on a Chicago casino.
“People recognize that we’ve got to change the structure. Now, we’re just thinking about, how do we do that. We’ve got two vehicles that we’re looking at. They’re very different. But I feel like we’re in a good position headed into the veto session,” Lightfoot said.
