Illinois Governor J.B. Pritzker recently signed a package of bills authorizing a $45 billion construction plan to be paid for in part by revenue from expanded gaming—including new casinos in Chicago and the suburbs and legalized sports betting. Pritzker said the gambling bill “responsibly” expands gaming “at the request of cities that want to make sure they have the resources to pay for police and firefighter pensions and to fund vital services.”
Specifically, the legislation calls for $150 million from an increase in video gaming terminal taxes; $10 million from sports wagering revenue; $500 million from upfront license fees from casinos; and sports betting.
It could take several months for the Illinois Gaming Board to issue licenses for new casinos, sportsbooks and expanded gambling at horse racetracks. The process requires conducting extensive criminal background checks and other requirements.
For example, before issuing a license for the Chicago casino, the Gaming Board will conduct a feasibility study and recommend any changes to the terms of the license. These steps may not be completed until the end of the year.
Also, operators will have 120 days to submit license applications for new casinos in Waukegan, the south suburbs, Rockford, Danville and Williamson County. The board could then take up to a year to issue casino licenses. Horse tracks desiring to add slots and table tames will have 60 days to apply, then the board will have 120 days to award the licenses. The board still has to write the rules for applicants that want to run sportsbooks at casinos, tracks or stadiums and online.
Meanwhile, Pritzker will have to fill two vacancies on the five-member board, including chairman, following Springfield attorney Don Tracy’s recent resignation.
The governor’s office has forecast expanded gaming will generate $350 million in additional annual revenue. Those funds will be used to repay bonds sold to cover construction project costs at public schools, state universities and community colleges and other facilities.
Supporters estimated the state would receive more than $2 billion in one-time licensing fees, then receive more than $400 million per year. But the Illinois Casino Gaming Association said the law will lead to further saturation of a market already flooded with video terminals.
ICGA Director Tom Swoik said, “I think the revenue projections are extremely higher than what we’re actually going to see.” Swoik said the new casinos and additional slot machines at horseracing tracks simply will shift bettors to different locations and not attract new business.
Illinois casino revenue has been decreasing for more than a decade, dropping 61 percent from a peak of $699 million in 2005 to $272 million in 2018. Even with the rise of video gambling, overall state gambling revenue rose only about 2 percent over the same period.
Meanwhile, the gaming board will hire a private consultant to conduct a feasibility study about the Chicago casino. Mayor Lori Lightfoot, who has not indicated a preferred location, said, “I’m hoping we can get it done relatively soon, so we can start the process.” State Senator Terry Link, who has promoted a Chicago casino for two decades, stated, “If all goes according to plan, you could see gambling at a temporary site in less than a year.”
The Chicago casino is sure to become the state’s largest, with 4,000 gaming positions, double the 2,000 others are allowed to offer. Each position will cost operators $30,000. That’s in addition to the $30 million upfront licensing fee the chosen developer must pay. Despite those costs, Link said several casino developers have expressed interest in a Chicago location. The law would allow the chosen operator to set up a temporary site for up to two years before its permanent location is completed. “I’d expect them to be well in motion within 12 to 18 months,” Link said.
Under the law, Chicago will receive one-third of the casino’s yearly adjusted gross revenue. The funds will go to Chicago’s severely underfunded police and firefighter pension funds.
The bill also will allow a new racino offering harness racing and casino gambling in south suburban Cook County—the first new Chicago area track to open since 1946.
In Rockford, state Sen. Dave Syverson said, “For the last 10 years we’ve had five states around Illinois that have really declared war on Illinois. They’re intentionally building casinos right on the border, they’re marketing to Illinois and last year $5 billion left Illinois to go to those five surrounding states. What the new law does is allow us to fight back.”
The Ho-Chunk Nation currently is waiting for the Bureau of Indian Affairs to approve its application to develop a $400 million casino in Beloit Wisconsin—just across the state line from Rockford. Ho-Chunk Nation Public Relations Officer Ryan Greendeer said the tribe is unconcerned about the potential competition since, besides a casino, it will offer a waterpark, hotel and convention center. “We know that the expanse of our project is just going to outweigh any concerns that we have about competition in Rockford,” Greendeer said.
But Rockford Mayor Tom McNamara said as soon as an application is certified by the city and approved by the Illinois Gaming Board, the casino will open in a temporary location while the permanent casino is being built. “Probably the earliest you’d see a casino is right before the end of this year or right at the beginning of next year for a temporary setting. And then probably two years later for a permanent facility, assuming an 18 to 24-month construction period,” he said.
The proposed Rockford casino will be authorized to have up to 2,000 positions. It’s expected to create more than 1,500 construction and full-time permanent jobs, McNamara said. “The revenue that the city will get from this can really be anywhere from 4 million to 8 million dollars,” he noted.
Another new casino is slated for development near Carterville in Williamson County. In fact, this was Pritzker’s first stop after signing the expanded gambling legislation. The $300 million casino resort will be built at Walker’s Bluff winery. Owner and Chief Executive Cynde Bunch, who has been lobbying for a casino at the location for more than eight years, said the property will offer two hotels with 330 rooms, an indoor/outdoor water park, convention center, restaurants and a spa. It’s expected to generate $15 million in state and local revenue and create nearly 2,000 construction and permanent jobs.
Additionally, Australia-based global online sportsbook operator PointsBet announced a 20-year partnership with Hawthorne Race Course, a Chicago-area landmark and the longest continuously run family owned racetrack in North America. The agreement will include a retail sportsbook within Hawthorne, plus statewide mobile betting and a PointsBet presence at off-track betting locations.
PointsBet U.S. CEO Johnny Aitken said the firm is “ecstatic” about the opportunity. “Illinois sports fans are diehard in every sense of the word and we are elated to introduce them to our premium sportsbook and our innovative, bettor-first experience. PointsBet will bring its best-in-market proprietary technology, modernized and premium brand mentality, expert trading practices and proven growth marketing strategies to Illinois’ eager sports betting market.”
Hawthorne President and General Manager Tim Carey stated, “Governor Pritzker and the legislature have given us an historic opportunity to transform the Illinois racing industry with the addition of casino gaming and sports betting. It’s an opportunity that we won’t take lightly and that’s exactly why we chose PointsBet as our partner. Our business has survived because we put players first, and PointsBet has proven they do as well. That is how we are going to succeed together.”
PointsBet operates the sportsbook at Meadowlands Racetrack in New Jersey and will run the venue at Catfish Bend Casino in Burlington, Iowa.
