Over Mayor Brandon Johnson’s strong objections, a City Council committee agreed Tuesday to back legalizing video gaming at more than 3,500 Chicago restaurants, hotels, theaters and bowling alleys.
Johnson promptly declared his opposition to the ordinance muscled through the License Committee by City Council dean Anthony Beale (9th), one of the mayor’s most outspoken critics, by a vote of 8 to 6. The measure would still have to be approved by the full City Council.
Staring down the barrel of a $1.15 billion shortfall after two straight years of deficit spending, the mayor said he nevertheless remains opposed to lifting the Chicago ban on video gaming.
A recent consulting study commissioned by the city concluded that video gaming revenue would be $10 million a year at best, and could actually end up costing the city money because of the impact it would have on slot machines at the casino that Bally’s is building in the River West neighborhood. That’s in part because the tax on slot machine revenue would be nearly four times higher than it is on video gaming terminals.
“We can’t leave millions of dollars on the table. And so, whatever comes from City Council — if it doesn’t maximize the full benefit of what this opportunity could bring to the revenue structure of our city, then I’m not going to be supportive of it,” Johnson told reporters at his weekly City Hall news conference.
“We have seen first-hand when the state of Illinois works to capture more dollars that would have otherwise gone into the local economy… that we have to have better control over to help address the critical needs that we face… I have not seen where this particular idea maximizes our ability to be able to receive as many dollars as possible.”
Beale argued that lifting the Chicago ban would give City Hall the leverage it needs to convince the Illinois General Assembly to make the video gaming tax structure more favorable to Chicago.
In the search for new revenue, Beale argued that authorizing video gaming is a political path of least resistance. It could generate a jackpot of new revenue, even if the tax structure stays stacked against Chicago, he said.
“Are we going to turn our blind eye on $60 million to $100 million? Or are we going to look to raise property taxes, increase ticket fees, increase garbage fees? Or are we going to [be] creative to do something a little different that the city has never done?” Beale told his colleagues. “If we can go to the state and say that now, we’ve put some skin in the game — and ask the state to change the formula.”
The ordinance advanced Tuesday would legalize video gaming terminals at roughly 3,500 establishments licensed as “public places of amusement” where liquor can be sold, but is not the primary source of revenue.
That category includes restaurants, hotels, theaters, arcades and bowling alleys. Those places would be authorized to install as many as six video gaming terminals.
Bars and taverns would be excluded, but Beale said he is open to adding those locations at a later date.
Even without bars, Business Affairs and Consumer Protection Commissioner Ivan Capifali argued that his department needs more time and significantly more resources to administer and enforce video gaming in Chicago. Enforcing the ordinance and seizing illegal terminals would also put an added strain on the Chicago Police Department, Capifali said.
Carl Gutierrez, vice-president of government relations for the Chicagoland Chamber of Commerce, urged the License Committee to bury Beale’s ordinance, which he called a “clear violation” of the city contract that authorized Bally’s to build a $1.7 billion casino and entertainment complex in River West.
Defying that contract would “send a message” to all city contractors that “Chicago is not a reliable partner,” Gutierrez said.
Downtown Ald. Brendan Reilly (42nd) was unmoved by the Bally’s argument.
Reilly argued that Bally’s temporary casino at Medinah Temple has been an “unmitigated disaster” and predicted Bally’s would fail to meet a state-mandated deadline to open the permanent casino next year.
A candidate for Cook County board president, Reilly said he has “historically” been opposed to video gaming amid concern machines would be “too readily available” to gambling addicts.
But he ended up joining the slim majority in favor of Beale’s ordinance to provide a “critical revenue stream” for Chicago restaurants and entertainment venues fighting for survival.
“The city is strangling businesses,” Reilly said, “especially those that serve liquor, with all sorts of taxes and fees and mandates.”