Chicago Closer to Building a Casino

Lawmakers in Illinois have included changes to the tax structure of a proposed Chicago casino this week in an effort to get the project off the ground. The legislation, which was approved during last weekend’s budget-focused session, was seen as a necessity to motivate potential developers to build in Chicago.

A roulette wheel at a casino with chips around it.

Illinois lawmakers have approved of a bill that will change the tax rate and fee structure of a proposed Chicago casino in order to encourage developers to invest in the project. ©Meineresterampe/Pixabay

The legislation will also delay the due time for a number of fees and payments for new Chicago casino investors. Gaming applicants will now no longer be required to pay licensing fees until July 1, 2021, one year later than current measures stipulate.

Casino owners will also extend the deadline to pay a reconciliation payment outlined in Illinois’ recent gambling expansion bill from two years to six years. According to Chicago’s Mayor Lori Lightfoot, all of these changes were necessary if a new casino in the city was going to be viable.

The legislative win is seen as a major victory for Lightfoot, who had never held an elected office position before being voted in as Chicago’s 56th mayor. After a study revealed that a new Chicago casino would pay an effective tax rate of 72 percent under current legislation, Lightfoot spearheaded changes to the law.

The bill promises to provide relief for Chicago’s police and fire pensions, which have been struggling in recent years. According to Lightfoot, the creation of a casino was instrumental in resolving the pension budgetary issues, as a casino would offer “a structural solution to address long-term problems” as opposed to a one-time fix.

“With critical votes this evening, the Illinois state legislature has passed a bill that makes the possibility of a financially viable Chicago casino a reality. This moment is decades in the making, and represents a critical step toward shoring up our city’s pension obligations, as well as driving huge levels of infrastructure funding and fueling thousands of new jobs for all of Illinois.”Lori Lightfoot, Mayor, Chicago

The House passed the bill early on Saturday, where it moved to the Senate. The Senate overwhelmingly approved of the changes in the late evening with a 42-14 vote. Illinois’ Governor J.B. Pritzker, who has been a leading proponent of gambling expansion in the state, vowed to sign the bill as soon as he could.

Governor Pritzker has highlighted the bill as being key to last year’s Rebuild Illinois capital bill, a six-year, $45 billion plan to upgrade the state’s infrastructure. Pritzker also described the gaming legislation as providing “a reliable funding stream” to the construction plan and will bring hundreds of millions of dollars in needed revenues a year.

Springfield Republican Representative Tim Butler also described the Chicago casino as being essential for the state due to its role in funding the Rebuild Illinois plan. It is expected that the bill changes will send $500 million in annual revenues to the program, amounting to roughly $3 billion.

This would be in addition to the $145 million in licensing fees required by the new casino as well as an extra $700 million in reconciliation payments to be made over the six-year period. Outside of the Chicago changes, the bill also provided technical changes for the proposed Danville casino.

Illinois’ current casinos are temporarily shut down as a part of the nation’s widespread non-essential business closures to contain the coronavirus pandemic. This weeks’ special budget session was called to address much-needed changes incurred by the economic impact of the coronavirus so far.

Other Budgetary Issues Addressed

Other bills in the special session addressed helping other industries and sectors affected by the coronavirus closures. One bill, which was approved 104-6 in the House and unanimously in the Senate, aids restaurants and bars forced to close their dine-in services during the pandemic.

The bill allows establishments with liquor licenses to sell cocktails for pickup and delivery through their own services. Current liquor licenses will also be extended for 120 days, with license fees not required until six months after restaurants and bars are allowed to reopen to the public.

While local school districts won’t receive the boost in state aid promised in 2018, public health and welfare departments will receive increases in funding. The Department of Human Services will receive $683 million to help hire 300 new caseworkers to process subsidized healthcare eligibility claims through Medicaid.

The Illinois Department of Public Health will see its budget increased to $1.6 billion with the help of $416 million in federal funds earmarked for coronavirus testing and treatment services. The legislation will also allow for Governor Pritzker to move agency funds around as he deems fit.

The budget was passed through the House with a majority of 68-44. In the Senate, the budget was opposed by all Republicans, though it still managed to pass by a 37-19 majority. Republican Senators objected to the increase in state spending as well as a sweeping increase in Pritzker’s legislative authority.

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