ILLINOIS SPORTSBOOKS CAN LAUNCH RETAIL SPORTSBOOKS AT CHICAGO STADIUMS

At retail sportsbooks in stadiums throughout Chicago, Illinois sports betting can now launch. A few days ago, an ordinance lifting a ban on stadium sportsbooks was approved by the Chicago City Council. This approval did not need a debate, despite the fact that there were several months of discussions surrounding this issue.

Under Illinois sports betting law, stadium sportsbooks are legal. However, this move by the city of Chicago took over two years to accomplish. There were some staunch opponents to this move, which included the co-founder of Rush Street Gaming, Neil Bluhm. So, the approval was not entirely certain.

Sports betting at the sportsbooks will see a 2% tax rate from the city. Within a five-block radius of certain Chicago facilities, retail sportsbooks will be able to open. These five facilities are: Wintrust Arena (Sky), Soldier Field (Bears), Wrigley Field (Cubs), Guaranteed Rate Field (White Sox), and United Center (Bulls, Blackhawks).

The Chairman of the Chicago Cubs, Tom Ricketts, anticipates that a DraftKings Sportsbook at Wrigley Field could be launching for the start of the 2023 MLB season. He also indicated that this new sportsbook would be more of a restaurant and bar, versus a mini-casino.

Neil Bluhm, the co-founder of Rush Street Gaming, has made it clear he is against sportsbooks opening at stadiums. He has also indicated his opposition to online registration, which is set to expire by March 2022. His opposition comes from the fact that he believes these mini-casinos will divert revenue from the Chicago area casinos, which includes a new casino development within Chicago.

Two of the five proposals for this new Chicago casino include Rush Street. The city of Chicago is set to hold a public hearing on these proposals. Bluhm has stated that he feels the city could lose $10 million to $12 million per year and the new Chicago casino could have its success impacted. He feels it is a big risk with zero reward and urged a no vote on the ordinance.

However, according to a study from the Union Gaming Analytics, the new Chicago casino would not lose more than $4.3 million to these new stadium sportsbooks. And, Bluhm’s stance represents a change of heart. According to the chairman of the Chicago White Sox and Chicago Bulls, Jerry Reinsdorf, Bluhm had previously approached team owners about wanting sportsbooks to launch at the venues.

Because of this reversal of stance, Reinsdorf is confused. He also indicated the fact that at the time, Bluhm had no reassurance that his company would be chosen to operate the Chicago casino and he was looking to get sportsbooks into the venues. He was not concerned at that time that the stadium sportsbooks would cannibalize the Chicago casino’s profits.

Both Rush Street’s Rivers Casino as well as BetRivers Sportsbook are partners of the Chicago Bears. As recently as last month, Mayor Lori Lightfoot indicated her support of the ordinance, against Bluhm’s opposition. Mayor Lightfoot feels that the new casino will be able to bolster the police and fire department pension funds in Chicago. At this time, these funds are close to insolvency, so the revenue from the Chicago casino would contribute to them.

Critics have come out of the woodwork to voice their concerns that the city tax rate of 2% is not enough. One such critic is Pat Dowell, the Budget Committee Chairwoman. She feels that that tax rate will only allow sports betting to bring peanuts to Chicago.

Mayor Lightfoot has indicated that the sports betting tax from Chicago should help ease nerves when it comes to gambling cannibalization. Current projections indicate that the tax would be able to produce up to $500,000 per year. This money should help fund the public safety pensions.

In October, bets in Illinois reached record highs at $840.4 million. This is according to an Illinois state report released this month. Plus, during the month, sportsbooks were able to generate $48.3 million, a record when it comes to sports betting revenue.

DraftKings was a leader in the market, taking in $308.8 million in online handle. DraftKings also has the potential to gain a lucrative sportsbook location at Wrigley Field. The Illinois sports betting market could see gains from the opening of Illinois sportsbooks at these Chicago stadiums. A monthly handle boost is expected from the expiration of the in-person registration rule soon.

Written by Allie Nelson, our US Sports Betting Industry Expert. You can learn more about our author's expertise here.