Chicago is one step closer to allowing slot-like video gaming terminals (VGTs).
The City of Chicago Committee on License and Consumer Protection approved an ordinance allowing some companies to pursue VGTs on Tuesday, voting 8–6. Businesses with a valid liquor license are permitted to have six to ten gambling machines under Illinois' VGT statute.
Truck stops can have ten VGTs, while small companies can have as many as six. A casino or racetrack must be at least 1,000 feet away from any company.
Although VGTs have long been prohibited in Chicago, some city lawmakers are moving to legalize the gaming terminals because the Windy City is still dealing with serious financial problems, including a $1.15 billion budget deficit.
"Are we to just sit back and look down the barrel of a $1.5 billion deficit with nothing in sight, or are we to look for additional revenues that don’t affect everyone like property taxes, people driving down the street with tickets, being hit every other day?” asked Alderman Anthony Beale, who represents the 9th Ward. The Chicago Sun-Times first reported Ward’s comments.
“Are we going to turn a blind eye on $60 million to $100 million? Or are we going to be creative to do something a little different, something the city has never done before?” Beale questioned.
Opposition from the Mayor
According to a study the city commissioned, legalizing VGTs could bring in over $67.2 million a year for Chicago. About one-sixth, or 5.8%, of the VGT gross gaming revenue is returned to the local government in Illinois, where a 35% tax is imposed.
Any potential net loss in city revenue from other sources, primarily the Bally's Casino, is not factored into the VGT estimate. While the permanent $2 billion resort is being constructed in the former Freedom Center newspaper publishing factory, a temporary casino is currently open at the Medinah Temple.
Although expenditure keeps rising due to pension financing issues, Chicago Mayor Brandon Johnson, who was once in favor of VGTs but now opposes their authorization, claims the city does not have a spending problem.
“We do not have a spending problem in Chicago. We have a revenue challenge in Chicago,” Johnson said this week.
Bally's Agreement
In May 2022, Bally's was declared the winner of the bidding for the downtown casino in Chicago. The City Council chose Bally's over bids from Rush Street Gaming and Hard Rock International, both based in Chicago.
Legal worries exist that the city's Host Community Agreement with Bally's would be broken if Chicago permits VGTs. Among the conditions are guarantees that the city will not permit the opening of a second casino or any other "mode of lawful gaming" beyond what is already permitted.
VGTs would be a "clear violation" of the Bally's contract and would "send a message" that the City of Chicago "is not a reliable partner," according to Carl Gutierrez, vice president of government relations for the Chicagoland Chamber of Commerce.