Illinois Governor Pritzker signs legislation into law, reducing taxes on Chicago integrated resort’s GGR

Illinois Governor Pritzker signs legislation into law, reducing taxes on Chicago integrated resort’s GGR

Illinois’ Democratic Governor J.B. Pritzker has finally signed the legislation into law that has been designed to trim down taxes on a downtown Chicago integrated resort’s gross gaming revenue (GGR).

The General Assembly of Illinois approved Chicago Casino Tax Bill (Senate Bill 516) during a special session held in the month of May. The SB516 provides for a reduced tax schedule for any new integrated resort casino that will be launched at the Millennium Park in downtown Chicago.

As per the new law, the city and state governments will collectively take 22.5 to 74.7 per cent of the win generated by slot machines at the upcoming gaming venue. The rate will depend on the total GGR generated by the gaming facility. The tax on table games will be charged in the range of 15 per cent to 35 per cent. However, a feasibility study has suggested that integrated resort casino in downtown Chicago would be taxed at an effective rate of 72 per cent. That estimated rate of tax for the downtown Chicago casino is significantly higher than what the suburban casinos would face under the so-called 33.3 “privilege tax” for such entertainment facilities.

When asked whether such a tax schedule would make the license unattractive to potential casino operators, Las Vegas-headquartered Union Gaming said, “To the extent a casino operator could pare down expenses and realize modest revenue and profits from non-gaming amenities, total enterprise profit margin would, in a best-case scenario, likely equate to a few pennies on the dollar.”

Chicago’s Democratic Mayor Lori Lightfoot, who had tabled the bill to trim down the tax obligations imposed on casinos, said the launch of integrated resort in downtown Chicago would create a dynamic new gambling and entertainment district in the city. He added that the new facility would help strengthen the city’s financial future.

The state’s 2019 gaming expansion bill garnered unprecedented support from lawmakers after Gov. Pritzker announced $45 billion “Rebuild Illinois” plan that aims to enhance infrastructure required to attract casino operators.

Gov. Pritzker’s signing of SB516 is widely expected to make the downtown Chicago more attractive to casino operators. Along with the downtown Chicago IR casino, the new gaming law authorized five smaller land-based commercial casinos in five suburbs of the city, viz. Danville, Waukegan, South Suburbs, Rockford and Williamson County.