Gov. Pritzker signs new Chicago casino law, reworks tax structures, creates thousands of jobs

Gov. Pritzker signs new Chicago casino law, reworks tax structures, creates thousands of jobs
This bill will fund critical infrastructure and create thousands of jobs across the state. (Source: JACK Cincinnati Casino)

ILLINOIS (KFVS) - Governor JB Pritzker signed SB 516 into law, finalizing a gaming package that paves the way for a Chicago casino by reworking existing tax structures, allowing gaming at the State Fair and providing relief during the pandemic.

This bill will fund critical infrastructure and create thousands of jobs across the state.

“Working with the General Assembly and Mayor Lightfoot, we accomplished what eluded so many others, and now this momentous legislation tackles key priorities for the State of Illinois – helping to ensure that Chicago can pay for first responders’ pensions and alleviate the burden on property taxpayers, along with investing in universities and hospitals throughout the state,” said Governor JB Pritzker. “Thousands of Illinoisans will be working on these projects, earning a good living that will support their families as we do the important work of rebuilding our crumbling infrastructure and investing in the future.”

The bill establishes new Privilege Tax schedules for the Chicago casino and provides tax relief for existing casinos by extending the payment period for reconciliation payments and waiving interest on those payments.

Existing casinos will also find relief from the accelerated Privilege Tax rate structure and the one-year extension of the sports wagering license fee due date.

“By signing SB 516, the Governor has given our statewide capital construction program a big boost, while at the same time providing a measure of financial stability to Chicago’s public safety pensions,” said State Senator Bill Cunningham. “It’s also worth noting that Chicago casino dollars will reduce the pressure placed on city property taxes, which until now have been the only source of revenue for the police and fire pension funds.”

The legislation also seeks to provide relief in the midst of the global COVID-19 pandemic by:

  • Requires the Illinois Gaming Board to reopen the license application process for new casino owners’ licenses if, at any point after June 1, 2020, there are no pending applications for one of the new owners’ licenses and not all of the new owners’ licenses have been issued (rather than if the Illinois Gaming Board does not issue all owners licenses for newly authorized casinos within the specified time period).  Additionally, it requires that, as a part of this process, the applicant for a license make a public presentation to the local corporate authority and post a summary of its casino proposal on a public website. 
  • Increases, from 2 years to 6 years, the payment period for the reconciliation payments owned by new casinos and new organization gaming licensees (“racinos”) as well as new gaming positions purchased by existing casinos and waives interest on the reconciliation payments. The reconciliation payments equal 75% of the Adjusted Gross Receipts (AGR) earned by the casinos during the most lucrative 12-month period in their first three years of operations. Adjusted Gross Receipts are gaming receipts minus amounts paid to winners. 
  • Provides that the new, lower privilege (wagering) tax schedule enacted by P.A. 101-0031 shall take effect on July 1, 2020 instead of the first day that one of the newly authorized casinos begins operations, either in a temporary or permanent facility.  This acceleration of the implementation of the lower Privilege Tax schedule will apply to all existing Illinois casinos.  
  • Provides that amounts paid by organization gaming licensees (“racinos”) to their purse accounts as required by Section 56 (b) (1) of the Horse Racing Act of 1975 [203 ILCS 5/56 (b) (1)] shall not be counted as part of their AGR for tax purposes. 
  • Amends the Sports Wagering Act by delaying, from July 1, 2020 to July 1, 2021, the deadline for payment of the initial sports wagering license fee by an organization licensee or an owner’s license (for a casino). 
  • Extends the July 1, 2020 deadline for the payment of additional casino gaming positions. Each of the State’s current casinos can reserve up to 800 additional positions. 
  • Provides that, from the tax revenues received by the State Gaming Fund from the Chicago casino, an amount equal to 0.5% of AGR shall be paid to Cook County for the purpose of enhancing its criminal justice system, and the balance shall be paid to the City of Chicago for required pension payments in accordance with Public Act 99-506.

SB 516 takes effect immediately, with new Privilege Tax rates for table games to begin on July 1, 2020.

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