Ald. Beale says Johnson team is working behind the scenes to repeal video gambling

The prime mover behind lifting the Chicago ban on video gambling terminals said Friday Mayor Brandon Johnson’s administration is working behind the scenes to repeal it.

The $16.6 billion, 2026 budget approved by a City Council majority that rejected Johnson’s corporate head tax assumed that Chicago would generate $6.8 million by licensing newly legalized video gambling terminals across the city.

That’s based on the assumption that 80% of the 3,300 eligible establishments with off-premise liquor licenses will apply, but that the Illinois Gaming Board would take six to eight months to grant those licenses.

Johnson has yet to provide the official notification to the state needed to trigger the licensing process. Ald. Anthony Beale (9th), who's leading the charge for video gambling, thinks he knows why.

“They’re behind the scenes secretly trying to repeal this. Why? I don’t know. The mayor has an obligation to execute the budget that we passed. That is his responsibility as mayor. Not to pick and choose what you want to enforce and what you don’t want to enforce,” Beale told the Sun-Times.

The City Council dean predicted that Johnson would back off instead of risking yet another political defeat on the heels of the budget rebellion.

“I don’t think he calls it… They’re savvy enough to know that, if they don’t have the votes, don’t call it,” Beale said. “They’ve learned the error of their ways about calling things that you don’t have the votes for.”

Newly appointed Ald. Walter “Red” Burnett (27th) represents a Near West Side ward that includes the $1.7 billion Bally’s casino and entertainment complex under construction in River West. He supports the repeal, citing public safety and gambling addiction concerns as well as the potential to, as he put it, “cannibalize” Bally’s casino revenues.

He predicted that the City Council will vote to repeal the video gambling portion of the budget, if not this month then in March.

“I don’t think it’s a political risk. I think it’s something that it necessary,” Burnett said of the repeal.

Senior mayoral adviser Jason Lee told the Sun-Times this week that a video gambling terminal plan that “everyone could live with would require significant work” and that repeal is “one of the remedies” under discussion.

“There are a lot of different things that need to be considered in a sustainable” plan “from a fiscal standpoint, from a zoning standpoint, from a distribution standpoint, from an equity standpoint,” Lee said. “None of those things were worked out in the existing ordinance. So all of those things need to be considered.”

Lee was asked whether the Johnson administration has the 26 votes needed for a repeal — or 25 votes if the mayor is willing to cast the tie-breaker.

“I’m saying [there are] conversations we’re having about solutions to deal with some of the challenges in the legislation, and one potential option is repeal. I didn’t say that’s the route we’re going. Conversations are still being had,” Lee said.

Bally’s has warned that lifting the Chicago ban on video gambling terminals would cost the cash-strapped city $74 million in annual revenue and as many as 1,050 jobs at its temporary and permanent casinos.

That’s because it would force the Johnson administration to renegotiate “critical elements” of its host agreement with Bally’s and wipe out a yearly $4 million lump sum payment from Bally’s — and shrink the jackpot needed to save police and fire pension funds.

Beale dismissed the Bally’s warning as a scare tactic from a company that has so far generated just $35 million in gambling tax revenue for police and fire pension funds.

“Are we supposed to just sit back and wait for Bally’s to fail? They have a history of under-performing. When we have a $1.6 billion deficit staring us down next year, are we supposed to just wait and not try to generate revenue? What are we gonna do — just continue to raise taxes on the backs of the people who already can’t afford `em?" he said.

Last year, a study commissioned by the city concluded that video gambling revenue would be $10 million a year at best, and could actually end up costing the city money because of the impact it would have on slot machines at the permanent casino.

The study noted that the tax on slot machine revenue would be nearly four times higher than it is on video gambling terminals.

That’s apparently why Budget Committee Chair Jason Ervin (28th) branded video gambling a “net loser for the city.”