information provided by the Office of the Governor
CHICAGO, Ill. (July 4, 2020) – Earlier this week 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. The Governor’s office says this bill will fund infrastructure and create jobs.
“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,” said Governor Pritzker.
“The Chicago casino has now become law,” said Chicago Mayor Lori Lightfoot, “paving the way for a transformative new funding source for Illinois’ infrastructure, as well as helping shore up Chicago’s own significant pension obligations, in addition to serving as the impetus for a dynamic new entertainment district in our city.”
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.
The new Chicago casino tax schedule is as follows:
Slots
Table games
Other changes included in the legislation include allowing the Illinois Department of Agriculture (IDOA) to operate video gaming terminals at the Springfield and Du Quoin State Fairs. IDOA will select Illinois Gaming Board-licensed terminal operators pursuant to the Illinois Procurement Code for an operational period of three years. Monies bid by the terminal operators will be deposited into the State Fairgrounds Capital Improvements and Harness Racing Fund. Terminal operators will still be able to operate up to 50 video gaming terminals (VGTs) at the Springfield State Fair and up to 30 VGTs at the Du Quoin State Fair.
The legislation also seeks to provide relief in the midst of the global COVID-19 pandemic through the following measures:
- 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 (i.e., owner of a racetrack) or an owner’s license (for a casino).
- Extends the July 1, 2020 deadline for the payment of additional casino gaming positions. Positions within Cook County are $30K. Positions outside of Cook County are $17,500. 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.
