Illinois governor signs capital plan that includes massive gambling expansion
28 June 2019
(PRESS RELEASE) -- Surrounded by lawmakers of both parties and representatives from the business community and labor movement, Governor JB Pritzker signed Rebuild Illinois into law, the most robust capital plan in Illinois history and the first in nearly a decade.
The historic plan was passed with vast bipartisan supermajorities and will make $45 billion worth of investments in roads, bridges, railways, universities, early childhood centers and state facilities like the crime lab and veterans' homes over the next six years, creating and supporting an estimated 540,000 jobs over the life of the plan and revitalizing local economies across the state.
"With this historic $45 billion capital plan, we're fixing decades-long problems, creating good jobs, improving communities for the next generation - and doing it together, across party lines," said Gov. JB Pritzker. "The Rebuild Illinois plan transforms our state's approach to transportation infrastructure, finally treating our roads, bridges, and railways like 21st century investments and not relics of the past. We're also making critical investments in our higher education institutions, our crime lab and veterans' homes, early childhood centers, and expanding broadband access to communities across Illinois. With these investments, we're creating and supporting hundreds of thousands of new jobs in our state. This is more than an infrastructure plan. This is a job creation plan the likes of which our state has never seen."
"With this law, communities across the state gain needed economic development and we become more competitive," said Sen. Terry Link (D-Indian Creek). "This investment in Illinois was overdue. A lot of people have waited a long time for this day to arrive. I'd like to thank my colleagues and Governor Pritzker for making it happen."
"I am proud to join Gov. Pritzker, Sen. Link and our many dedicated advocates in communities that will benefit greatly from the gaming expansion package in Senate Bill 690," said Rep. Bob Rita (D-Blue Island), the lead gaming negotiator for the House Democrats. "This is a testament to bipartisan work in Springfield to create jobs and bring new entertainment and tourism dollars to areas that desperately need it around the state. Thank you to everyone who made this victory possible."
The Rebuild Illinois package consists of four bills: HB 62, appropriations for capital projects; SB 1939, revenue for horizontal construction; HB 142, bond authorization; SB 690, gaming expansion, including revenue for vertical construction.
A detailed fact sheet is attached, and an overview of key elements can be found below.GAMING EXPANSION OVERVIEW
Gaming expansion will lead to thousands of new jobs in communities across Illinois and greater economic opportunity for Chicago and northern, central and southern Illinois. It will provide the state and local governments with hundreds of millions of dollars in new revenue that will be dedicated to critical investments in infrastructure across the state, including affordable housing, hospitals, universities, and state facilities.
Through gaming expansion, Illinois will join 14 other states in legalizing sports betting while expanding other new opportunities for gaming, including the authorization of six new casinos that will create thousands of construction jobs and full-time, permanent jobs for Illinoisans and encourage project labor agreements. Gaming expansion will ensure Illinois remains competitive among Midwest states.Senate Bill 690SB 690
legalizes sports wagering, expands gaming, and provides for the vertical revenues in the Rebuild Illinois Capital plan.
Legalization of sports wagering: Illinois is joining 14 other states, including Indiana and Iowa, in legalizing sports betting, allowing all casinos, racetracks, and sports venues that hold 17,000 people or more a brick-and-mortar license to operate a sportsbook. All licensees will be allowed to go online immediately upon being licensed by the Illinois Gaming Board. For the first 18 months after the first licensee is operating, all accounts must be set up at a licensed gaming facility. Within 540 days of the first license being awarded, the Gaming Board can accept applications for one of three online sports wagering operator licenses. Official league data will be allowed, betting on Illinois college teams will be banned, and a lottery sports wagering pilot program will be created.
SB 690 also imposes a 15% tax on adjusted sports wagering receipts for each month, with an additional 2% tax for wagers in Cook County.
The Illinois Lottery will be granted a master license that will allow lottery sports betting terminals in 2,500 retail locations in the first year and 2,500 in the second year across the state. This license is for 4 years and must be competitively selected.
Sports betting is estimated to generate approximately $58-102 million annually, which will be dedicated to much-needed infrastructure projects across the state, including universities, affordable housing, and hospitals.Sports Wagering Disparity Study and Supplier Diversity
: The Illinois Gaming Board must conduct a study of the online sports wagering industry and market to determine whether to implement additional measures aimed at promoting diversity. The Board will evaluate race and gender-neutral programs or other methods that may be used to address the needs of minority and women applicants and minority-owned and women-owned businesses seeking to participate in the sports wagering industry. The study must be conducted by December 31, 2019 and published by March 1, 2020.
To ensure supplier diversity efforts are made, the bill requires all licenses under the Sports Wagering act to submit an annual report beginning April 15, 2020 on all procurement goals and actual spending for female-owned, minority-owned, veteran-owned, and small business enterprises in the in the previous calendar year to the Gaming Board. The Gaming board and all licensees must hold an annual, public workshop starting in 2020 on the state of supplier diversity.
Authorization of licenses for land-based casinos: SB 690 authorizes licenses for six new casinos - in Chicago, Waukegan, Rockford, the South Suburbs, Williamson County (Walker's Bluff), and Danville - and authorizes revenue-sharing with local municipalities. New casinos will be allowed up to 2,000 positions immediately, except for Walker's Bluff, which is capped at 1,200, and the City of Chicago, which will be allowed up to 4,000 positions, including slots at Midway and O'Hare Airports. Horse tracks will be allowed 1,200 positions, and Fairmount 900 positions. Each of these casinos will be privately owned, and the Illinois Gaming Board will have oversight. SB 690 also implements a new tax structure for table games.
City of Chicago's share of casino proceeds includes an additional privilege tax of 33% of AGR and will be dedicated to their police and fire pension funds, which are among the pressures driving escalating property taxes in Illinois. SB 690 also requires a feasibility study to be conducted by the Illinois Gaming Board.
Municipalities will play a significant role in shaping the establishment of new casinos across the state. In order to secure a license, the corporate authority of the municipality or the county board in which the riverboat or casino will be located must certify that the applicant negotiated in good faith and that mutual agreement was reached on the permanent location of the riverboat or casino, the temporary location of the riverboat or casino, the percentage of revenues that will be shared with the municipality or county, if any, and on any zoning, licensing, public health , or other issues that are within the jurisdiction of the municipality or county. Applicants must also submit documents, resolutions or ordinances, and letters of support from the governing body of the municipality or county where the licensee will be located.
Casinos will create thousands of construction jobs and full-time, permanent jobs, including an estimated 4,000 jobs in Chicago, over 1,500 in Rockford, nearly 2,000 in Walker's Bluff, and 1,000 in Danville.Expansion of video gaming terminals (VGTs)
: This proposal protects small businesses and enables the state and local municipalities to gain much-needed capital revenue by raising the VGT tax by 3 percentage points, from 30% to 33%, in the first year and to 34% in the second year and beyond. The legislation also allows establishments to have up to six video gaming terminals, increases the maximum wager from $2 to $4, elevates the maximum cash award from $500 to $1,199, and authorizes an in-location progressive jackpot up to $10,000. Video gaming will be allowed on the Fairgrounds only during the Illinois State Fair and will be capped at 50 machines.Expansion of gambling at horse tracks:
SB 690 provides needed support to the Illinois horse racing industry, which will create jobs and keep the industry competitive. Fairmount will be able to increase their live racing dates to 100, up from 40.Ethics:
SB 690 makes administrative changes to the Illinois Gaming Board and Racing Board, including strengthening the ethics laws on members of the General Assembly, state employees, and members of the Gaming and Racing Boards, implementing a surcharge on the exchange of any gaming or racing licenses until 2027, and sourcing any non-resident gaming or racing winnings to Illinois if they are required to notify the IRS.Parking garages:
Introduces a 6% tax on daily and hourly garage parking and a 9% tax on monthly and annual garage parking. Parking garages are not currently taxed at the state level. This tax will generate $60 million in new annual state revenue.Traded-in property exemption:
Introduces a $10,000 cap per trade-in transaction on first division vehicles. Currently, traded-in property provides a sales tax exemption on the purchase of property up to the value of the property traded in. This cap will generate $40 million in new annual state revenue. Raises the documentary fee from $150 to $300 and indexes it to CPI, which may be imposed on buyers for the handling of closing documents of a sale of a motor vehicle.
Cigarettes: SB690 increases the per-pack cigarette tax by $1, from $1.98 to $2.98, effective July 1, 2019. This increase will generate $160 million in new annual state revenue.Casino Gaming, Video Gaming, and Sports Wagering:
Ongoing revenues from the gaming expansions included in SB 690 are estimated to total at least $350 million annually at full implementation and will support expected vertical capital debt service. Upfront revenues from license fees are scheduled to support pay-go capital costs.Sales tax parity:
SB690 includes mechanisms to increase compliance for "remote" online retailers collecting state sales tax beginning July 1, 2020. Annual estimates for increased state sales tax collections are $200 million.Data Centers:
SB 690 allows an exemption from sales and electricity taxes for data centers who have or plan to make a $250 million investment in Illinois. If a data center is seeking an exemption for the construction or rehabilitation of its structure, the data center must require all contractors and subcontractors to comply with the responsible bidder sections of the Illinois Procurement Code. SB 690 also creates 20% income tax credit against wages if the investment by the data center is in an underserved area. The bill requires an annual report to the Governor and the General Assembly on the tax credit's outcome and effectiveness.Capital diversity provisions:
SB 690 creates the Illinois Works Jobs Program Act, which includes the Illinois Works Preapprenticeship Program and the Illinois Works Apprenticeship Initiative.
The goal of the Illinois Works Preapprenticeship Program is to create a network of community-based organizations throughout the State that will recruit, prescreen, and provide preapprenticeship skills training to create a qualified, diverse pipeline of workers who are prepared for careers in the construction and building trades. The Illinois Works Preapprenticeship Program will be funded by a $25 million transfer from the Rebuild Illinois Projects Fund.
For public works projects, the goal of the Illinois Works Apprenticeship Initiative is that apprentices will perform either 10% of the total labor hours actually worked in each prevailing wage classification or 10% of the estimated labor hours in each prevailing wage classification, whichever is less.
DCEO will create and administer the Illinois Works Bid Credit Program that will provide economic incentives, through bid credits, to encourage contractors and subcontractors to provide contracting and employment opportunities to historically underrepresented populations in the construction industry.
The Illinois Works Review Panel, which shall consist of members appointed by the Governor and General Assembly leaders, shall make recommendations to DCEO regarding its identification and evaluation of community-based organizations and annually report its evaluation of the Illinois Works Preapprenticeship Program and the Illinois Works Apprenticeship initiative.