The Illinois State Police has yet to certify any of the state’s gun dealers as required under a law Gov. J.B. Pritzker signed days after taking office in January.
The agency was supposed to begin issuing certifications to federally licensed gun dealers July 17, but the rules required to implement the law still haven’t been established. In the meantime, gun dealers that have applied under the Firearm Dealer License Certification Act are allowed to continue operating as if they’ve been certified. […]
Critics of the measure — including Rauner, who vetoed an earlier version — said the law was unnecessary because gun sellers already are licensed by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives. The Illinois State Rifle Association has sued the state to block the law. […]
Under the law, gun dealers also are required to install surveillance cameras, maintain an electronic inventory, establish anti-theft measures and make sure employees go through annual training. But specific rules for those requirements also still must be established.
Authorities arrested a man on Monday who allegedly opened fired inside a Chicago VA hospital.
The unidentified man allegedly entered the Jesse Brown VA Medical Center in Chicago with an assault rifle at around 2 p.m on Monday and began firing shots, according to the FBI. The agency said shots were fired both inside and outside the hospital.
* From the US Attorney’s office…
A convicted felon has been charged with a federal firearm violation for allegedly illegally possessing a semi-automatic rifle at the Jesse Brown VA Medical Center in Chicago.
BERNARD HARVEY, JR., 40, of Indianapolis, Ind., is charged with one count of illegal possession of a firearm by a convicted felon. Harvey illegally possessed the rifle on Aug. 12, 2019, at the medical center, 820 S. Damen Ave. in Chicago, according to a criminal complaint and affidavit filed today in U.S. District Court in Chicago. Harvey is scheduled to make an initial court appearance today at 2:00 p.m. before U.S. Magistrate Judge Susan E. Cox.
Scroll down…
The rifle in Harvey’s possession at the VA medical center had been reported stolen last month from a federal firearms licensee in Indiana, the complaint states.
An FBI intelligence bulletin specifically cited the pro-Trump QAnon and Pizzagate conspiracy theory groups in a memo warning such groups pose a domestic terrorist threat.
The document, issued by the FBI’s Phoenix field office on May 30 and published by Yahoo News on Thursday, warns that “conspiracy theory-driven domestic extremists” pose a growing threat. […]
The FBI also cited an unnamed California man arrested with bomb-making materials in his vehicle in 2018. The man planned to “blow up a satanic temple monument” in the state capitol rotunda in Springfield, Illinois, in order to “make Americans aware of Pizzagate and the New World Order, who were dismantling society.”
Click here to read that FBI report. The endnotes explain that the unidentified man was arrested by the Seaside, California police department. Click here for background on that Satanic Temple-Chicago monument in the Rotunda last December. The “New World Order” is, among other things, part of that bizarre QAnon conspiracy.
Illinois officials said Tuesday they were aware of a 2018 threat to set off a bomb in the state Capitol rotunda directed at a satanic display there last Christmas season.
Dave Druker, spokesman for Secretary of State Jesse White, whose office provides security at the Capitol, said federal authorities notified the office of the threat.
“We tightened up security around the building,” Druker said.
Nothing happened in Springfield as a result of the threat. However, a man in California was arrested in connection with the incident.
Today, State Treasurer Michael Frerichs endorsed Elizabeth Warren for President. Frerichs was elected Treasurer in 2014 and previously served in the Illinois Senate. Frerichs has spent his career as a leading downstate voice for Illinois consumers, against climate change, and making it easier for students to go to college.
“Senator Elizabeth Warren has dedicated her life to protecting everyday Americans from the powerful entities that have controlled Washington for too long,” said Treasurer Frerichs.
“While others paid lip service to reform while cashing lobbyist checks, Elizabeth challenged the status quo and refused to be bought. She is focused, tireless, and the right person to lead us in our fight against corruption.”
“I am grateful to have Treasurer Frerichs in this fight with me. Mike is a stalwart guardian for investments in Illinois and a fierce advocate for consumers,” Warren said. “Whether he’s taking on giant corporations on behalf of workers or fighting the Trump Administration to protect our environment, Michael has repeatedly demonstrated his commitment to what our movement for big, structural change is all about.”
I’d heard yesterday that Frerichs was about to make this announcement and it got me to thinking about his future. I suppose the second-term treasurer could run for US Senate if Dick Durbin ever retires. But that could be a long way off and white Downstate males ain’t exactly the party’s base or its future. So, a White House job could be a good gig. But that would depend on Warren winning the primary and the general and I do not want to get into that discussion here.
* The Question: What are your thoughts about Treasurer Frerichs’ political future? Make sure to fully explain your musings, please. And stay on-topic. Thanks.
[Anthony Sarros, executive director of the ILGOP] said that a banner, a flag and signs promoting President Donald Trump were stolen overnight from the Republican Party of Illinois’ tent at the Illinois State Fair. […]
Gone, he said, was an eight-by-four foot banner with Trump’s name and the words “Make Illinois Great Again.” A three-by-five foot flag with wording “Keep America Great” and “2020” was also taken, as were about 20 yard signs.
“Weirdly enough, we have a life-size cutout of the president, and that was still there,” Sarros said. “That was zip-tied around the center pole,” he added, so it’s possible it couldn’t easily be taken. The entry flap to the tent is also zip-tied each night.
Sarros said the party was filing a police report.
* Maxwell…
"This is indicative of political discourse at the moment. It's unfortunate and it shouldn't happen. We urge the person who stole the items to return them and engage in more productive political activities." - Joe Hackler, @ILGOP spokesman.
A dispute arose last week over website URL’s in the 6th CD GOP primary, and Monday the plot thickened. First, Republican candidate Jeanne Ives posted accusations on her Facebook page that her primary opponent Evelyn Sanguinetti’s campaign had pulled a URL switch.
Evelyn Sanguinetti told Illinois Review her campaign wasn’t guilty of Ives’ accusation:
“I checked with all my staff, vendors, and anyone associated with my campaign and confirmed we do not own any websites with Jeanne Ives’ name. I do not know who owns that URL. Honestly, Jeanne really should have just called me to ask if I did this before spreading a lie about me. We are both Republicans and we are better than this pettiness,” Sanguinetti said.
Ives’ described the maneuver as “petty, immature and dishonest”
Wirepoints’ analysis uses national state-by-state migration data compiled by the Internal Revenue Service. The IRS reviews tax returns annually to track when and where people move. It also aggregates the ages, income brackets and adjusted gross incomes of filers.
In this first piece, we’ll cover Illinois’ net loss of tax filers and their incomes since 2000.
Losing people and their incomes
Illinois is a national outlier when it comes to losing residents and their taxable income to other states.
In 2016, IRS data shows Illinois gained nearly 165,000 people from other states and they brought with them a combined Adjusted Gross Income (AGI) of about $6.3 billion. Meanwhile, more than 250,000 Illinoisans left the state and they took more than $11 billion with them.
That means Illinois suffered a net loss of about 86,000 residents and a loss of $4.8 billion in taxable income – the equivalent of more than $100 million in state income tax revenues. […]
Illinois has lost tax filers and taxable income, on net, every year since 2000. Between 2000 and 2010, the state averaged net losses of about $1.8 billion in taxable income each year. Since then, the state’s losses have accelerated by about $500 million a year, growing to $4.8 billion by 2016.
* I asked Frank Manzo at the Illinois Economic Policy Institute to take a look. All emphasis is in the original…
Overall, the analysis of IRS numbers is correct. I arrive at the same numbers. However, there are a few problems with the analysis.
First, it’s based on “adjusted gross income (AGI)” but Illinois taxes individuals based on “net income.” Net income is AGI minus Social Security benefits, retirement income, military pay, certain business subtractions, etc. For example, if a retiree with a $100,000 pension moved to Florida, we lost their AGI but we didn’t lose income tax revenue, since retirement income is not taxed in Illinois. But we did lose things like sales tax revenue from their local spending.
Second, the data should be put in context. Clearly, the loss of population is a problem. A growing population from new births, net domestic migration, and net foreign immigration boosts economic activity. However, as the authors point out, Illinois lost about 86,000 residents and $4.8 billion in AGI in 2016. Illinois’ population is estimated at 12.7 million people and we had a total AGI of $664.7 billion in 2016. Net out-migration therefore represented about 0.7% of the population and 0.7% of AGI in Illinois. And 2016 was the worst year in terms of the data, when the state was in the middle of the two-year budget impasse which reduced business confidence, reduced funding for public and nonprofit services, and reduced state investment in higher education (note that the state also had a 3.75% individual income tax rate at this time).
Third, the authors make it seem as though the overall tax base has shrunk over time – but it hasn’t. While we have lost people who would have paid taxes, it is worth noting that both the number of tax filers and total AGI have still increased in Illinois over recent years. Look, for instance, at Illinois Department of Revenue data for 2016 compared to 2010. I’ll stick with AGI since that is what the authors used. Here’s the change over that time:
The number of tax returns filed with the Illinois Department of Revenue (i.e., the tax base) increased by 4.5%. Filers reporting $25,000 or less in AGI did decrease by 7.9%, but that was mainly due to a strengthening economy (other factors like student out-migration and Chicago’s minimum wage hikes, which raised incomes, may also have played roles). Upper middle-class filers reporting $100,001-$500,000 and affluent filers reporting $500,001+ both increased significantly, 32.6% and 44.4%, respectively. The “non-Illinois total” also rose for unknown reasons, probably due to income generated by out-of-state and foreign businesses within Illinois’ borders as the national and global economy expanded. Overall, the point is that the tax base is still increasing, but would have been larger with net in-migration.
All of that said, I’m not dismissing population loss as a non-issue. It is a problem. Illinois needs to boost economic growth, generate more good jobs with family-supporting wages, and improve its financial outlook by paying down debts in order for the tax base to grow substantially.
The potential commutation of former Illinois Gov. Rod Blagojevich’s federal prison sentence has been put on hold amid White House officials’ fears of public pushback, sources say.
Two sources told Fox News that on Thursday, Blagojevich, 62, made it to processing for his discharge from a federal prison in Littleton, Colo. However, a commutation was put on hold after a Trump administration official became concerned about opposition to the idea, which the president said he was “seriously” considering.
In a tweet, Trump said the issue was under review.
“Rod Blagojevich, the former Governor of Illinois, was sentenced to 14 years in prison. He has served 7 years. Many people have asked that I study the possibility of commuting his sentence in that it was a very severe one. White House staff is continuing the review of this matter,” he posted.
* I’m told that this statement from the state’s GOP congressional delegation last Thursday had a lot to do with the flip-flop…
Congressmen Darin LaHood (IL-18), John Shimkus (IL-15), Adam Kinzinger (IL-16), Rodney Davis (IL-13), and Mike Bost (IL-12) released the following statement regarding former Illinois Governor Rod Blagojevich.
“It’s important that we take a strong stand against pay-to-play politics, especially in Illinois where four of our last eight Governors have gone to federal prison for public corruption. Commuting the sentence of Rod Blagojevich, who has a clear and documented record of egregious corruption, sets a dangerous precedent and goes against the trust voters place in elected officials. We stand by our letter and urge the President to not commute Rod Blagojevich’s sentence.”
In June of 2018, the entire Illinois Republican U.S. House delegation sent a letter to President Trump opposing the commutation of Rod Blagojevich’s sentence. You can read that letter here.
* I am in the “keep him locked up” camp when it comes to Rod. But the president has teased Blagojevich’s release so many times that I actually started to feel sorry for the man yesterday (and I never thought I’d say that). And I really did feel sorry for his kids. Their hopes have been raised so many times only to be repeatedly dashed on the rocks of presidential indecision.
Amid continuing uncertainty over whether President Donald Trump will commute Rod Blagojevich’s prison sentence, the disgraced former Illinois governor’s family released a statement Monday night reiterating its gratitude toward the president.
“The family is grateful to President Trump, and they are hopeful that their 11-year nightmare might soon be over,” family spokesman Mark Vargas said in a text message that he subsequently released on Twitter.
I suppose they have to cling to their public gratefulness, but I wish the president would make a decision one way or another and finally stick with it and move on.
John Tillman, the CEO of conservative think tank Illinois Policy Institute, and Warlander Asset Management’s Eric Cole, a protege of Appaloosa Management’s David Tepper, are teaming up in an effort to invalidate a whopping $14.3 billion of Illinois debt on the grounds that the state’s pension bond sale in 2003 and securities issued in 2017 to pay a backlog of unpaid bills were in fact deficit-financing transactions prohibited by the constitution.
Warlander owns $25 million Illinois general-obligation bonds issued in 2001, 2014, 2017 and 2018. Those bonds would be more secure if the firm succeeded in having the other securities invalidated, since there would be more money available to service the debt.
But is that all this is about for Warlander?
* AllianceBernstein and Nuveen have filed an Amicus Brief in the debt service case. In that brief is this allegation…
Warlander is not an Illinois taxpayer – its Complaint asserts a disclosed interest in the litigation that has no economic basis and admits a “separate financial interest in the litigation” that is not disclosed at all. On information and belief, that “separate financial interest” is credit default swaps Warlander purchased that will pay off if this action causes Illinois to default on any of its G.O. Bonds.
A simple question from the bench will resolve the question raised by Warlander’s own Complaint. In any event, the Petition should not be granted until the answer is provided so that the Court can determine whether the Petition is filed not to vindicate the interests of Illinois taxpayers but to allow an out-of-state hedge fund to create a default and profit from its swaps. […]
A credit default swap is a contract similar to an insurance policy on a bond. If the bond defaults, the buyer can collect from the institution that sold the swap. The swap-buyer does not have to own any bonds when it buys its swaps; it can buy the bonds later – even after a default craters the price of the bonds – and tender the bonds to the swap-seller for 100% payment on its swap contract.
Permitting activist investors to litigate against the validity of widely held municipal bonds based on their credit default swap bets could introduce a significant destabilizing force into the municipal markets and harm investors and government entities alike. […]
If public officers “for their own protection” refuse to pay principal and interest on
the challenged bonds until Petitioners’ lawsuit is finally adjudicated, the result will be catastrophic – the bonds will default, Illinois will immediately lose its credit rating and the trading price of the challenged bonds will drop sharply. If Warlander holds swaps, it can then buy G.O. Bonds at bargain basement prices and tender them to the swap-seller at 100 cents – realizing an enormous profit from the catastrophic default it has manufactured. […]
As of the date of that report, credit default swaps on Illinois G.O. Bonds exceeded $300 million. […]
On information and belief, Warlander has bought credit default swaps well in excess of its nominal $25 million in G.O. Bonds. If swaps are Warlander’s undisclosed “separate financial interest in the litigation,” then Warlander stands to reap an extraordinary profit from the mere pendency of this litigation. [Emphasis added.]
* I asked Warlander and the Illinois Policy Institute for a response. A spokesperson said he would not be providing comment beyond a new motion to block the Amicus Brief…
The proposed brief speculates at length about the nature of Warlander’s “financial interest.” There is nothing improper about an investment firm having a financial interest in litigation—this is simply what investors do. Importantly, the existence of Warlander’s financial interest has been disclosed from the outset. Further inquiry into that interest is not relevant, has no bearing on any issues relevant to Mr. Tillman’s Petition, and stands entirely separate from the constitutional violations alleged.
An Illinois Supreme Court Justice has received a homeowners exemption on a home where he doesn’t live, NBC 5 Investigates found.
The property lists his mother as the owner, but she died 28 years ago. Judge Scott Neville will soon be asking party bosses to slate him as “the” endorsed candidate.
Judge Neville has been receiving a homeowners exemption for more than 15 years, and the rules state you must live in the home to get that tax break. Judge Neville was sworn in as an Illinois Supreme Court Justice last summer. […]
Records showed the tax break has been requested since 2000. In fact, in 2009, the home’s assessed valuation was requested again with Alice Neville as the applicant. By then she had been dead for 18 years. […]
[A campaign spokeswoman for Judge Neville] added “the Justice is unaware of this issue and does not recall applying for an exemption on any property. This is an error and since being notified of this error we are looking into this matter.”
* In July, Congressman Davis held a public forum with Rep. Dan Caulkins (R-Decatur), a member of the Eastern Bloc. As you may recall, Caulkins generally played “bad cop” to Davis’ “good cop.”
Well, Davis is holding a second forum and is partnering this time with Rep. Brad Halbrook, the sponsor of the proposal to kick Chicago out of Illinois. Press release…
U.S. Rep. Rodney Davis (R-Ill.) [yesterday] announced he will be hosting his second Open Government Night following the first event held in Decatur recently where more than 250 constituents attended. The series is in conjunction with state lawmakers to allow constituents an opportunity to hear directly from their elected officials at the state and federal level on important issues. The second event will be held in Champaign with State Representative Brad Halbrook (R-Shelbyville).
“Ensuring constituents have an opportunity to hear directly from their elected officials continues to be my priority,” said Davis. “Open Office Hours allow me to have personal, one-on-one conversations with people about the issues they care about. Open Government Nights allow people to discuss issues facing our government at the state and federal levels. I’m looking forward to discussing these issues next Monday night.”
“Events like this are a great way for area residents to hear directly from their State Representative and Congressman about the issues important to them. We need to hear from our constituents, and so I would encourage everyone to try to make it out and let their voice be heard.” said Halbrook.
The format will mirror that of Davis’ first audience Q&A event, held July 29 at Decatur’s Richland Community College. Over that 90-minute program, Davis and state Rep. Dan Caulkins took turns answering 22 questions submitted in writing by those in a crowd of around 250. Topics ranged from the tone of President Donald Trump’s tweets to gun control and soybean tariffs.
Under this format, the moderator chooses the questions. Neither Davis nor his representatives will see them or have a hand in selecting them before they’re asked, officials said.
Some tough rhetoric pushing the re-election of U.S. Rep. RODNEY DAVIS, R-Taylorville, has been in his fundraising emails that have attacked the Springfield-born Democrat running against him as representing Chicago and made apparently false claims about where her campaign money comes from.
“I don’t think they go out under my name,” Davis told me, and he said he does not approve those messages.
Well, one that did go out and said it was from Davis stated that Democrat BETSY DIRKSEN LONDRIGAN was “Chicago’s handpicked candidate,” and added, “She’s got millions of dollars pouring in from out of state billionaires. … I want to reach my fundraising goal this month and show Chicago that downstate wants a representative to speak for them.” The Davis campaign has provided no evidence to back up the millions-from-billionaires claim, which is clearly out of whack with actual fundraising.
After he toured the Ash Street underpass construction site in Springfield last week, I showed Davis that email — including his name as the messenger. He said he hadn’t seen or approved it.
I asked if it was a problem. Davis responded with a laugh, but gave no direct answer.
Dr. Tom Tarter, a cancer surgeon from Springfield, made it official Monday: He’s running for the Republican nomination for U.S. Senate from Illinois.
Tarter hopes to take on a fellow Springfieldian, U.S. Sen. Dick Durbin, D-Illinois, in November 2020, but the first step is the March primary, where another Republican, former Lake County Sheriff Mark Curran, has also said he is running.
In an announcement statement, Tarter said of Durbin: “I am running to replace an out-of-touch career politician who no longer represents Illinois values, and who obstructs progress.” […]
Tarter, a native of Portland, Oregon, is a graduate of Linfield College, McMinnville, Oregon; got a doctorate from Oregon Health Sciences University, based in Portland; and his medical degree is from Albany Medical College, Albany, N.Y. He has lived in Springfield for more than 17 years.
I saw a couple of his yard signs when I was at the State Fair on Saturday.
I am proud to announce my campaign for U.S. Senator from Illinois in 2020. Voters are going to have clear choices in November 2020. Dick Durbin stands for a single-payor health care system, and I stand for improving our health care system that the majority of Americans find excellent or good. We can reduce the cost of health care in the United States without forcing every American into an inferior single-payor plan, especially those who have paid into Medicare all of their working lives. Dick Durbin is the second ranking Democrat in the U.S. Senate, and his party stands for an open border policy. I stand for a sovereign nation with secure borders. I stand for immigration reform. American citizens need to decide who gets invited into the American family. With your support, I can replace Dick Durbin and make progress in health care and immigration for our state and our country. I hope you will continue to follow my journey to the United States Senate.
The Illinois Department of Transportation is expanding its Life or Death Illinois campaign to include Scott’s Law, calling attention to the need to protect first responders, emergency personnel and frontline highway workers. A new video that will air statewide comes after Gov. JB Pritzker recently signed legislation strengthening the law while bringing together stakeholders to find solutions to prevent future tragedies on Illinois roads.
The video features footage of Kyle Deatherage, an Illinois State Police trooper struck and killed while making a traffic stop near Litchfield in 2012. Deatherage was survived by his wife and two young children. The video will air on TV, various online platforms and social media.
“We are humbled to be able to put a real name and face to Scott’s Law and the human toll that comes with all fatalities on our roads,” said Acting Illinois Transportation Secretary Omer Osman. “Sadly, these deaths are almost always preventable. Trooper Deatherage’s family has shown bravery and courage by helping IDOT raise awareness of these life-and-death issues.”
Scott’s Law requires drivers to slow down and move over, if possible, when approaching any vehicle with flashing lights. It was named after Chicago firefighter Scott Gillen, who was struck and killed while assisting at a crash scene. In the past year, three state troopers have been killed while performing traffic stops.
“The Illinois State Police is grateful to IDOT for including Scott’s Law in the Life or Death Illinois campaign,” stated Acting ISP Director Brendan Kelly. “This campaign will honor the life of Trooper Deatherage and his family as well as the lives of countless other troopers, first responders and frontline highway workers by bringing a greater awareness to the sad consequences of violating Scott’s Law.”
Life or Death Illinois is the first comprehensive approach by IDOT to reduce injuries and fatalities associated with motorcycles, bicycles, pedestrians, seatbelt use, work zones, and impaired and distracted driving. The campaign, which this year features stories of Illinois residents who died in traffic crashes, is made possible through federal funds administered by IDOT.
Chicago casino feasibility study concludes that the tax structure set up by the Illinois General Assembly (where the operator only keeps 33% of the revenues) would be too onerous and make it virtually unprofitable. That said, Michael Reese site would make most $$$
Not feasible due to the onerous tax and fee structure
The gaming expansion legislation that allows for a casino in the City of Chicago is very onerous from a tax and fee perspective. Our understanding is that on top of the existing tax structure on Adjusted Gross Receipts (“AGR”) paid by all Illinois casinos, the City of Chicago casino would also pay an additional 33 1/3% privilege tax on AGR. The developmental impact of high taxes and fees notwithstanding, we forecast that a casino in the City of Chicago has the potential to become the highest grossing casino in Illinois, significantly higher than the current market leading Rivers Casino in Des Plaines, which generated $441.8 million in AGR in calendar 2018. For example, the highest AGR potential for the five sites selected for the study by the City of Chicago is approximately $806 million (Former Michael Reese Hospital, 31st St. and Cottage Grove Ave.). Based on the prevailing AGR and admissions taxes alone (set aside for the moment other operational-phase taxes and fees), a casino in the City of Chicago would pay approximately $311 million in AGR and admissions taxes, or an effective rate of approximately 39% relative to AGR of $806 million. When combined with the 33 1/3% additional privilege tax on AGR specific for the City of Chicago casino, the effective tax rate is approximately 72%. AGR projections for all of the five sites result in a broadly similar effective tax rate.
It can be further expected that a casino’s operating expenses (e.g. advertising, marketing, payroll, rent, utilities, etc.) can easily approach the equivalent of 30% of AGR, if not higher. Combined with the effective tax rate of 72% yields an expense structure that could exceed casino revenue. Ultimately the additional privilege tax on AGR specific to the City of Chicago results in none of the five sites being financially feasible. The amount of profit generated relative to total development costs, inclusive of licensing and reconciliation fees, represents at best a 1% or 2% return annually, which is not an acceptable rate of return for a casino developer on a greenfield project. But for this incremental tax, any of the sites analyzed herein would likely have a profit margin broadly in line with the Illinois and regional casino peer group average in the low-to-mid 20% range. However, we believe a reasonable casino developer would not move forward with a greenfield casino project that has, at best, a low single digit profit margin.
To the extent a casino operator could pare down expenses and realize modest revenue and profits from non-gaming amenities (as we have projected herein), total enterprise profit margin would, in a best-case scenario, likely equate to a few pennies on the dollar – and that would require the casino to be developed without incurring any debt as we believe no traditional financing would be available for such a development as debt servicing would likely well exceed any modest profits generated. […]
Casino profit margins can’t support the special privilege tax
Noted above, it is not unreasonable to think that the operating expenses of a casino in Illinois could approximate 30% of AGR or higher. By way of example, and while Illinois casinos are not required to report detailed financial information publicly, we were able to calculate various financial margins for the Grand Victoria in Elgin that was recently sold. Based on press releases provided by the acquiring company, 2017 EBITDA was calculated to be approximately $36.4 million. Based on data available from the IGB, the casino generated $168.7 million in AGR in 2017 and paid $55.5 million in gaming and admissions taxes and fees. With these data points available, operating and other expenses can then be estimated at approximately $76.9 million, or 46% of AGR (and well above the 30% estimate above). […]
The absence of the special privilege tax would yield a profitable casino
Our analyses suggest that, at best, the highest earning of the five sites would operate on very thin profit margins of around 3%, which compares very unfavorably to the in-state and regional peers in the low-to-mid 20% range. In the absence of the special privilege tax on AGR specific to Chicago, the profitability of a casino in the City of Chicago would receive a material boost. While not all of the tax “savings” would drop to the bottom line in the event the special privilege tax is rescinded, most of it would. In this scenario, and while the casino would certainly allocate some of the savings to, for example, increased marketing efforts, the lack of the special privilege tax would allow a casino to operate with margins broadly in line with the in-state peers.
* Mayor Lightfoot has been claiming all along that the tax structure wouldn’t work. The latest from the Tribune…
With word on the odds of success for potential Chicago casino sites due this week, Mayor Lori Lightfoot said Monday she isn’t sure whether a gambling operator can make enough money given the upfront costs they must pay under the current state law.
Consultants at Union Gaming Analytics are expected to deliver their view of a city casino’s feasibility by Tuesday — and supercharge speculation about where a massive gambling hall could stand, and if it can make enough money to soften the city’s budget burden. […]
As it stands, state law would send one-third of a Chicago casino’s adjusted gross receipts to the city. Currently, the city casino operator also would have to pay a $250,000 application fee upfront, a $15 million “reconciliation” fee when the license is issued and up to $120 million in gambling position fees — which cost $30,000 each. […]
“We asked for the feasibility study, as you know, because we were very concerned that the tax structure that the legislature put in place was one that wouldn’t lend itself to funding of a casino,” the mayor told reporters Monday at City Hall.
*** UPDATE *** From Emily Bittner at the governor’s office…
This study provides valuable insights that will help make sure a Chicago casino works right for the both the city and state. We look forward to working with stakeholders, including the Mayor and General Assembly, to refine this approach and ensure that we maximize the opportunities for jobs for residents and revenue to address our financial obligations.
In other words, expect a trailer bill in veto session.
