Professional sports teams historically have taken an arm’s-length approach to gambling, but after a U.S. Supreme Court ruling last year overturned a prohibition on state-sanctioned sports betting, the Cubs, White Sox, Bulls and Blackhawks are ready to embrace it — if their respective leagues get a piece of the action.
Democratic Gov. J.B. Pritzker is counting on $200 million in licensing revenue from sports betting to help fill an estimated $3.2 billion hole for the budget year that begins July 1. With a lengthy agenda awaiting them when they return to Springfield on April 30 from a two-week break, lawmakers are still wrangling over what legal sports betting would look like in Illinois.
All of Chicago’s major franchises — with the exception, so far, of the Bears — are backing a plan pushed by Major League Baseball, the National Basketball Association and the PGA that would give professional leagues 25 cents of every $100 bet on their sports in the state. Among other arguments, the leagues say the fee would be fair compensation for the millions of dollars generated by wagering on their games.
But opponents, including the casinos and horse tracks that in early legislative proposals would be shelling out upward of $10 million for each sportsbook license, say the leagues should be left to negotiate with sportsbook operators if they want a cut.
Which side prevails could come down to who has more sway in Springfield: the leagues and team owners or the gambling interests. Both sides have written plenty of campaign checks, but the casinos and horse tracks are a more consistent presence at the Capitol, as their fortunes rise and fall based on the actions of lawmakers.
If Illinois cuts the leagues in, it would be the first state to do so — none of the six states that have recently legalized gambling provide a dime to sports leagues, nor does longtime gambling haven Nevada.
“That remains a really big issue of contention among all of us who are working on this,” said state Rep. Mike Zalewski, a Riverside Democrat who’s leading the negotiations in the House. “It’s quite frankly an audacious ask.”
Zalewski acknowledged, however, that the teams and leagues are “intrinsically involved in what’s going to be a brand-new industry.”
In addition to the fee on every wager placed, the leagues want to have a say in what types of bets are allowed. They’re asking that sportsbooks be required to use official league data, particularly to settle in-play bets — those placed during a contest on things like whether Cubs infielder Anthony Rizzo will strike out in his next at bat. The leagues also want access to betting data from gambling operators to help spot suspicious patterns across state lines.
These measures and others would help protect the sports and the consumers who bet on them, the leagues and teams say.
“Sports betting has been occurring on a massive scale for decades in an illegal market. None of this money benefits the state and there are zero protections for consumers,” the Blackhawks, Bulls, Cubs and White Sox wrote last month in a joint letter to Zalewski.
To maximize revenue and protect consumers, the teams said, Illinois needs “a sports betting framework that includes a partnership between the state and its professional sports teams and their leagues.”
The NFL and the Bears, meanwhile, have been relatively silent on the issue in Illinois. The NFL is officially neutral on the proposal from the other pro leagues, and representatives did not respond to requests for comment. In response to a question about the team’s position, Bears spokesman Brandon Faber said only: “The league and the Bears are monitoring the discussion in Springfield.”
Professional leagues and franchises have been making the argument for a share of the sports betting cash in statehouses across the country — so far, unsuccessfully — as legislatures look to cash in on a new revenue stream for their states.
“It’s a bit challenging to legislatively mandate a fee that goes to a third-party commercial interest,” said Jennifer Roberts, associate director of the International Center for Gaming Regulation at the University of Nevada at Las Vegas. “Nevada has had a long history of legal, regulated sports betting without that fee.”
It’s especially difficult to make the case given the volatility of sports betting revenue, Roberts said. “It’s a tough pill to swallow for a lot of states,” she said.
So far, legal sports betting is proving to be less lucrative than many states anticipated. The Associated Press reported earlier this month that tax revenues have not lived up to projections in four of the six states that recently legalized sports betting. Rhode Island, for example, expected to bring in $1 million per month from a 51 percent tax on sports betting proceeds, but brought in only about $50,000 monthly from late November through February, according to an AP analysis.
Generally, states make their money by taxing the sportsbooks’ post-payout revenue. Depending on the final language of the legislation, giving the leagues a cut off the top could affect the amount of revenue generated for the state.
The leagues argue that giving them an off-the-top percentage creates an incentive for them to promote legal sports betting, increasing interest and generating more money for everyone involved.
“That means that our only incentive is to grow the business,” Dan Spillane, a senior vice president with the NBA, said during a meeting with the Tribune last week. “The more bets there are, then the more money we make, but we’re completely agnostic as to outcome of any particular bet. And that’s because we didn’t want to be in the position where we would make more money if our fans lose bets.”
Casinos and other gambling operators believe the leagues stand to benefit financially from legalized sports betting through increased fan interest and viewership, regardless of whether lawmakers give them a direct cut.
“No other state has mandated a fee and we believe Illinois should not be the first state to do so,” Corey Wise, general manager of Rivers Casino in Des Plaines, said in a statement.
Lawmakers are being lobbied heavily by groups on both sides of the issue that have a history of flexing their political muscle.
The four families that own Chicago’s five major sports teams have “invested a ton of both financial and political capital in this state and in the city of Chicago specifically,” Zalewski said. “And if you just tell them simply, ‘We’re not going to engage, we’re not going to negotiate,’ they’re likely to oppose the bill, and that would be problematic, I think, to passage.
“You don’t get to be a sports owner without some political moxie. So we’re trying to avoid opposition here.”
The most prolific political donors among teams backing sports gambling in Illinois are the Ricketts family that owns the Cubs. Since 2005, family members have spent at least $1 million on candidates and political committees in Illinois.
More than $607,000 — including $25,000 to Pritzker — came from Laura Ricketts, a Cubs co-owner and board member, who is the lone Democrat among the heavily conservative family. Another $238,000 in contributions came from Todd Ricketts, also a co-owner and board member, who recently was named finance chairman of President Donald Trump’s re-election bid. Finance chairman of the Republican National Committee, his donations included $50,000 to unsuccessful GOP attorney general candidate Erika Harold.
Tom Ricketts, who chairs the Cubs board of directors, has made at least $102,401 in contributions, $50,000 of which went to the unsuccessful 2014 effort to put on the ballot a proposed state constitutional amendment to take much of the politics out of the redrawing of legislative districts.
Cubs executives who are not members of the family also have made $26,000 in candidate and political committee donations, state records show.
The Ricketts’ political involvement represents the new era of big-money donations. But it is a practice that has not been applied by other sports owners in Chicago who have myriad business interests and whose clout is measured by their celebrity and ability to provide tickets and give access to politicians.
Bulls and White Sox owner Jerry Reinsdorf and businesses in which he serves as a partner have given at least $300,000 to candidates and causes since 1995, state records show. Reinsdorf’s personal giving included $58,000 to former Republican Gov. Bruce Rauner’s initial 2014 campaign and, four years later, $5,000 to Pritzker, who unseated Rauner in November. Reinsdorf’s son, Michael, who heads up basketball operations of the Bulls, has given $28,500.
Rocky Wirtz, the owner of the Blackhawks, and members of the Wirtz family and its liquor distributorship and realty business have combined to give at least $376,390 in the past two decades, records show.
Illinois’ gambling interests are no strangers to the political process either.
Following a 17-year ban on racetrack donations that ended in 1989, the result of a stock-trading scandal that led to the conviction of former Gov. Otto Kerner, horse tracks — led by Arlington Race Course impresario Richard Duchossois — have had a close relationship with legislators.
Duchossois, his family and its related businesses have contributed at least $3 million to lawmakers and political committees since 1994, state records show. On top of that, the track operations have given at least $146,000, while Churchill Downs, which acquired Arlington in a merger, has given another $122,750.
Other tracks have given much smaller amounts.
But the rise of casinos as a political donor has given the industry sizable influence.
Amid consolidations and ownership changes, Penn National Gaming, which runs Hollywood Casinos in Joliet and Aurora, has given at least $1.8 million in donations since 2004, while the Casino Queen in East St. Louis passed out at least $936,000 since 1994. Rivers Casino, the last casino to open,, in 2011, has made at least $154,000 in donations, records show.
If Pritzker gets his way, winners and losers in the state’s sports betting industry will be known by the end of May.
“I’m still cautious to rule anything in or out,” Zalewski said, adding that none of the five competing proposals being consider in the House has the votes needed to pass.
“I’m for whatever gets 60 votes on a sports betting bill,” he said. “It is very much incumbent upon me to craft a bill that can get passage in the House.”
An earlier version said giving the leagues a cut of the money wagered on sporting events would reduce state tax revenue. That is not the case in current proposed legislation, but could happen depending on the final language of the bill.
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