Democratic lawmakers want more than $20 million in new taxes for Chicago and Cook County before they will support horse-racing legislation considered critical to the rebuilding of Arlington Park Racetrack in Lake County.
Legislative sources say the revenue would be raised by slapping a $4 admission tax on 14 ”teletrack” betting parlors envisioned in the legislation, and by giving cities and counties 2.5 percent of all winnings at the parlors.
The taxes would raise about $42 million statewide for local governments, sources said, with the Democrat-controlled Chicago and Cook County governments capturing more than half.
For their part, Republicans vowed to fight what they see as a last-minute revenue grab by House Speaker Michael Madigan (D., Chicago), whose allies are expected to call for the taxes this week.
The two sides are to square off Tuesday in Springfield, when the Illinois General Assembly begins the final three-day leg of its fall veto session.
Horse-racing legislation became the only sports-related topic on the legislative agenda after key Du Page County legislators declared last week that they will not push for state aid to help the White Sox move to suburban Addison.
The Sox are expected to make an announcement about their plans later this week.
Republicans are still pushing for a package of horse-racing bills that includes tax cuts, beefed-up security at the tracks and a system of remote off-track betting parlors, or teletracks.
If the Republican version of the bill passes, millionaire horseman Richard Duchossois has vowed to replace his fire-gutted Arlington Park track with a new facility at Old Mill Creek in Lake County.
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He further promises to redevelop the Arlington track site into a mixed-use commercial complex.
The total cost of the two-phase undertaking would be $1.3 billion, making it the largest private development ever undertaken in Illinois.
But Democrats control both houses of the legislature, and they apparently see little advantage for Chicago in helping Duchossois move his track from one suburb to another–unless, of course, the city were to gain some tax benefits from the 14 new teletracks, 5 of which probably would be built in the city.
”What I`m trying to do is get money for local governments,” said Rep. John Cullerton (D., Chicago), a Madigan lieutenant and chairman of a special House committee on racing reform.
Without the new teletrack taxes, Cullerton said, ”there`s nothing for Chicago in this package. It benefits primarily suburban and rural communities . . . where the tracks are located, where the horses are bred.”
Cullerton predicted that Illinois tracks and their owners will reap $77 million from the undisputed core provisions of the bill. Those provisions would cut the state`s tax on parimutuel betting to 3 percent from the current sliding scale that peaks at 7.5 percent, and they would allow each track to set up two teletracks within 90 miles of the parent.
Duchossois alone stands to benefit by $10 million, said Cullerton, adding, ”Maybe he figures $10 million isn`t enough (to proceed with Old Mill Creek), but I think it`s plenty.”
Republican leaders, meanwhile, contend that Cullerton and Madigan are trying to milk the racetrack plan for Chicago`s benefit.
State Sen. Aldo D`Angelis (R., Chicago Heights), a member of the conference committee drafting the bill, said Madigan`s proposed taxes are
”too high” and would ”defeat the purpose” of the remote parlors by scaring away small-time bettors.
”What about the guy who wants to run out on his lunch hour and put down a $5 bet?” asked D`Angelis. ”Does he want to pay a $4 admission to get to the window?”
Another Republican on the committee, Rep. Tom Ryder (R., Jerseyville), said Madigan`s proposed admission fee ”is too steep for my district.”
”Madigan wants to be able to say he got that money for the city,” Ryder said. ”I don`t blame him for trying, but I also think he wants too much.”
Under the Duchossois-Republican proposal, there would be no admission tax at the teletrack parlors.
The GOP version, like Cullerton`s, would also hand local governments a 2.5 percent surcharge on teletrack winnings. But unlike the Democratic proposal, the GOP give track owners another 2.5 percent of winnings. Cullerton contends that Duchossois would reap another $3 million from this provision alone.
The revenue potential of teletracks is huge. Legislative researchers predict tht 7 million people will visit the parlors each year and wager an average of $100 apiece, or $700 million total. The $4 admission fee alone would raise a quick $28 million. And the 2.5 percent surcharge on winnings
–the same as 2 percent on gross bets–would produce another $14 million a year.
Those monies would be split 50-50 under the Cullerton plan between the municipality and county in which a teletrack is located. But state tax revenues from racing would go down, by $6 million, because of the rollback in the parimutuel tax.
A bill similar to the Republican version failed to pass the legislature last July, a victim of Madigan`s skepticism, and of in-fighting among Chicago- area track owners.
This time the track owners are more unified and more convinced than ever that tax cuts and teletrack betting are needed for Illinois to revive its lagging thoroughbred industry.
The rebirth of Arlington Park near the Wisconisn state line is viewed as particularly crucial. Wisconsin officials have threatened to legalize parimutuel betting in that state to better compete with Illinois in horse racing–and revenue chasing.