The mayor of Chicago has said that he wants to open a casino in the state of Illinois to tackle a pension crisis, according to a report.
Chicago’s pension problem
Rahm Emanuel, who is due to leave his office in May, is reported to have made this comment, according to a source close to him, reports USA Today.
The outgoing mayor also wants to legalize cannabis to help ease the pension crisis in the state. The legalization of recreational cannabis is already permitted in California, which came into effect at the beginning of the year.
Aside from Chicago, Andrew Cuomo, Governor of New York, is also looking to make it legal in the state.
According to the report, Chicago’s four public worker pension funds have more than $27bn in unfunded liabilities. However, if a casino is opened in the state and cannabis becomes legalized, Emanuel is calling for any tax money the city receives to be placed in the pension funds.
In an excerpt from his speech, he noted: “These contributions must be made. There are no ifs, ands or buts about it. While there is no single solution to this challenge, I believe there are sequential steps we can take to keep moving the ball down the field. And I believe those steps must be based on progressive principles.”
In 2020, the city will require an extra $276m (£220m) for police and fire pension contributions and an additional $310m (£247m) for the municipal and laborers’ pension funds. However, while Emanuel doesn’t believe that the addition of a casino and the legalization of cannabis will provide the “silver bullet,” he does think it will aid the city’s finances from what they currently are.
Before he leaves office in May, the mayor of Chicago will be proposing both measures in a major address today. However, if the casino is given the green light it remains to be seen whether it can live up to expectations.
No guarantee of revenues
Last month, it was reported that casinos in the state of Ohio are not hitting the revenues they were expected to reach when they became legal in 2009. Legalized through a public vote, campaigners for legalization projected that the four casinos in Ohio would bring in $2bn (£1.6bn) in revenue before taxes.
Yet, nearly 10 years later and the figures aren’t matching up, the report notes. It goes on to state that the 2018 revenue to date is below the projected $1.4bn (£1.1bn). Last year, only $818m (£636m) was brought in from the four casinos.
According to Matthew Schuler, executive director of the Ohio Casino Control Commission, he believes that the projections were overestimated and that tax revenues were exaggerated in order to get the public to vote in favour of legalizing them.
This, of course, is only one state. Regarding the state of Illinois and the city of Chicago the projected figures of what a casino could bring in are not noted. Yet, considering the expected extra contributions above for the four pension funds, it seems Chicago may benefit in some way taking into account the numbers from the Ohio casinos, even though the state has four.
In contrast to Ohio, Atlantic City in New Jersey saw a positive October for casino revenue. Figures released by the Division of Gaming Enforcement noted that total revenue for the month brought in by casinos amounted to $234.3m (£186.4m) This number is nearly $30m (£24m) more than figures from October 2017.