Chicago extends deadline for casino proposals
Mayor touts $1B resort-style project but developers are leery
Chicago Mayor Lori Lightfoot has extended the deadline for casino developers to submit requests for proposals, betting an extra two months will yield more options. The new date is Oct. 29.
The city envisions a $1 billion resort-style complex that would include a five-star, up to 500-room hotel, a number of fast-casual restaurants and other dining options as well as entertainment space, all of which would feed the tax coffers.
The RFPs ask developers to identify sites, including one downtown that Lightfoot finally agreed to in 2019.
The mayor called the project “one of the most attractive casino-resort development opportunities in the country.” She said it would “expand the economic vibrancy and strength of our city by bringing sustainable, good-paying jobs to residents from under-represented backgrounds and creating a world-class casino-resort that attracts visitors from all over.”
Casino developers, however, aren’t as optimistic. Some big casino operations such as MGM and Wynn have already given it a pass. So far, only Chicago’s Rush Street Gaming, which owns four land-based casinos under the Rivers brand, has expressed interest.
At issue is the high price of developing in Chicago that goes beyond construction and startup costs to taxes at 40 percent, not to mention the risk involved. The state initially had proposed a 72 percent tax rate that Lightfoot was able to get knocked down.
“Chicago is just complicated,” Jonathan Halkyard, MGM’s chief financial officer, said on a first quarter conference call in April. “The history there in Chicago, the tax and the notion of integrated resort at scale don’t necessarily marry up.” He added, “while I think they’ve had some improvement, we’re not overly keen or focused at this point in time there.”
Meanwhile, the Illinois Gaming Board also opened the door for sportsbooks looking for a mobile-only license in the state, creating yet more gaming competition. Already, the owners of the Chicago Cubs are looking to add a two-story, 22,350-square-foot addition to Wrigley Field for a DraftKings Sportsbook.
“The casinos in the state have been in nothing but a downward spiral for a decade, except for Rivers,” Alan Woinski, president of Gaming USA, a consulting firm and newsletter, told the Chicago Sun-Times last month. “There’s no reason to believe that if you add a casino downtown that you’ll do anything but cannibalize the others, including Rivers. It’s kind of a zero-sum game and everybody loses.”