Developers who may be considering building a casino in downtown Chicago now have two more months to submit their proposals.
Mayor Lori Lightfoot recently extended the application deadline from August 23 to October 29. In a statement, Lightfoot said, “Extending the deadline for interested bidders will allow the city to collect as many robust, impactful and transformative proposals as possible. I look forward to seeing these bids roll in and working very closely with whichever team is ultimately chosen to develop Chicago’s first-ever casino.”
Lightfoot’s office said, “Several potential bidders sought additional time,” even though casino operators have had more than two years to consider bidding on the Chicago casino. It was authorized as part of a massive statewide gambling expansion signed into law in 2019 by Governor J.B. Pritzker, and proposed taxes were later lowered in order to create more interest.
But the real reason for the deadline extension could be lack of interest. MGM Resorts International, Wynn Resorts and Caesars Entertainment already said they won’t submit bids. MGM Chief Executive Officer Bill Hornbuckle said, “Chicago is just complicated. The history there in Chicago, the tax and the notion of integrated resort at scale don’t necessarily marry up.” Caesars Entertainment Chief Executive Officer Tom Reeg said, “I’ve got no interest in Chicago.”
Chicago-based Rush Street Gaming, owner of Rivers Casino in Des Plaines with partner Churchill Downs, has shown interest in a local casino. However, handing the project to Rush Street could raise questions, due to Lightfoot’s long friendship with Rush Street Gaming Chairman Neil Bluhm’s daughter, Leslie; she and her sister, Meredith Bluhm-Wolf, have given more than $200,000 to Lightfoot’s campaign fund.
A study of a Chicago casino, conducted in summer 2019, noted the benefits of a downtown location close to hotels and other attractions. But Lightfoot mayoral campaign focused on a promise to help struggling Chicagoans in outlying areas where tourists seldom go. The study also noted a downtown location may not attract developers because the original 72 percent tax rate lawmakers approved was “very onerous” and would have generated very thin profit margins for the potential owner. Lightfoot successfully lobbied lawmakers to lower the tax rate to 40 percent. She issued a formal request for casino proposals in April.
Despite the lower tax rate and significant tourism market, casino operators have been skeptical about locating in Chicago. More than 40,000 video gaming machines operate in the state and sports betting is legal now. More new casinos are planned in Rockford, Williamson County, the south suburbs, Danville and Waukegan, where Rush Street is a candidate for a new casino. Still, Illinois’ 10 existing casinos brought in more than $120 million in total gross receipts in July, surpassing revenue in pre-pandemic July 2019.
Lightfoot has said she’ll leave it up to developers to propose Chicago casino locations. Her office said it will select “one or more qualified applicants” and hold community meetings through the end of the year. At that point, “host community agreements” will be negotiated with those potential developers. Next, Lightfoot’s nominee has to be approved by the city council and the Illinois Gaming Board. Lightfoot said the finished casino-resort could open by 2025, though the operator could open a temporary site following gaming board approval.
Lightfoot’s office said, “The Chicago casino project is currently one of the most attractive casino-resort development opportunities in the country.” Chicago casino revenue is considered essential to the $45 billion capital bill passed by legislators in 2019. City officials also hope to use casino revenue to help fund future budget shortfalls as pension costs increase.
