Chicago Casino Process Taking RFPs from Possible Developers
Ready to place your bets in the Windy City? It’s a step closer to reality now that Chicago is soliciting proposals from possible developers for a single casino in the nation’s third-largest metropolis.
Chicago is officially seeking “an experienced company or joint venture to develop an integrated casino resort that compliments the city’s thriving entertainment and cultural scene,” the city stated in a request for proposals (RFP) released this week. Developing the first casino within Chicago’s city limits has been an objective for mayor Lori Lightfoot since she took office in 2019. The RFP submission process will close in August.
"We look forward to collaborating with world-class operators to develop a premier entertainment destination that will catalyze growth in our dynamic economy, create sustainable, good-paying jobs for our workforce and bring new financial opportunities to our businesses,” Lightfoot said in a statement.
The city intends to announce its chosen candidate in 2022 and hopes to have the new gaming facility open by 2025. The project could include the development and operation of a temporary casino that provides gambling and other activities while the permanent structure is being constructed, as well as licenses to operate electronic gambling machines at city-run O’Hare and Midway airports.
Tax Rate Cut Clears Path
Gambling has a long history in Illinois – which legalized betting on horse racing in the 1920s, riverboat casinos in the 1990s, and sports betting in 2019 – but there is no casino within the limits of Chicago proper. The eight casinos that dot the Chicagoland area are in outlying municipalities such as Des Plaines, Aurora, Joliet and Gary, Ind.
In addition to Chicago, five other municipalities were granted new casino licenses as part of an expansion of the state gambling industry that Gov. JB Pritzker signed into law. That also gave the green light to sports betting. But squabbles over tax rates has held up the Chicago project, according to the Chicago Sun-Times, leaving Lightfoot “impatient,” as she told the newspaper.
A financial feasibility report prepared for the city in 2019 by the advisory firm Union Gaming determined that the original tax rate of 72% for the Chicago casino – imposed by Pritzker – would have been “far too onerous for the casino to be financially feasible.” A follow-up report in 2020 determined a tax rate of 40% or lower to be more effective.
Pritzker pivoted by adjusting the tax rate to 26.8% for the state and 23.2% for the city, according to the Northwest Indiana Times. That created a combined rate of 50% on adjusted gross slot machine revenue between $225 million and $1 billion, and a combined rate of 74.7% on adjusted gross slot revenue over $1 billion.
Chicago Casino Location Not Determined
Lightfoot had previously identified five potential locations for the proposed Chicago casino, among them the Harborside Port Authority Golf Course, the site of a former hospital, and the lakefront site of a former U.S. Steel plant on the city’s South Side. Chicago’s casino would also include a resort hotel with 500 rooms or less, meeting spaces, bars and entertainment venues.
But Lightfoot was quoted this week as saying she would not attempt to influence the casino’s location.
”I obviously have my thoughts about where I think the best location would be, but I’m gonna leave that to the operator,” Lightfoot said, according to the Sun-Times. “I don’t need to tell these folks how to do their business.”