Gaming companies provide input on potential development of a downtown Chicago casino

MGM Resorts International, Wynn Resorts, Hard Rock International, and Illinois-based Rush Street Gaming were among the 11 companies, real estate developers, consultants, and a neighborhood group that provided input to what the city termed as the first step in the planning process.

Representatives from the four companies did not respond to email requests or declined comment. A representative for one casino operator seemed to be caught off-guard by the city’s release of the summary.
Answering the RFI doesn’t mean the companies will actually make a formal bid on the project.

Real estate investment trust MGM Growth Properties also provided perspective on the project, which is expected to start off with a temporary casino while the permanent facility is built. MGM Growth is 53% owned by MGM Resorts and owns the land and real estate of 15 gaming properties covering eight states, all of which are managed by MGM Resorts.
All respondents agreed the COVID-19 pandemic would not impact the casino project, given the city’s current timeline for selecting and licensing a casino operator and for the construction of the complex. The companies also agreed that community engagement and support for the casino were integral to its success.

The casino companies told the city the project should be located downtown or near downtown and  include a hotel, food and beverage outlets, retail attractions, parking, and space for conventions, entertainment, and events. They also suggested the temporary casino be located away from the site of the permanent property through the repurposing of an existing structure.

“The many perspectives and insights captured in this RFI are indicative of the excitement and anticipation of this once-in-a-lifetime project,” Chicago Mayor Linda Lightfoot said in a statement. “Thanks to the responses of nearly a dozen RFI respondents, we are not only one step closer to bringing the long-awaited Chicago casino to life but have the critical information we need to ensure this project will be a success.”

Chicago, with more than 9.5 million residents, represents one of the largest untapped gaming opportunities in the country.

Illinois currently has 10 casino properties and a video gaming market which is one of the nation’s largest, with 37,459 games in 7,135 locations statewide. Gaming, however, has been closed in the state since Nov. 20 due to the resurgent pandemic.

The casino closest to downtown Chicago is Rush Street’s Rivers Des Plains Casino, roughly 20 miles north.

The Chicago casino was part of the 2019 legislative package that saw Illinois lawmakers approve the nation’s largest gaming industry expansion to an existing market in more than a decade.

However, the bill imposed a 72% tax rate on the Chicago casino – the highest gaming tax in the nation and one which an independent analysis determined would make it impossible for any operator to turn a profit.

The city went back to the legislature this spring and negotiated a new tax package in which a Chicago casino would pay a combined tax rate of 50% on annual slot machine revenues of between $225 million and $1 billion. The combined rate would jump to 74.7% on slot revenues that exceeded the $1 billion mark.

Lightfoot said this year the casino could bring in $1.2 billion in annual taxes to the state and city.
The respondents to the information request provided feedback on how the city could assist casino developers, strategies for community engagement, the RFP process, and estimated construction timelines.

In a statement, Lightfoot said the pursuit of a casino “has been decades in the making” and will support the city’s pension obligations. The city believes the casino will drive infrastructure funding and fuel thousands of new jobs during the construction and operation phases.