For 30 years, the city of Chicago has coveted a casino of its own. Mayor Richard Daley, the Second, wanted the city to own the casino and lease its operations to a casino company. The other mayors in the hunt, Rahm Emanuel and Lori Lightfoot, were willing to host a casino, collect the taxes and enjoy the other benefits. Lightfoot may get that wish on her watch.
In June 2019, the Illinois Senate passed a major gaming expansion bill. The bill authorized sports wagering, a Chicago casino, five more casinos in the Land of Lincoln, additional slots and table games for existing casinos, slots and table games at racetracks, slots at Chicago’s airports, and one additional VLT in each VLT location. It was the largest expansion in the state since the legalization of riverboat casinos in 1990. The details of the bill are complicated and each form has separate requirements, fees, and timelines.
In the 2019 legislation, the Chicago casino was assessed an additional tax. The idea pleased the politicians, but it did not have many supporters in the gaming industry. With the feedback from the industry, Mayor Lightfoot realized the error. She rushed back to the legislature and asked to have the tax reduced. In time, the lawmakers complied. Sports betting and the additional VLTs began operating as soon as it was possible. However, since the pandemic hit, casino development has taken a backseat in Chicago. But by April 2021, Lightfoot had decided she and the city of Chicago were ready to begin the process of seeking a casino.
Skyline of the City of Chicago from Lake Michigan – Shutterstock photo
On April 22, Chicago issued a Request for Proposals (RFP). The would-be bidders for the Chicago license have until August 23, 2021, to submit their proposals. In late September, the city envisions presentations by the bidders, with a final choice being made in early 2022. The Plan Commission, Committee on Zoning, and full City Council must approve the bidder and the project. The mayor sees the process as being easy and quick. However, the state’s Board must grant a casino license to the project and to the key individuals associated with it. The city wants the project that best meets its own goals; the Gaming Board wants a qualified and suitable operator. The vetting and licensing process is rarely instantaneous, nor is it guaranteed the operator will be found suitable.
Lightfoot anticipated difficulty with the Board when she said, “Once we present a proposal to them, we’ve got to move forward expeditiously. And again, I don’t want to prejudge it, but I’m looking at the time, like the time it takes for the Gaming Board to do its work — it’s got to speed up.”
Unfortunately for the mayor, the commission has another charge. According to the original Illinois Gambling Act: “While authorization of riverboat and casino gambling will enhance investment, beautification, development, and tourism in Illinois, it is recognized that it will do so successfully only if public confidence and trust in the credibility and integrity of the gambling operations and the regulatory process are maintained. Therefore, regulatory provisions of this Act are designed to strictly regulate the facilities, persons, associations, and practices related to gambling operations pursuant to the police powers of the State, including comprehensive law enforcement supervision.”
Licensing is not likely to be the only obstacle a proposed casino will face. The city and the mayor have high expectations. They want an “iconic” outdoor public space. The city has also expressed a desire for “ancillary spaces” for potential museums, performance venues, recreational facilities, retail shops, and restaurants that would focus economic development on city brands and city-based suppliers. And they want the citizens of Chicago, especially those who expect to be impacted, to have a voice in the process. Politically, those are the right words to say, while practically, they are difficult to realize.
The mayor believes as many as a dozen companies are just waiting to submit a proposal. Like the other parts of this process, creating the proposals may not be as simple as the mayor imagines. The prospective bidders have to do their due diligence and the necessary mathematical modeling, find a desirable site, design an iconic property and write a proposal, none of which is simple, easy or quick. Four months is a short timeline to create a proposal to construct a billion-plus-dollar resort. It will be a challenge for any bidder. Still, the ultimate prize is apt to be worth the effort. The licensee will have an exclusive right to a casino in Chicago, a city with 9.5 million residents and over 60 million visitors a year. Barely mentioned in the press coverage are the slot machines at the airports – the licensee gets those along with the casino license.
The licensee will also be allowed to operate a temporary casino during the construction of the final resort. The temporary casino and the slots at the airport will certainly be incentives for prospective licensees. The cash flow from both can begin soon after the license is granted and will be important to the developer. The casino is not expected to open before 2025. The timelines are aggressive, the expectations exceedingly high and the risks considerable. But the prize is the Windy City, the home of the Bulls, Cubs, and Bears — tempting indeed. Somewhere, someone is dreaming big dreams and crunching the numbers. We will have to wait until August to find out who has been tempted to court the Windy City and Mayor Lightfoot.
