Chicago's casino plan looks to be in trouble
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Building a successful Chicago casino complex — at least on paper — should be a slam dunk.
Even ardent opponents of legalized gambling would have to acknowledge the following: If Illinois is going to have casino gambling, the city of Chicago is the logical place to put one.
It’s considered a major city that draws tens of millions of visitors per year from all over the world. It’s impossible to see how a casino and all the glitzy amenities that go with one could not be a huge success.
But consider the following statement from the publication Best Casinos — “It now appears that there are very few companies interested in opening the first casino in Chicago.”
New reports indicate that, initially, four casino operators were interested in submitting city-requested development proposals by the Aug. 23 deadline.
But two of them — MGM Resorts International and Wynn Resorts — are no longer interested. Of the other two — Hard Rock International and Rush Street Gaming — Hard Rock wouldn’t comment and Rush Street said it’s still evaluating “this unique opportunity.”
What’s the road block to what appears to be a sure winner?
The powers-that-be — city and state officials — have loaded up the proposal requests with so many upfront costs and expensive obligations that prospective developers are starting to see this sure win as no-win, at least for them.
At one point in the process, government officials sought a 70 percent take of casino profits, a level so ridiculous that the tax level was lowered to a mere 40 percent.
Additionally, Illinois law required the winning bidder to pay $30,000 upfront for every slot machine and seat at a gambling table. That could run up to $120 million. Additional payments based on gross revenues could throw another $480 million into government coffers over a six-year payment period.
All told, the successful bidder for the proposed casino/mega-resort could be required to expend “$1 billion or more” to make it a reality, The Wall Street Journal has reported.
Given those requirements, casino operators are asking themselves what their prospects for financial success would be if they embrace the financial and development obligations the government is demanding. Apparently, the answer is not good.
What appears to be obvious is that state and local government — anticipating multiple millions of dollars in revenue — are intent on strangling the golden goose while it’s still a gosling.
So far, Mayor Lori Lightfoot is showing no concerns about the bidding process, and maybe her confidence will be proven justified in the end.
“We want to make sure that we’re setting up whoever the operator is for maximum success,” she said.
If that was, indeed, the case, operators would be lining up to submit bids.
Many Chicago officials have dreamed for years of a casino in the Windy City. But plans have always fallen short, victims of ruthless insiders pursuing their personal financial interests rather than what’s best for the city and state.
It looks as if that could be happening again, this time because tax-starved government officials are making unreasonable demands on developers who need to make a solid profit to justify a huge investment.
