Las Vegas resort operator interested in proposed Chicago casino
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The Chicago skyline is seen from the Museum Campus during a cold weather day in Chicago, Sunday, Feb. 7, 2021.
Updated Wednesday, March 10, 2021 | 11:38 a.m.
At least one Las Vegas gaming company has expressed interest in operating a proposed casino in Chicago.
Wynn Resorts was among several Las Vegas-based companies that responded to a request for information regarding the project, according to the city of Chicago's website.
“When a large city of significance decides to consider a gaming resort, we are interested. Chicago fits that profile," Wynn spokesman Michael Weaver said.
MGM Resorts International, along with MGM Growth Properties, a real estate trust firm associated with MGM Resorts, also responded to the request. But an MGM Resorts spokesman said that doesn't necessarily mean the company is interested in the project.
The request for information asked companies to respond to general questions such as where the resort should be located, how much land would be required, how long construction would take and how many hotel rooms should be included.
Chicago officials plan to issue a more specific request for proposals in April to build a “world-class” casino-resort, according to a city news release.
During an interview Monday, Chicago Mayor Lori Lightfoot said the city envisions a Vegas-style resort, but she did not mention a timeline for the project.
“Las Vegas is the epicenter of all things gaming, really, in the world,” Lightfoot said. “In my view, Las Vegas is the gold standard of casino gaming.”
Lightfoot said a casino would be part of a larger entertainment complex, which would fit with how Las Vegas resort operators have shifted in recent years to focus more on entertainment and experiences for visitors. No area of Chicago has yet been selected for the new casino, she said.
Illinois lawmakers passed legislation in 2019 to allow sports betting and paved the way for the Chicago to issue one casino gaming license, the first in the city’s history.
The license would also allow the operator to run slot machines at the city’s two main airports — Midway International Airport and O’Hare International Airport.
City leaders are interested in the tax revenue and bump in tourism from a casino. Lightfoot said some of the funds generated would be earmarked for the city’s police and fire pension programs.
The proposed project received a boost last summer when state lawmakers revised the tax structure for a Chicago casino.
Originally, the effective tax rate for an operator would have been over 70%, according to industry analytic firm Union Gaming. Lawmakers reduce the projected effective tax rate top about 40%.
The 40% rate would still be about six times the tax rate on gaming in Nevada.
“You can still make money at that 40% tax rate — the Chicago license is among the best casino-resort development opportunities right now,” said Grant Govertsen, principal of Union Gaming. “We’ll see who submits for the RFP, but it really could be just about anybody. I don’t think Caesars or Penn National would have a lot of interest, though. Penn National already has some exposure to the Chicagoland area with some suburban casinos.”
Govertsen said a new Chicago resort could cut into future visitation patterns for Chicagoland residents to Las Vegas.
With a metro area of more than 9 million people, Chicago is one of the most populated cities in the country. Only New York City and Los Angeles are bigger.
In 2019, Las Vegas welcomed more than 42 million visitors, according to the Las Vegas Convention and Visitors Authority. About 815,000 visitors flew in from Chicago, which ranked behind only Los Angeles and San Francisco.
“At the margin, yes, there could be some lost business for Las Vegas,” Govertsen said. “By and large, though, as casinos have proliferated across the U.S., that’s generally grown the pie more than it has split up the pie. Whether it’s tribal casinos in California or riverboats in the Midwest, Las Vegas has continued to thrive.”
