Chicago Takes Key Step In Downtown Casino Project, But Don’t Hold Your Breath

Written By Joe Boozell on September 1, 2020 – Last Updated on November 9, 2020

The city of Chicago issued a request for information (RFI) on August 27 to seek unique concepts for its highly sought-after downtown casino project.

Mayor Lori Lightfoot is eager to learn about the strategies used by real estate developers and game providers.

However, there is still plenty to discover.

Lightfoot proposes that establishing a city game could be a lucrative business opportunity for the city.

Having finally secured long-awaited beneficial legislation, Chicago now has the opportunity to develop upscale casinos, potentially generating hundreds of millions of dollars in new gaming revenues. These funds could then be used to bolster the city’s pension obligations, enhance infrastructure funding in Illinois, and generate thousands of essential new jobs for residents.

This is the ideal moment to begin conversations as we continue to build the groundwork for effective treatment against the repercussions of the COVID-19 pandemic.

The location of the game should be the first and most important question to ask.

The official RFI, which can be found in full by clicking here, also encourages the community to provide feedback on the following:

Guidelines for organizing a spontaneous game.
Suggestions for the size and capabilities of a gambling facility.
Services that have the potential to increase sales.
Managing COVID-19 as a component of the natural world.
Best practices for encouraging group involvement.

Please email your comments to Chicago by October 21st.

location-related issues

Lightfoot suggested five possible sites for a casino in January. These sites were:

Harborside
Reese Michael
State and Pershing
Kostner and Roosevelt
US Steel

All five locations are located in either the northern or southern parts of the city. Lightfoot suggests that the list may not be complete, but Governor J.B. Pritzker of Illinois is advocating for economic growth in these regions.

Despite this, industry experts suggest that these areas are unlikely to generate significant profits and instead recommend a location in or near the downtown core.

It is expected that the location will be closer to luxury resorts and easily accessible for tourists. A state-appointed advisor predicted last summer that a casino located centrally could bring in $1.2 billion annually, nearly three times more than the revenue of the current top-performing casino in Illinois.

It is anticipated that the location will play a critical role in this process, directly affecting income. However, conflicting objectives may be present. Specifically, Lightfoot’s statement validates that Chicago faces pension obligations.

Lightfoot has aided in the viability of the Chicago game job.

At first, the Illinois Gaming Act set a tax rate of 72% on reputable casinos.

According to Union Gaming Analytics’ feasibility study, creating a successful game with that issue would not be feasible.

As a result, Lightfoot’s team lobbied for a legislative resolution in Springfield, leading to the implementation of the following new tax rates on slot revenue:

Out of a total of $25 million, 10.5% will be allocated to Chicago and 12% will be allocated to the state.
16% is allocated to Illinois and 14% is allocated to Chicago, with amounts ranging from $25,000,001 to $50,000,000.
Al is allocated 20.1%, between $50,000,001 and $75,200,000 is allocated, and 17.4% is allocated to Chicago.
21.4% of the funds between $75,000,001 and $100,000 is allocated to Illinois, while 18.6% of this sum goes to Chicago.
Distribute 22.7% to Illinois and 19.8% to Chicago from a total of $100,000,001 to $150,000.
24.1% of the total amount between $150,000,001 and $225,000,000 is allocated to Illinois and 20.9% is allocated to Chicago.
Illinois receives 26.8% of the funds within the range of $225,000,001 to $1 billion, while Chicago receives 23.2%.
Over $1 billion is being divided, with Illinois getting 40% and Chicago receiving 34.7%.

Although the grade limits experienced significant changes, the tax rates stayed constant.

In the past, slot machine revenue exceeding $200 million faced a steep 74.7% tax rate. The threshold for this tax has now been raised to $1 billion.