‘High Tax Rate.’ ‘Complicated.’ ‘No Interest.’ Chicago Casino Project Extends RFP Deadline, But Is More Time The Answer?

Note from the editor: The opinions expressed in the following are solely those of the author.

The deadline for game applications in Chicago has been moved up to Oct. 29 from the original date of Aug. 23.

According to Mayor Lori Lightfoot of Chicago, potential bidders will be given additional time to assess the project.

The city has decided to extend the deadline for serious bidders in order to receive a wide range of impactful proposals. I am eager to review these bids and am excited to collaborate with the chosen candidate to bring Chicago’s first casino to fruition.

At present, Rush Street Gaming is the only known bidder for the Chicago game project. However, awarding the project to them without any other competition could potentially lead to political challenges for Lightfoot.

Neil Bluhm, co-founder of Rush Street Gaming, has a daughter named Leslie who has contributed more than $100,000 to Lightfoot’s political campaigns in the past.

Brian Hopkins, Alderman of the 2nd ward, informed Crain’s Chicago Business.

I think that if the mayor agreed to a contract that made it the sole provider of something so important, there would be a lot of resistance.

The project will be approved by gaming executives from Caesars Entertainment, MGM International, and Wynn Resorts.

Tom Reeg, the Director of Caesars, delivered the latest update during an earnings call with shareholders.

I do not want to visit Chicago.

In June, Lightfoot declared that the allocation of the Chicago casino license would not show favoritism towards local applicants.

We’ll challenge that common saying with another: At times, those in need must accept what is offered.

Why isn’t the Chicago game registration more well-liked?

To begin with, the current effective tax rate stands at 40%, which is relatively high.

Lightfoot should be commended for lowering the effective tax rate from 72%. One of her major accomplishments was successfully renegotiating the casino tax structure.

However, the figure of 40% is quite significant. Bill Hornbuckle, the CEO of MGM, mentioned the high tax rate, among other reasons, as a factor in his company’s lack of interest.

Chicago is a city with a complex nature, where its history, tax structure, and the idea of a large-scale integrated resort do not easily fit together.

In addition to the high tax rate, the construction of the resort is expected to surpass $1 billion in expenses.

The terms “complicated” and “the history of Chicago” suggest a negative connotation that appears to hinder the city’s progress.

Chicago is well-known for its tumultuous political environment, often described as “messy” – a fitting term for the project at hand. It has been more than two years since Illinois Governor JB Pritzker signed the gaming expansion bill, which included the long-awaited Chicago casino.

After two years, the city has seen some positive results, with the most notable being the improvement in the tax rate. However, uncertainties remain regarding the location of the Chicago casino, the operator, and other key factors.

After Chicago resolves its issues, it’s important to note that the Illinois Gaming Board (IGB) is not known for quickly approving casino applicants. Operators are also unlikely to be enthusiastic about navigating the IGB’s approval process.

Despite Chicago not being prepared to submit an application yet, Lightfoot has previously criticized the IGB for their slow and complicated process.

What will happen to the Chicago game then?

Gaming operators are reluctant to extend the request for proposal (RFP) deadline, but Lightfoot’s office believes that the extra time will attract more bidders.

At present, Rush Street is the leading contender to obtain the license, with no apparent competition in sight.

However, there is a possibility that another proposal will be presented, according to a source from Crain’s Chicago Business.

Surprisingly, Hard Rock International has chosen not to comment on the issue. Out of the four gaming companies that initially responded to Chicago’s Request For Information, including Rush Street, MGM, and Wynn, only Hard Rock International has stayed silent, while the other two have since dropped out of the discussion.

As a result, it is reasonable to assume that Hard Rock requires additional time to evaluate the project. Additionally, they are in the process of establishing a casino in Rockford, which is anticipated to be the next one to launch in Illinois.

Residents of Chicago will eventually be able to obtain their game, even if it doesn’t happen this year, next year, or in any upcoming season.

Yet, there are individuals who currently hold the belief that achieving this goal will prove to be a difficult endeavor.