Major Las Vegas casino operators do not appear to be interested in developing the first-ever casino in downtown Chicago. Companies originally had until August 23 to submit proposals for this project, a deadline Mayor Lori Lightfoot has extended to October 29.
The Las Vegas Strip’s four biggest operators – Wynn Resorts, Las Vegas Sands, Caesars Entertainment, and MGM Resorts International – reportedly do not plan to submit a proposal.
Mayor Lightfoot is still confident that more bidders will submit proposals before the new deadline
Despite this lack of interest, Mayor Lightfoot is still confident that more bidders will submit proposals before the new deadline. She said: “Extending the deadline for interested bidders will allow the city to collect as many robust, impactful and transformative proposals as possible.”
She did say that they have already attracted the interest of “very serious and accomplished gaming interests from Las Vegas.”
Hefty tax rate
Some people are pointing at the 40% proposed tax rate as a reason for the lack of interest in the Chicago casino project from major operators. The corresponding rates are just 6.75% in Nevada, with the nationwide average being between 10% and 25%. Las Vegas-based consulting firm Global Market Advisors’ Brendan Bussman believes that a Chicago casino is a great idea, but he suggests halving the tax rate. This would require changes on a legislative level, however, which could pose its own issues as there was a lot of debate on the matter when the casino project was originally approved following an extended legislative session in 2019.
Without making an alteration to the 40% tax rate, Bussman does not believe that much will change with the interest levels in the project. Initially, Illinois was even considering a 70% tax rate, but gaming companies managed to persuade lawmakers against this hefty rate.
Some of the casino operators that could be interested in submitting a proposal include the Seminole Tribe, Boyd Gaming, Bally’s Corporation, Genting Group, Mohegan Gaming and Entertainment, Landry’s Inc., and the hometown operator, Rush Street Gaming.
A potentially lucrative market
There is a significant potential market in the Chicago area for this casino. The metro area of the city has 9.5 million residents, while 60 million domestic visitors and 1.5 million international visitors came to Chicago in 2019. There is also talk of the ban on sports betting in Chicago being removed, which would help increase the revenue at the casino.
A Chicago casino is projected to generate tax revenue of about $200m each year for the city. The local government hopes to use this tax revenue to help its underfunded fire and police pension funds. Proponents of the development envision the casino resort having as many as 500 hotel rooms, as well as entertainment venues, meeting rooms, restaurants, and bars.