Developers submitted five proposals to operate casinos in Chicago, bringing the city one step closer to a potential big revenue boost and achieving a goal that has eluded local mayors for decades.
Still, the project will have to clear major hurdles in the coming months as Mayor Lori Lightfoot’s administration sorts through the proposals and picks a winner. It’s not clear where all of the proposed gambling venues would go but experts generally believe a new casino should be in or near downtown.
Bally’s Corporation submitted two proposals for two different sites and would self-manage the facility, according to the city. HR Chicago submitted a proposal for a single site that would be managed by Hard Rock International, according to the city. Rivers Chicago at McCormick submitted a proposal for a single site that would be managed by Rush Street Gaming, Rivers 78 Gaming submitted a proposal for a single site that would also be managed by Rush Street Gaming.
Rush Street Gaming owns Rivers Casino in Des Plaines in partnership with Churchill Downs Inc.
In a statement, Bally’s said it proposed two sites to the city: One is at the Chicago Tribune Publishing Center, located on the corner of Chicago Avenue and Halsted Street, and the other is the McCormick Place Truck Marshaling Yard near 31st and Lake Shore Drive.
The sports book area at Rivers Casino in Des Plaines in 2020. (Stacey Wescott / Chicago Tribune)
Officials from Churchill Downs Inc., who it was anticipated might bid on the Chicago casino, announced Thursday they would not do so.
In a third quarter earnings call, CEO Bill Carstanjen said officials decided with its partner, Rush Street Gaming, to invest instead in expanding Rivers Casino.
On the day in September when Churchill Downs announced an agreement to sell Arlington International Racecourse to the Chicago Bears, it also announced it was dropping its bid with Rush Street Gaming for a casino in Waukegan.
“So when we looked across those two opportunities,” Carstanjen said, “Waukegan and Rivers, we just decided collectively we were best served focusing on Rivers.”
Regarding Chicago’s new casino bids, Lightfoot said in a statement: “We are thrilled to have received five high-caliber proposals from Bally’s Corporation; HR Chicago, LLC; Rivers Chicago at McCormick, LLC; and Rivers 78 Gaming, LLC. The submission of bid responses represents a major step toward the thoughtful development of a casino-resort that uplifts our businesses, employs and empowers our residents and encourages tourism. We look forward to the next phase of discussions to bring this world-class entertainment experience to our city.”
Revenue from a Chicago casino is considered a key to the $45 billion capital bill passed by legislators in 2019. City officials also hope to use revenues to help plug future budget shortfalls as pension costs increase.
A Chicago casino study in summer 2019 pointed to the merits of a downtown location close to hotels and other attractions, instead of in outlying neighborhoods that out-of-towners with money to spend might deem unsafe.
But an earlier lack of interest in operating a Chicago casino prompted the city to extend the deadline for proposals.
And backing a mega-casino and entertainment complex in the touristy part of the city would be particularly tricky for Lightfoot, who ran for mayor promising to turn City Hall’s focus to helping struggling Chicagoans after her predecessor, Mayor Rahm Emanuel, was seen as favoring the wealthier parts of town.
The same study that pointed to the advantage of a downtown location also argued that the project could fail to attract developers because the original tax structure lawmakers approved was “very onerous” and would have left razor-thin profit margins for the potential owner.
Lightfoot heavily lobbied lawmakers to fix the tax structure, which they ultimately did during their pandemic-shortened session last year, handing the mayor one of her biggest victories in Springfield since taking office.
Despite its big tourism draw, Chicago has been viewed skeptically by the casino industry, in part because of the possible tax burden. Casinos are also facing new competition from the legalization of video gaming and sports betting in Illinois. Yet the state’s existing casinos, which also include those in Elgin and Aurora, brought in more than $120 million in total gross receipts in July — outpacing the take during the same month in 2019, pre-pandemic — and still more new casinos are planned.
Besides Waukegan, the south suburbs area also trying to land new casinos.
As for Arlington Park, Carstanjen said he expects to close its sale in late 2022 or early 2023, and that Bears will build a “world-class stadium and development” there.
He said the sale of Arlington was no reflection on Chicago, “a great American city.”
“It was really a comment on the archaic racing laws that really haven’t been changed in any material way in that state in 30-plus years, and no longer worked,” he said. “And while gaming was passed, it wasn’t really passed in a form that was enough to make up for the racing paradigm in the state.”
Rush Street Chairman Neil Bluhm’s daughter, Leslie, has given more than $100,000 to Lightfoot’s political funds.
Chicago gets 5 casino proposals, including from Bally’s, Hard Rock and Rivers Casino co-owners
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