The stakes are rising in Chicago, where three companies have submitted a total of five proposals in a competition to develop the first legal casino within the city limits.
Those who study gambling’s history will wonder what took Chicago so long. Its own story is inextricably linked to the evolution of gaming across the country. It’s hard to imagine where Las Vegas would have been in its tumultuous early years without the influence of casino operators and influencers (admittedly, some of them notoriously connected to the Outfit.)
Although there’s no shortage of gambling options in the region, Chicago would be a crown jewel for the right operator. With 9.5 million residents in the Chicagoland area and more than 62 million domestic and international visitors in 2019, the profit potential is immense.
In addition to developing and operating an integrated casino-resort with the full array of restaurants and entertainment options, a lucrative kicker is an optional lease and license agreement for slot concessions at Midway and O’Hare international airports. It promises the kind of immediate jolt to a company’s bottom line that can only sweeten the pot.
Chicago billionaire Neil Bluhm of Rush Street Gaming, which operates the Rivers Casino Des Plaines, has submitted two proposals. Bally’s Corp., originally based in Chicago, also has a pair of proposals, and Hard Rock Casino has a single proposal.
Potential developers agreed to incorporate a 500- hotel-room requirement and convention and meeting space, along with the dining and entertainment options. The winner will also be required to hire minority-owned contractors during construction and also use companies owned by women.
If the lucky developer has a lot riding on its proposal, the city of Chicago has even more at stake. The much-needed tax revenue from a 40-percent rate, estimated at $200 million annually, is expected to help offset Chicago’s scandalously underfunded police and fire pension funds. (Its four public-employee pension funds are owed approximately $33 billion, according to the city’s 2020 Certified Annual Financial Report.)
From a marketing and lobbying standpoint, everyone appears to be bringing their A game. Bally’s Chairman Soo Kim’s company seeks approval for its two-phased plan that, if successful, will result in a $1.6 billion, 500-room casino-hotel. Its possible sites include the Chicago Tribune Publishing Center and the McCormick Place Truck Marshaling Yard.
From Chairman Soo’s recent statement: “This property will be built, owned, and operated by Chicagoans, with a focus on minority and women investors, contractors, suppliers, consultants, and employees. It will generate tax revenue, create good-paying jobs, and attract international, national, and local visitors for generations to come.”
Of the three suitors, Neil Bluhm would appear to have the best access to Chicago Mayor Lori Lightfoot’s vision. In addition to his considerable political clout and association with the city’s financial movers and shakers, his daughter Leslie Bluhm attended law school with Lightfoot and remains the mayor’s close friend.
Chicago has its own way of doing business, to be sure, but what I find intriguing is the apparent ability to float a proposal for a first-of-its-kind casino-resort in the city in phases and in the wake of starting the potentially lucrative revenue generation to be made by operating slot concessions at two major airports.
It’s a nice deal if you can get it.
I have tried to imagine a Las Vegas casino king announcing a plan to build a new resort one tower at a time, but only after receiving a juicy slot concession at soon-to-be Harry Reid International Airport.
The fact that developers with extremely close ties to Chicago’s business and political insiders managed to emerge at the final table ahead of major gaming corporations with dozens of casinos and track records of success stretching for a generation or more only adds to the intrigue. But I suppose this is no time for cynicism.
With the sound of slot machines sure to fill the air at O’Hare and Midway long before the cement dries on the eventual winner’s sparkling new operation, it’s estimated Chicago will see its first permanent casino open its doors in 2025.