The approval of a massive gambling expansion by Illinois lawmakers has been considered a great opportunity by Chicago’s leaders. However, regardless of their efforts to have a local casino up and running as soon as possible, obstacles remain.
Before the proposed casino to start operation, state lawmakers need to vote on a plan that Chicago officials claim makes the gambling venue profitable. Choosing a suitable location for the facility, a matter that has already fuelled some controversy, is also essential.
According to some analysts, the addition of a mega-casino to Chicago’s gambling sector would have two major benefits for the city – fresh tax revenue and economic growth. Both of these have been found attractive by Chicago officials.
In the early 1990s, the former Chicago mayor Richard M. Daley unveiled a proposal for a $2-billion casino complex that is owned by the city and would have offered not only gambling options but family-friendly entertainment options. Former mayor Rahm Emmanuel has also floated some casino proposals that would have been helpful to address the financial difficulties faced by the city.
Mayor Lori Lightfoot has also backed a proposal for a casino as a way to ensure some fresh funding for the city that could be helpful for Chicago officials to find long-term financial stability. She proposed an $11.65-billion budget that got the approval of the Chicago City Council.
Chicago Casino Expansion Signed into Law to Serve as Fresh Funding Source of Massive Capital Plan
Illinois lawmakers also allowed the addition of five other casinos, sports betting and more slot machines at horse racetracks at the ten casinos that already exist in the state of Illinois. This summer, Governor J.B. Pritzker signed the proposed gambling expansion measures into law as part of his own efforts to find a new funding source for a previously-announced $45-billion capital plan.
As CasinoGamesPro has already reported, if everything goes as planned, Chicago could become the biggest American city featuring a mega-casino, offering as many as 4,000 gambling seats on casino tables or slot machines. According to proponents of the project, such a casino could be a worthy rival of some of the largest and most popular casino venues on the Las Vegas Strip.
However, the details about the casino, including its design and location, remain unknown. In August, five locations outside downtown Chicago were evaluated as possible sites for the casino but in the end, a site in close proximity to the central part of the city was recommended. The city’s mayor Lori Lightfoot still said that a downtown location could be considered.
Heavy Tax and Fee Structure Could Make Operation of Proposed Mega-Casino Quite Difficult
For the time being, several estimates for the expected revenue of Chicago’s mega-casino were released. According to state analysts, it will not be difficult for such a large gambling venue to outperform the casino with the highest gross gambling yield in Illinois. Currently, it is Des Plains-based Rivers Casino that generated $440 million in 2018.
According to the aforementioned feasibility study, one of the proposed sites for the Chicago casino project could generate a gross gambling yield that is worth more than $950 million by the venue’s fifth year of operation. Unfortunately, some difficulties could be faced.
The study has estimated that the heavy fee and tax structure in Illinois’ gambling legislation, which features the highest rates nationwide, is likely to make the financial state of a Chicago casino venue difficult. The effective tax rate could reach up to 72%. That includes a 33% tax on gross casino receipts.
According to the study, the revenue of any casino operator that runs a casino based in the city is likely to be quite small.
Chicago officials and state lawmakers have been negotiating some changes to the legal regime that would be applicable to the proposed casino. A plan under which some fees and taxes for the casino would have been reduced was rolled out by the gambling expansion’s sponsor, State Representative Bob Rita. Unfortunately, the fall veto session of Illinois legislators came to an end without them taking any actions on the issue.
As Chicago mayor revealed, city officials plan to make another attempt to see the issue considered in January 2020.
Plans for Mega-Casino in Chicago Face Opposition, Too
Not everyone in Chicago has backed the mega-casino proposal. Some organizations, such as the Illinois Gaming Association, have shared fears that the expansion would lead to an over-saturation due to the expansion. Under the gambling expansion measure that Illinois Governor signed into law earlier this year, new casinos are set to be established not only in the south suburban area of Chicago but also in Rockford, Danville, Waukegan and the southern part of the state.
A local non-profit organization, called Illinois Church Action on Alcohol & Addiction Problems, has shared fears that casinos take advantage of the poorest and most vulnerable society members and encourage them to gamble – an action that could fuel problem gambling.
On the other hand, some Chicago neighborhoods have not been too keen on the idea of casino expansion either. Some aldermen criticized the idea, saying that a casino situated in historically “black” neighborhoods would have a devastating impact on local communities.
In any case, even without the recently-faced difficulties, a Chicago casino would not be able to start operation anytime soon.
The gambling regulatory body of the state has a year to review applications filed by operators willing to be given the chance to run the mega-casino. Also, background checks are set to be made by the Illinois Gaming Board before any operating license is issued. Apart from that, public hearings are also set to be held in Chicago regarding the site for the future gambling venue. The construction would be given the green light once a location for the proposed casino project is approved.
