Posted on: April 30, 2021, 08:20h.
Last updated on: April 30, 2021, 03:35h.
Officials in Chicago remain optimistic regarding interest for the city’s lone gaming license, despite MGM Resorts announcing this week that the odds of it making a bid are long.
During the company’s first-quarter 2021 earnings call this week, MGM executives revealed that the market conditions in Chicago don’t make the opportunity overly attractive.
“Chicago is just complicated. We’re not overly keen or focused there at this point in time,” said MGM Resorts CFO Jonathan Halkyard.
City Not Worried
Chicago Mayor Lori Lightfoot’s administration isn’t too concerned that MGM, one of the world’s most respected casino operators, likely won’t make a bid to win the Windy City gaming privileges.
“Chicago would have been delighted to receive an MGM casino proposal. We understand each casino operator will need to determine which opportunities are best suited for their organization and that MGM has prioritized its focus for several years on opportunities in Japan and its mobile wagering businesses,” said Asha Binbek, Lightfoot’s deputy press secretary.
We believe other well-respected casino operators have a different view of this once-in-a-lifetime opportunity in Chicago, and we expect to receive outstanding proposals for the Chicago casino,” Binbek added.
Chicago was once seen as the largest casino market liberalization in decades. But the Illinois General Assembly’s initial tax structure turned off many casino companies early.
An independent feasibility review was conducted by Las Vegas-based Union Gaming. That study concluded that in a “best-case scenario,” profit margins for the lone integrated casino resort in Chicago would “likely equate to a few pennies on the dollar.”
Lightfoot successfully petitioned state lawmakers to amend the tax structure. Gross gaming revenue (GGR) generated by slot machines at the future casino will now be taxed between 22.5 percent to 74.7 percent, depending on total win. Table games will be taxed between 15-35 percent, also dependent on total GGR.
Chicago’s Casino Details
Chicago unveiled its request for proposal (RFP) document last week. The RFP details certain particulars each casino bid should include.
The city says the integrated resort must feature a hotel with up to 500 rooms, convention and meeting space, numerous restaurants and bars, and a theater or concert venue. Chicago adds that the design should be “architecturally significant,” and help spur economic growth around the resort.
Chicago’s preliminary request for information (RFI) round garnered 11 responses. Among the casino firms that submitted RFIs included Hard Rock International, MGM Resorts, Rush Street Gaming, and Wynn Resorts.
MGM’s real estate investment trust — MGM Growth Properties — along with four other real estate developers, additionally submitted RFIs.
Rush is the only casino operator that is currently licensed in Illinois to conduct gaming. The Chicago-based company operates the Rivers Casino in Des Plaines and additionally conducts retail and online sports betting.
Hard Rock will soon join Rush. The casino and hospitality giant is developing a $310 million casino resort in Rockford. The Chicago suburb was one of five approved in the state’s 2019 gaming expansion package to welcome a casino.