Chicago Mayor Lori Lightfoot said she hopes a winning bidder for the city’s sole casino license is chosen by the end of this year.
The city will put out a request for proposals in early April and the state’s gaming board will decide the winner with input from local officials over the following months. The timeline of the request for proposals will be released in the coming weeks. The mayor said she hopes to work with regulators on a expedited approval process that could see the casino opened by 2025 at the latest. Lightfoot has considered a casino as an option to raise cash since she took office.
“This is taking too long,” Lightfoot said in an interview. “I’m an impatient person by nature.”
The opportunity is one of the rare events where a major U.S. city gives an exclusive license to operate a casino. Still, Chicago’s expansion, first approved by state legislators in 2019, has been delayed — initially by conditions originally put in place that made the project less attractive to potential operators and then by the coronavirus pandemic.
The legislature went back last year and tweaked the requirements, lowering the overall tax rate from about 72% to about 40%, according to Grant Govertsen, a consultant with Union Gaming who advised state regulators. Other terms were also changed such as the license fee, which can now be paid over six years instead of two.
After the legislation was initially passed, Lightfoot had said she wanted to be able to propose sites for the casino that would have the most impact on neighborhood redevelopment, something operators feared might limit the casino’s business. In an interview, Lightfoot said she expects the operators to come to her with their locations chosen. “We’re going to be flexible,” she said.
The opportunity includes the operation of as many as 4,000 gaming positions, including at O’Hare International Airport. Casino operators are also pressing for some assurance that the city won’t allow others to put the devices in bars and other locations. Slot machines are already present in much of the state.
“This has been a long time coming,” Lightfoot said. “We are not going to undercut this opportunity.”
Lightfoot envisions the casino as the anchor for a larger entertainment complex and a destination that draws locals as well as tourists to the nation’s third-most-populous city. The selected casino operator will receive a chance to create a resort with a hotel tower, restaurants and spa.
The city has been trying for decades to bring a casino within its borders and its arrival eventually could mean a new source of revenue, which will help Chicago chip away at its rising police and fire pension costs. The city’s unfunded pension liability across its four retirement plans stands at about $31 billion.
While a permanent structure is built, the operator could have the opportunity to set up a temporary casino for up to 36 months. That could jump start the flow of revenue to the city but not to the magnitude as the permanent one, Lightfoot said.
A half-dozen gaming companies participated in a request for information the city made last year. Participants included MGM Resorts International, Rush Street Gaming, Wynn Resorts Ltd. and Hard Rock International, although their input does not mean they’ll submit a bid. The greater Chicago area is already fairly well served by casinos. Hard Rock is building two: one in Rockford and another in neighboring Gary, Indiana.
“When a large city of significance decides to consider a gaming resort, we are interested,” Michael Weaver, a spokesperson for Wynn, said in an email. “Chicago fits that profile.”
Interest in expansion throughout the gaming industry was largely on hold during the pandemic given casino shutdowns stressed balance sheets. Illinois’s existing casinos saw a steep drop in business. Now, Chicago’s search for an operator comes as capital availability improves in the industry, and the city slowly emerges from the pandemic. In March, Lightfoot has expanded indoor dining capacity to 50%, and announced that baseball fans can return to stands at limited capacity in April given the significant drop in Covid-19 cases, hospitalizations and deaths.