Mayor Lori Lightfoot is inviting potential casino developers to the table in Chicago, asking them to show how they’d operate a big-city gambling house.
City officials on Thursday dealt out a formal request for information, a non-binding solicitation that’s the first step in what will be a years-long journey toward firing up the bright lights in Chicago — and turning on a new revenue stream to its depleted police and firefighter pension funds.
“After securing favorable legislation that had eluded us for decades, Chicago can finally pursue a once in a generation opportunity to bring a casino to our city, generating hundreds of millions in new gaming revenues to shore up the City’s pension obligations and drive huge levels of infrastructure funding in Illinois as well as creating thousands of new and much needed jobs for local residents,” Lightfoot said in a statement. “This is the right time to begin having these discussions as we continue to lay the foundation to make a strong recovery from the impacts of the COVID-19 pandemic.”
In the request — which touts the city as “the largest untapped gaming opportunity in the country” — Lightfoot’s team posed nine questions for casino operators to tackle, ranging from how big the venue should be, to what amenities it might include and how gaming plans might coexist with Chicago’s existing attractions.
The freshman mayor also wants developers to weigh in on the biggest question still hanging over the process: Where to put it?
Lightfoot herself has kept a poker face on the location, though she has said it should be part of “a large entertainment district.”
Last summer, her office offered up five South and West side sites — a list she stressed is “not definitive” — for a state-mandated consultant to evaluate. They included the Harborside Golf Course area at 111th Street and the Bishop Ford Freeway; Pershing Road and State Street; Roosevelt Road and Kostner Avenue; and the former U.S. Steel parcel at 80th Street and Lake Shore Drive.
But “the slate is clean” for developers to opine on where the casino should go, according to Samir Mayekar, Lightfoot’s deputy mayor for economic and neighborhood development.
“We are very interested in what developers will come back with, the acreage they envision, the entertainment district possibilities, all of those factors,” Mayekar said.
Gov. J.B. Pritzker initially advocated putting it on the South Side or West Side to help spur development. Gaming industry experts say that’s the least profitable choice and have pushed a downtown locale more accessible to tourists — but the convention industry is against that idea.
Lightfoot’s office has promised “a robust community engagement process,” including a series of public meetings to gather residents’ input on the location.
The consultant last summer said a “centrally-located casino that is in close proximity to high-quality hotels and other notable tourist attractions” could rack up $1.2 billion per year — almost triple annual revenue of Illinois’ most profitable casino today, Rivers Casino in Des Plaines.
After previous mayors tried and failed for decades to garner support from state lawmakers, the Chicago casino became a reality in spring 2019 as part of a huge statewide gambling expansion signed into law by Pritzker.
But the city’s bid almost crapped out last summer when a state-mandated consultant’s report decided an effective 72% tax rate in the original gaming law was too high for any developer to turn a profit.
So Lightfoot’s team headed back to Springfield in May and secured a legislative fix that lowered the taxes to an effective rate around 40%.
The Las Vegas firm that deemed the original tax burden too “onerous” called the new rate “significantly more palatable for potential developers” and, in a report issued earlier this month, urged the city to get the ball rolling by soliciting information from developers.
The city is asking developers to submit packets of information by Oct. 21.
After reviewing those, Lightfoot’s team will begin planning public meetings and planning when to request firm proposals from developers, Mayekar said.