Behind the dollars: Who has the best hand in the Chicago casino dealing
The city’s five bids are full of lofty boasts, but the choice will come down to quick delivery and economic potential.
As city officials dig into the five competing proposals for a new Chicago casino, they will walk into a squall of numbers and promises.
The cost estimates for each mega-complex range from $1.3 billion to $2 billion. Most foresee hundreds of hotel rooms, and some tantalize decision-makers with talk of advance payments to city coffers if awarded the license.
One says in its presentation that it would be a “top three” entertainment attraction in Chicago, behind Navy Pier and Millennium Park. Others promise an “anchor destination for our city” or a “world-class destination resort.”
But key staff in Mayor Lori Lightfoot’s administration might concentrate on just two rules: Keep it simple, and keep it accessible. Those two factors will decide how quickly the city and its threadbare pension funds can start seeing revenue, and whether large crowds will hit the gaming positions and entertainment venues, maximizing the potential income. Officials are shooting for annual tax revenue of $200 million.
On that basis, some insiders believe the casino competition boils down to Neil Bluhm versus Neil Bluhm.
The head of Chicago-based Rush Street Gaming and owner of the lucrative Rivers Casino in Des Plaines, Bluhm is behind two proposals, either of which could benefit from few complications and a quick start. With the firm Related Midwest, Bluhm wants a casino on vacant acreage in the development site known as The 78, running southwest from Roosevelt and Clark.
It’s close to downtown, and the land is shovel-ready. But Bluhm has hedged his bets, offering on his own a casino plan for the existing Lakeside Center at McCormick Place, the oldest building at the convention complex and the one least utilized. It’s got parking already there and vast floors ready for slots and table games.
Nothing is certain, however. Bluhm has crossed swords with Lightfoot over allowing sports betting at Chicago stadiums, arguing it would cut into casino revenue the city needs.
“The person who gambles on sports is very likely a gambler who also bets on tables and slot machines,” he said at a City Council hearing. “It’s 20% of our business ... This isn’t some hypothetical discussion.”
The mayor backs expansion of sports gambling. Her deputy mayor for economic development, Samir Mayekar, said Friday that 96% of sports gambling occurs on mobile apps, not at casinos.
The other proposed sites — two from Bally’s and one from Hard Rock — could appeal to the administration and the City Council, which has the final say on which casino proposal goes to the Illinois Gaming Board. But all have serious potential drawbacks.
“I think everybody sees this as Neil Bluhm’s game to lose. Lakeside Center is probably the city’s lowest-risk choice,” said a developer with no direct interest in the casino outcome.
He said Bluhm’s partner at The 78, Related Midwest, “has a lot of power in this market.” The company is part of a New York firm whose chairman, Stephen Ross, “has been working the phones here,” the developer said.
A spokesman said Bluhm was unavailable for comment Friday. Related declined comment.
Chicago’s convention complex figured in two other casino bids. Bally’s, which also submitted two proposals, used one to situate its casino at McCormick Place’s truck marshaling yards at 31st Street and DuSable Lake Shore Drive. Its other proposal would involve the Chicago Tribune printing plant site, near Chicago Avenue and Halsted Street, where the Tribune and Sun-Times are published.
And Hard Rock, with its plan to work a casino into the proposed One Central mega-development over Metra tracks west of Soldier Field, looked to Lakeside Center as a temporary gaming location.
The plans raise long-standing issues about whether conventions and gambling are a good mix. Trade show managers suspect blackjack and one-armed bandits will take people away from their revenue-producing events.
“A lot of show managers like this about McCormick Place: They know that when the vendors put up their booths, they’re going to get an audience,” said a person well-versed in the business.
However, the meetings business has yet to bounce back from the pandemic, so some might crave any solution that draws a crowd. There was no comment from Choose Chicago, the agency that promotes meetings and tourism.
The Chicagoland Chamber of Commerce will have a voice in casino placement and has long advocated for a downtown site that helps the hotels. Its president and CEO, Jack Lavin, did not comment.
The Hard Rock proposal at One Central would piggyback on developer’s Bob Dunn’s plan for a wall of towers to be built over the train tracks. But it’s all predicated on a state-subsidized transit hub, costing an estimated $6.5 billion, that has drawn scrutiny.
One source said City Hall is intrigued by the two Bally’s proposals. But some see the Freedom Center site as too distant from downtown to draw a lot of people. “The traffic on Halsted is a disaster already at rush hour,” a developer said.
And its plan for the truck marshaling yard would make the casino a neighbor of the redevelopment at the old Michael Reese Hospital property. Nearby residents and Ald. Sophia King (4th) have firmly opposed a casino.
For anyone looking for architectural flourishes, the biggest offering is at The 78. The plan includes a 1,000-foot observation tower—its rendering makes it look like a giant circular staircase. It’s almost as tall as 875 North Michigan, the former John Hancock Center.
As part of its entertainment component, the plan promises to re-create Mister Kelly’s, the storied Rush Street nightclub that was a stopover for musicians and comedians traveling from coast to coast. It closed in 1975.
But fading memories won’t drive this decision. Dollars, crowds and clout will.