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When the city of Chicago opened its request for proposal (RFP) to casino operators four months ago, the expectation for Mayor Lori Lightfoot was that it would “garner interest from major Las Vegas operators.”
Turns out that’s not the case.
The Chicago proposal deadline, which was slated to close on Aug. 23, has been extended nine-week to Oct. 29. According to Crain’s Chicago Business, there was a possibility of just one company submitting a proposal.
Last year, only four casino operators responded to Chicago’s request for information. Those companies were MGM Resorts International, Wynn Resorts, Hard Rock International, and Rush Street Gaming.
Chicago has not, and probably will not, release the official list of companies that have submitted proposals. However, by looking at available market data, business models, and total cost, we can use our expert analysis to create a potential list of candidates who might toss their names into the ring.
The new extension will certainly cause ripple effects to the entire opening timeline, which, according to Lightfoot, is in 2025.
With that said, let’s dive into our list of operators who could realistically win the Chicago casino license.
, other legal casinos in Illinois exist, but they are mostly riverboat casinos or Video Gaming Terminals and are not really in Chicago’s city center. When a major casino gets built in Chicago, it will be a huge game changer for the city and state.
Potential Chicago casino operators: who’s out
Let’s start with the names we know are not in contention.
MGM Resorts International
Bill Hornbuckle, CEO of MGM Resorts International, told stock analysts in April, “Chicago is just complicated — we’re not overly keen or focused at this point in time there.”
MGM was curious at one point, but it appears the 40% tax rate an operator would have to pay, plus the miles of red tape, was a massive turn-off.
Winning chance: none
Wynn Resorts
Wynn Resorts took a similar position to MGM and decided not to participate in the RFP with no further comment.
The operator’s focus appears to be set on its Las Vegas, Boston, and Macau properties.
Winning chance: none
Caesars Entertainment
The mega-casino goliath, Caesars Entertainment, pulled its name from contention during its Q2 earnings call.
Caesars CEO Tom Reeg told investors:
“I’ve got no interest in Chicago.”
There could be several factors contributing to this decision. One of them might be the $1 billion investment in digital technologies it already made.
Alan Woinski, president of the consulting firm Gaming USA, told the Sun-Times, “Casinos in [Illinois] have been in nothing but a downward spiral for a decade, except for Rivers. It’s kind of a zero-sum game, and everybody loses.”
Even popular brands like Caesars are climbing out of the cellar after COVID-19 decimated the casino industry. So perhaps the construction of an entertainment district in Chicago isn’t the best use of its cash.
Winning chance: none
Potential Chicago casino operators: who’s in
Now let’s discuss a pair of companies we know have a small desire to operate a Chicago casino.
Hard Rock Florida
Hard Rock was one of four to respond to Chicago’s RFI. While the company hasn’t formally announced it had submitted a proposal, it hasn’t removed its name from contention either.
The Seminole Tribe is in an interesting position to expand its gambling empire. Chicago would check all the boxes for a Hard Rock Casino, and the company has deep pockets. The $1 billion price tag might seem high, but the tribe could make it work.
The only foreseeable issue is the company might have its hands full with several lawsuits down in Florida.
Lawsuits have begun piling up following the Department of the Interior‘s decision to take no action on a new compact between the state and Seminole Tribe. The deal makes Florida sports betting a reality but with a steep cost.
Winning chance: medium
Rush Street Gaming
The local hero, Rush Street Gaming, is expected to submit a proposal to the city. Why wouldn’t they? The company owns Rivers Casinos – Des Plaines by O’Hare International Airport and is a short drive from downtown Chicago. The idea that Rivers would let an outside force set up shop in its own backyard seems highly unlikely.
Depending on how you look at it, there are some things that give the company an inside track or could be a cause for concern.
Rush Street is lead by chairman Neil Bluhm. His daughter, Leslie Bluhm, is law school pals with Lightfoot. Together with her sister Meridith Bluhm-Wolf, the pair contributed a combined $212,500 to Lightfoots 2019 mayoral campaign, according to the Illinois State Board of Elections.
Let’s also not forget Leslie Bluhm’s childhood friends are none other than Gov. JB Pritzker and investment manager Michael Sacks.
Now, all that aside, Rush Street is well-positioned financially and politically to obtain the casino license. Parent company Churchill Downs has enough capital and could leverage more from the Arlington Park Racecourse sale.
Winning chance: high
The dark horse
This last operator is considered the dark horse of the bunch. It’s unknown if the company plans to submit a proposal. However, it would be a primed candidate to do so.
Penn National Gaming
From a financial standpoint, it’s highly unlikely Penn National Gaming would be willing to fork up the eye-popping amount of cash Chicago is asking for. What complicates things even more, Penn National just spent $2 billion to acquire Score Media.
Penn is completing the acquisition with roughly $1 billion in cash and another $1 billion worth of its own stock.
It’s tough to comprehend the company reaching deeper into its war chest to build a state-of-the-art Casino resort in The Windy City. But, stranger things have happened.
Winning chance: medium
Chicago casino specifics
Woinski said other cities have had mixed results with casinos, especially if there are other entertainment options.
Legislation ed in 2019 legalizing IL sports betting across the state and at the four sports arenas in Chicago.
The Chicago Cubs were recently given approval by the Commission on Chicago Landmarks to build a two-story DraftKings sportsbook at Wrigley Field.
There is a chance the other three venues, Soldier Field (Chicago Bears), Guaranteed Rate Field (Chicago White Sox), and the United Center (Chicago Bulls & Chicago Blackhawks), will do the same.
On top of this, there are other metrics an operator must contend with.
We know a downtown casino will have to pay a 40% tax rate. This number was cut down from the original 70% tax rate ed by lawmakers in 2019.
Chicago’s ambitious plan also calls for a 500-room hotel and entertainment district. Bidders also have the option to submit a proposal to operate slot machines at O’Hara and Midway airports. Another “core goal” for any operator is the ability to build a structure “of superb quality and architecturally significant design.”
Once again, the new submission date will cause several delays.
The original plan was to begin the selection process in late September and announce a winner in early 2022. However, now that the deadline has been pushed to October, a winning bid might not be chosen till mid to late 2022. This means the winning operator would have a small three-year window to transform an area in Chicago into a new entertainment district anchored by a Chicago resort.
