The city of Chicago has waited years for its first casino and, as it seems, they’ll have to wait even longer. Right now, the casino development depends on the interest from the country’s big gaming operators. At the moment, a lot of them consider Chicago casino a pretty risky bet.
Why Won’t Nevada Gambling Operators Won’t Bet on A Casino In Chicago?
The long wait was supposed to come to the end this week. As previously planned, Monday was the deadline for all interested casino operators to submit their proposals for the development of the casino and resort. However, the low number of potentially interested bidders forced the city to push back the deadline even further. Now, the proposals have to be submitted by October 29th.
Earlier this month,
Chicago Mayor Lori Lightfoot issued a statement announcing the extension of the deadline. She also added that this extension should allow the city to collect more meaningful and transformative proposals. Nevertheless, the situation on this matter remained quiet.
The new casino, as the city envisions it, will be a massive project and one of the top establishments in the world. Besides gaming space, the new facility should include a resort with 500 rooms, entertainment venues, bars, and restaurants. In addition, one of the city’s requirements is that the casino and resort feature an “architecturally significant design”. When it becomes operational, the casino in Chicago should generate for the city almost $200 million in tax revenue each year.
The plan is to use those funds to boost fire and police pension funds.
Still, it’s not the size of the project that has deterred the potential bidders. Most of them balked at the proposed tax rate for the future operator. Currently, the gaming tax rate is set at 40%. Along with the almost $1 billion investment needed, this tax is the main reason why major players in the market are choosing to pass on the bid. According to reports, big Vegas operators, such as Ceasars, MGM International, Wynn Resorts, and Las Vegas Sands have all decided against bidding.
Some experts believe that for the casino to finally see the light of day, the city will have to substantially decrease the tax rate. However, this would require a new legislature. At the moment, that doesn’t seem likely. Even the original proposal was barely approved by the state legislators. On the other side, it’s understandable that the high tax is causing the operators to miss out on the Chicago casino. Most of the other opportunities come with a much lower tax rate.
In other states, it ranges from 10% to 20 %. In Nevada, the highest tax rate is only 6,75%.
Furthermore, the gambling market in this part of the country is already becoming crowded. A potential operator would face stiff competition not very far from Chicago. Not so long ago, Hard Rock opened a casino just across the border in Indiana. This is opposed to the business policies of most of these companies, who seek to obtain as big a share of the market as possible.
It remains to be seen if the new timeline will change anything. The main obstacles are still there and the city is facing an uphill battle in finding a suitable partner for the project.
Source: Big Vegas Gaming Operators Decline to Bet on a Chicago Casino From News.wttw.com On August 25, 2021