New Casino In Chicago Could Bring In Billions In Revenue But It Will Be Costly

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New Casino In Chicago Could Bring In Billions In Revenue But It Will Be Costly

The City of Chicago has recently come out with the proposal for the first casino on its grounds. However, they’ve run into some trouble finding a partner who will develop the project. A number of potential developers see the whole endeavor as too costly to be worthwhile. Some of them have already backed away from the opportunity to build a first establishment of this kind in Chicago.

New Casino In Chicago Will Include Hotel And Conference Space

In April, the City of Chicago issued a request for a proposal for developing a mega resort within city limits. The future complex is to include a casino, hotel, and conference space, It will also include the entertainment district in the surrounding area. The proposal further details that the hotel should be on a five-star level and have 500 rooms. The project should also involve creating an “iconic outdoor public space” with shops, restaurants, museums. All of these should involve local brands and celebrate Chicago’s history and culture. This huge complex is supposed to be ready by 2025. The deadline for proposals is August 23rd. The public will have a chance to see and discuss the plans in late September.

Estimated Tax Revenue From A New Casino In Chicago In The Neighborhood Of $200 million

The initiative comes after numerous cities and states have already expanded their gambling capacities to boost the local economy. The city leaders are also keen to retain some of the money the Illinois gamblers are spending across the border, in Indiana. In addition, estimated tax revenue from a casino of this size would be in the neighborhood of $200 million. However, to fulfill all the city’s requirements, the potential investor would likely have to spend more than $1 billion. Some of the potential developers have already balked at this number. Besides the cost of development, the gambling operators who may step up and build the casino worry about the long-term profitability of the project.

Is The Market Already Overcrowded?

Illinois and Indiana already feature an overwhelming gambling offer. It’s possible that the market is already overcrowded. On top of that, Illinois gambling expansion from 2019 includes an effective tax rate. The original 70% rate was reduced to 40% but it’s still a big chunk of potential profit. Plus, the gambling expansion law requires the winning bidder to pay a $30,000 state fee for every slot machine and table seat before the start of the project. If the developer opts for a full 4,000 gaming positions capacity, this amount would go up to a staggering $120 million. The casino operator’s financial obligations don’t end here. They would also owe an additional payment calculated on the basis of gross revenue in the first three years. According to some analysis, this number could easily reach $480 million.

So, it’s understandable that some of the leading casino operators are wary about going into this kind of project. Four operators answered the city’s initial request for information last year. Two of them, MGM Resorts International and Wynn Resorts, both based in Las Vegas, have already decided not to submit their proposals. Florida’s Hard Rock International has released no information on its intentions. Chicago’s own Rush Street Gaming is the only one of the four who have reiterated their intention to develop the project. Still, the city leaders are confident that the megaproject will go ahead and that the Chicago market, even with all the fees, presents an unmatched opportunity for potential investors.

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New Casino In Chicago Could Bring In Billions In Revenue But It Will Be Costly
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New Casino In Chicago Could Bring In Billions In Revenue But It Will Be Costly
Illinois is home to some of the most profitable casinos in America, but a new casino that was recently proposed could make those look like small change.
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