Chicago forced into extending deadline for casino applications
Mayor Lori E. Lightfoot confirmed that the City of Chicago has extended the deadline to respond to the casino Request for Proposal (RFP) to Friday, October 29. This extension gives potential bidders more time to fully assess the Chicago casino opportunity; conduct additional due diligence; assemble more competitive bid packages; and explore financing opportunities.
“This historic casino project stands to expand the economic vibrancy and strength of our city by bringing sustainable, good-paying jobs to residents from underrepresented backgrounds and creating a world-class casino-resort that attracts visitors from all over,” said Mayor Lightfoot. “Extending the deadline for interested bidders will allow the City to collect as many robust, impactful and transformative proposals as possible. I look forward to seeing these bids roll in and working very closely with whichever team is ultimately chosen to develop Chicago’s first-ever casino.”
The Chicago casino project is currently one of the most attractive casino-resort development opportunities in the country. A global gateway city with 9.5 million area residents, Chicago welcomed 60 million domestic and 1.5 million international visitors in 2019. The potential gaming operator will have the opportunity to incorporate its property into the City’s vibrant cultural scene, robust public transit infrastructure, and highly diversified economy.
Union Gaming Analytics had warned previously that Illinois’ gaming laws would likely price casino groups out of competing in the race to operate in Chicago according to a feasibility carried out by .
The report said that the “onerous” tax and fee structure will make it difficult, if not impossible, to attract investors as they won’t might not make a profit for a decade.
To operate a casino, investor would need to pay a $250,000 application fee upfront, a $15m ‘reconciliation’ fee when the license is issued and up to $120m in gambling position fees. They would then be subject to an additional 33.3 per cent ‘privilege tax’ on top of an existing tax structure paid by all Illinois casinos.
Union gaming stated: “The reconciliation fee alone would wipe out any profits generated for many years, if not decades under the [Adjusted Gross Receipts] tax structure. The return on investment profile for all five sites is subpar, if not negative over the five years projected herein. The reconciliation fee not only magnifies the lack of feasibility, it also shuts the door on the ability of the developer to obtain financing.”
In a survey, the largest percentage of respondents, 36 per cent, said the best location for the Chicago casino was near downtown.
Survey participants were also asked the most important factors in selecting a site for a casino, and what amenities they would like to see built with a casino. Restaurants came in first at 58 per cent, followed by theatre/live entertainment at 51 per cent, and a hotel at 41 per cent.
The expansion also allows for six additional casinos in Illinois, located in Chicago, Danville, Waukegan, Rockford, south suburban Cook County and Williamson County in southern Illinois.
Source: G3 Newswire