Mayor Lori Lightfoot may be closing in on a big win on her bet that Chicago remains a viable market for a proposed huge gambling casino despite COVID-19 and high taxes.
A source close to the matter says the city expects to receive as many five formal bids for the Chicago operation by the Oct. 29 deadline, with three certain and another awaiting only some final steps to secure financing.
The bids reportedly will include at least one from a publicly traded firm and one from a private group. No Indian tribe now is expected to compete, nor is a Chinese firm that insiders say had expressed some interest.
Though City Hall sources would not name any names, one of the bidders is expected to be a partnership of Neil Bluhm’s Rush Street Gaming and Related Midwest, with the casino, if awarded by the city, to go on Related’s “The 78” development at Roosevelt Road and Clark Street.
The Bluhm offer long as been perceived as the front-runner, if only because of the Chicago casino mogul’s local economic and political ties. But Bluhm has said he hasn’t decided whether to bid, referring to a 40 percent tax rate on Chicago casino revenue that could be too rich to warrant an investment of hundreds of millions of dollars.
Bluhm recently canceled plans for a proposed casino in north suburban Waukegan, sparking speculation that he intends to focus on the Chicago bid. Rush Street Gaming CEO Greg Carlin said in a statement that the Waukegan decision is “not connected” to anything happening in Chicago. “So much has changed since we originally submitted the bid on Waukegan, and it no longer makes sense for us.”
One location some insiders say is being eyed for a potential casino is Tribune-owned property at Chicago Avenue and Halsted Street. Ald. Brian Hopkins, 2nd, said he’s heard that chatter, but says no one has come to him with a proposal, perhaps because, for legal reasons, he is not accepting calls from casino lobbyists until actual bids are filed.
A lively competition of three or more serious bidders would boost odds that Lightfoot will get what she wants: creation of a casino-based entertainment district, likely in the central area of the city, that would include not only gambling, but shopping, dining, hotel space and more. If Bluhm won nonetheless, it would tend to disprove chatter that he had an inside track.
Getting viable, multiple casino bids has been an uphill struggle for Lightfoot. The original casino bill approved by the Illinois Legislature was almost universally panned in the gaming industry, with even an outside analysis saying its 70 percent tax rate likely would make any project economically unviable. The rate was later changed by the Legislature to 40 percent at Lightfoot’s request, but then COVID hit, raising questions about if and when Americans would return to large, crowded venues.
Four groups responded to the city’s initial request for information, but two of them shortly thereafter, MGM and Wynn, said they would not bid, leaving only the Bluhm/Related group and possibly Hard Rock. In response, the city extended the bid-response date from August to the end of this month, saying the additional time would give other potentially interested bidders the opportunity to jump in.
If that indeed now happens, the short delay will have been worth it.
The city’s tax proceeds from the casino are allotted to paying off old debt in the city’s police pension fund. The city next year will begin paying the amount actuaries say is needed to bring the fund to full funding by 2035, but the cost has been passed on to landowners in the form of sharply higher property taxes.