It shouldn’t be long before Chicago unveils its request for proposals to build a casino resort in the nation’s third-largest metropolitan area.
It was in early March that Chicago Mayor Lori Lightfoot announced that an RFP is coming for a single resort that is expected to include hotel, dining, entertainment and convention amenities.
Several companies, including some based in Las Vegas, are no doubt looking at the opportunities Chicago presents and in the months ahead will be weighing whether being the only casino in town in an area with more than 9.5 million residents and tons of transportation options to get there is worth the steep price of admission — mainly the effective 40 percent gaming tax rate.
The tax rate for the proposed resort used to be even higher, but the Illinois Legislature last year approved measures that reduced it to a more palatable rate. For those who question why any company would be interested, remember that Chicago essentially is providing a monopoly for one company to partner with the city.
Chicago attracted nearly 60 million domestic visitors, including 47 million leisure travelers and 13 million business travelers in 2019. The city’s two major airports have more than 130 combined daily nonstop flights from New York City, San Francisco and Washington, D.C.
What gaming companies may be interested in Chicago? A glance at the history of the evolution of the RFP process provides some clues.
Chicago distributed a 17-page “request for information” to better define its RFP process. Eleven companies — four of them gaming companies — responded and offered suggestions to a series of nine questions the city posed.
Questions addressed possible locations for the resort, suggestions on the minimum and maximum number of hotel rooms and square footage for amenities, whether the COVID-19 pandemic would affect the development of a Chicago casino and whether a temporary casino should be allowed while the full resort is being built.
One would have to think the four casino companies that submitted responses could be interested in responding to the RFP. Responding companies included Las Vegas-based Wynn Resorts Ltd. and MGM Resorts International, Florida’s Hard Rock International and Chicago-based Rush Street Gaming.
With the gaming companies, four real estate developers, a casino feasibility consultant and a casino financier — MGM’s affiliated MGM Growth Properties REIT — and a neighborhood organization submitted their ideas.
It would seem likely that those four casino companies could submit an RFP proposal.
Wynn Resorts, which stated publicly that “when a city of significance decides to consider a gaming resort, we are always interested in exploring the opportunity,” has a track record of developing stunning resorts and the recent experience of doing so in an urban setting with Encore Boston Harbor.
MGM also provides quality developments and has done so successfully in downtown Detroit, downtown Springfield, Massachusetts, and near Washington, D.C.
Hard Rock, affiliated with Florida’s Seminole Indian Tribe, has hotels worldwide and casino resorts in Atlantic City and Biloxi, Mississippi.
There are frequent reports of Hard Rock trying to establish a foothold in Las Vegas.
Rush Street, headed by billionaire Neil Bluhm, has somewhat of a home-field advantage with a familiarity of the Chicago landscape. The company has developed casino properties in Philadelphia, Pittsburgh, Des Plaines, Illinois, and Schenectady, New York, under the Rivers Casino brand.
Those companies seem like sure bets to have an interest in Chicago, but there are others that could take a serious look.
Las Vegas Sands Corp., which has the development of convention facilities and affiliated resorts down to a science, has successfully operated properties in Las Vegas, Macao and Singapore. While the company’s focus has been on Texas most recently, there could be some interest in Chicago with prospects in Texas fading in the state’s political environment.
It wouldn’t be surprising to see Las Vegas’ newest casino operator, Mohegan Gaming and Entertainment at Virgin Hotels Las Vegas, take a serious look at Chicago. The company has quality resorts, an international presence in Canada and soon in South Korea and is growing.
Would the Genting Group, which operates in New York, have the capacity for another resort after opening Resorts World Las Vegas this year?
Don’t put it past regional gaming giants Boyd Gaming Corp. and Penn National Gaming to kick the Chicago tires or for Tilman Fertitta’s Landry’s Inc. to look at expanding the Golden Nugget empire from Las Vegas, Laughlin, Atlantic City, Biloxi and Lake Charles, Louisiana.
One company that probably wouldn’t be interested in Chicago, according to Las Vegas-based Union Gaming analyst Grant Govertsen, is Caesars Entertainment Inc.
Govertsen, who wrote a white paper on the Chicago proposal last year, said Caesars is well-established in Illinois and Indiana markets close to Chicago and could have a difficult time maneuvering through regulatory concerns that could arise with that saturation.
But could Caesars divest properties and make a run at Chicago? Of course it could.
Especially with the opportunity the Windy City represents.