Chicago to Propose a Casino Resort in the City
Legislation passed back in 2019 is finally going to make all of Chicago mayor Lori Lightfoot’s dreams come true.
In just a couple of weeks, Chicago is going to issue an RFP (Request for Proposals) for a downtown IR (Integrated Resort) that will include a first for the City of the Broad Shoulders – a Las Vegas-quality casino.
Mega-casino operators including Wynn Resorts, Hard Rock International, and MGM Resorts have each shown some initial interest.
So has Rush Street Gaming, which owns the Rivers Casino brand with gaming operations in Pittsburgh, Philadelphia, Schenectady, and Des Plaines, Illinois, and is headquartered in Chicago, Illinois.
Long Time Coming
The Illinois legislature approved the idea of a casino in Chicago back in 2019 when it established the Illinois Gambling Act, but the pandemic kept the city from capitalizing on that legislation in 2020.
Which is just as well. The original law was overloaded with taxes that an independent analysis warned the state that casino operators could hardly be expected to build a business that had no chance of becoming profitable under such a high tax rate.
How high? If that dollar in your pocket were taxed according to the original Illinois bill, you’d have 28 cents. Buy yourself something pretty.
In any case, the Illinois legislature came to its senses in June of 2020 , passing a bill (which Governor J.B. Pritzer promptly signed) that would lower that gobsmacking 72% effective tax rate for the proposed Chicago casino to a slightly less gobsmacking 40%.
Of the slow grind to realize the project, Bloomberg reports that Mayor Lightfoot said: “This is taking too long. I’m an impatient person by nature.”
Why the impatience?
Government on Tilt
In December 2019 – the same month the Illinois Gambling act was signed into law – Gov. Pritzker approved legislation that unified more than 600 Illinois police and fire department pension funds, many of which were underfunded and some perilously close to insolvency.
At the time, Chicago Mayor Lori Lightfoot was out lobbying editorial boards throughout Illinois in support of the consolidation. When the unifying legislation was finally passed, however, Chicago was left out.
It’s no great mystery why. The 600+ Illinois cities that had their pension fund consolidated owed a combined $11 billion to those funds.
The city of Chicago, on the other hand, owed nearly three times that amount ($32 billion) to its four civic pension funds, including those of first responders like police officers and firefighters, but also those of municipal employees and laborers.
Those sobering numbers make it a bit easier to understand that panicked look in Mayor Lightfoot’s eyes whenever she talks about the casino project.
But would even half a billion dollars a year make that big a dent in Chicago’s pension fund crisis?
Some of that tax revenue is earmarked for criminal justice improvements in the city, too.
The Chicago Way
Speaking of problems with crime, in January 2021, Chicago recorded 51 homicides, which is slightly more than double what New York City tallied for the same period (25 murders). Despite that Chicago’s population of 2.7 million is dwarfed by the Big Apple’s 8.4 million residents.
Even Los Angeles, California, with its population of 3.9 million, managed only 39 homicides in January.
Also contributing to Chicago’s reputation are its more than 100,000 gang members in an estimated 70 different gangs, themselves divided into as many as 700 differing factions.
According to a Wikipedia entry, in 2011 those gangs were responsible for more than 60% of Chicago homicides.
The Best We Can Hope For
Whether a casino can make money in Chicago is not in question. Of course it can. Las Vegas, Macau, Reno, Biloxi; all these destination cities are hosts to multitudes of profitable gambling businesses.
But even $500 million can only be stretched so far, and that is assuming the tax revenue will be used for what it is intended for.
You know, like all that money Chicago collected to pay for their police and firemen pensions.