The new gambling expansion law approved in Illinois includes the construction of six new casinos across the state, including one in Chicago. Where that casino will be located remains undecided at this point, but speculation is already underway.
The site and time-to-completion of the new Chicago casino remain shrouded in mystery at this early stage. There are also four, maybe five, potential landing sites reportedly under consideration, with one early frontrunner.
Illinois took its sweet time but finally awarded a contract for a feasibility study to determine whether Chicago can construct a full-scale casino resort. Las Vegas-based Union Gaming Analytics was awarded the contract and has three months to deliver its findings to Chicago Mayor Lori Lightfoot and Illinois Governor J.B. Pritzker.
Pritzker is not a fan of a downtown casino, preferring an area that “has been left out.” The problem is that studies have found this rarely benefits either the host city or the casino.
Three locations that stand out in particular include the former U.S. Steel South Works location on the far west side of the city, the site of the former Michael Reese Hospital on the south side, and the Port Authority just off the Indiana border.
The Case for a Downtown Chicago Casino
While Pritzker would disagree, another suggested location is in the heart of the city. Ed Zotti of the Chicago Sun-Times believes the best place for the casino is at Michigan Avenue and Lake Street, just a short walk from Millennium Park.
A casino right there would have an excellent setting between the Chicago Riverwalk and Millennium Park in the heart of the theater district as well. There may not be a site anywhere else in the city for foot traffic, which is always a welcome sight for casino operators.
Zotti spoke with gaming and hospitality experts Steven Gallaway and Andrew Klebanow, who co-authored a whitepaper titled “Casinos and the City,” and drew two conclusions:
- You cannot use casinos effectively as a revitalization tool for a neighborhood.
- The best way to ensure a casino actually benefits a city, is to put it in the heart of a hot entertainment district.
The whitepaper also concluded there are two predominant methods of building a casino: the island model and the London model.
The island model places a miniature entertainment village out “on an island.” A destination for visitors to drive to, spend the day or night, and drive home. Zotti notes, “patrons never set foot in the surrounding neighborhood and might as well have been visiting Madagascar.”
Authors Gallaway and Klebanow found that the majority of the casinos in the US are designed this way.
The London model highlights London’s West End, one of the premier entertainment districts on the planet. Nearby Leicester Square is never empty and enjoys some of the most active street life in the world.
The London model, ironically, was first implemented on accident in Chicago when Wrigley Field was erected in the middle of a neighborhood. It only took 100 years, but the Wrigley scene has never been livelier, or more seamlessly integrated into the fabric of the city.
The silver lining for Chicago is that even if the city ends up placing the casino in the middle of nowhere, Wrigley Field should soon be featuring a sportsbook of its own.
Some have estimated that it may be two years before the Chicago casino is up and running. While we wait, let’s evaluate three options that have been mentioned.
Former U.S. Steel South Works
I’m not sure how the US Steel site ever was mentioned as a potential location. Situated miles from any other entertainment, this site is possibly the worst choice Illinois could make for the Chicago casino. This location would be difficult to access and out of the way.
Ultimately, the complete void of anything to do in the surrounding area makes this location a tough choice for just about any casino developer to seriously consider.
Old Michael Reese Hospital
The Michael Reese Hospital location is less than ideal but much better than the previous site. The problem is that it’s set just one mile south of McCormick Place, which is seen as an issue by some, including Governor Pritzker.
The upside of this location is that it helps to connect the south side of the city into a more cohesive unit of neighborhoods. As you travel down the shore of Lake Michigan, you pass multiple world-class museums. You then hit Soldier Field, home of the Chicago Bears and host of many events throughout the year. McCormick Place follows shortly after.
Just to the west of McCormick Place is Chinatown, and 1.5 miles south of that and accessible by Metra train is Guaranteed Rate Field, home of the White Sox.
While casinos “on an island” aren’t reliable neighborhood builders, if one were to bridge the gap between multiple entertainment centers, a new social hub could be created.
International Port District
One other option that has been mentioned is even further south down the coast of Lake Michigan at the Port Authority, just west of the Indiana border. This location would be uncomfortably close to the existing Hammond Casino and does not seem particularly attractive.
The Mayor of Chicago, Lori Lightfoot, has remained silent on the subject of where the Chicago casino should be located, saying “I’m not going to get into speculation about where it should be. A lot of that is also going to be dictated by what we see in the results of the feasibility study. So we’ll stay tuned on that issue.”
While some have suggested that it may take two to three years before a casino will be up and running in Chicago, Lightfoot disagreed with that notion saying “No, I don’t think so. I think we’re very purposeful and intentional about putting in very tight timelines so that we can get a feasibility study back in a short period of time. And then, if we need to make adjustments in the legislation, then we’ll be primed to do that during the veto session this fall.”
The Early Favorite
The early favorite is thought to be the Michael Reese Hospital location, despite its proximity to McCormick Place. According to a Chicago Sun-Times real estate expert, the proximity to downtown, comfortable transportation to and from, and ample room to spread out make this location ideal.
“It’s not just the casino itself. It’s the entire ring of what happens around it, and that has to be part of the planning.”
Vegas Heavyweights Sitting on the Sidelines?
According to Casino-Review.co, many of the major players in Las Vegas are either sitting on the sidelines or have actively said they are not interested in Chicago.
MGM is already tapped out after investing $960 million in a Massachusetts resort casino. Las Vegas Sands is publicly uninterested, and Penn National’s CEO is apprehensive saying, “An already saturated market is going to get a lot more supply. It’s going to make the Chicago casino a very difficult investment to make.”
The Chicago market provides a massive opportunity for investors, but a high cost of entry and annual exorbitant tax rates have a way of tempering enthusiasm.
An online sports betting license will cost $20 million upfront. After that, a five percent tax rate is taken from gross revenue, with a cap at $10 million. That is on top of a tax on total gaming revenue at 15 percent, about three times the Las Vegas rate.
Locations of Illinois Casinos
Beyond just the new Chicago casino, five more will be built across the state as part of the new gaming expansion. The six new casinos set to be open in Illinois will span as far north as Waukegan and as far south as Williamson County.
- South Suburbs