The “City of Broad Shoulders” has started on its path to have craps, blackjack, and slots.
The deadline to submit Request for Proposals (RFPs) to construct a casino expected to include retail sports betting in downtown Chicago arrived last Friday. Five bids among three gaming companies were received by the city, which hopes to see the eventual winner open the doors to a new venue in 2025.
Two came from an expected source in Rush Street Gaming, which was co-founded by Chicago native Neil Bluhm and currently operates the biggest revenue-generating casino in Illinois — Rivers in Des Plaines, which is less than 20 miles from Chicago Mayor Lori Lightfoot’s offices in the Loop.
Two others were submitted by Bally’s, the casino formerly known as Twin River that has expanded its holdings at a notable pace following its rebranding to an iconic gaming name. Like Rush Street, Bally’s also operates a casino in the state. Bally’s Quad Cities is closer to Iowa than it is to Chicago, though, by its location in the northwest portion of Illinois.
The fifth bid came from Hard Rock, which offers the most Chicago intrigue considering its current holdings. The company run by Florida’s Seminole Tribe opened a casino earlier this year in Gary, Ind., less than 35 miles from downtown Chicago. It also is the furthest along among the six locations awarded a casino license in the 2019 gaming expansion bill, working toward construction of a venue in Rockford, 80 miles from Chicago.
Each bid touted a world-class gaming mecca, job opportunities focused on diversity and economic development, and expansive tax revenue for both the city of Chicago and the state of Illinois. While the physical downtown venue is the headline attraction of the bid, the hidden gem is the potential to install gaming positions at both of the city’s airports, O’Hare International and Midway International.
The stakes are significant, as the game to be the one who offers the games has begun.
Bally’s $1.6 billion bid would create flagship
Bally’s proposed casino locations are at The Chicago Tribune Publishing Center, located on the corner of Chicago Avenue and Halsted Street, and the McCormick Place Truck Marshaling Yard. https://t.co/ERpcGJs2Oy
— Gregory Pratt (@royalpratt) October 29, 2021
Though Bally’s currently has 15 properties nationwide, only its soon-to-open location of the former Tropicana in Las Vegas can compare with the scope of the Chicago market. Thus, it makes sense Bally’s has taken a “go big” approach with a bid it estimated at $1.6 billion that would make the downtown venue the company’s flagship property.
“Chicago is a dynamic, world-class city, which is why we are committing to make a $1.6 billion investment in establishing Bally’s Chicago as our flagship, and the only property in its class in the Chicagoland market,” said Soo Kim, Bally’s chairman, at the time of the bid submission. “This property will be built, owned, and operated by Chicagoans, with a focus on minority and women investors, contractors, suppliers, consultants, and employees. It will generate tax revenue, create good-paying jobs, and attract international, national, and local visitors for generations to come.”
Bally’s has staked out two potential locations for its casino, one being the former Chicago Tribune Publishing Center near the Noble Square and Goose Island neighborhoods on the Near Northwest side. The other is the McCormick Place Truck Marshaling Yard, which offers the potential to create an entertainment destination hub with Bronzeville, a predominantly African-American community in the South Loop.
Bally’s venue would be built in two phases, the first coming with a $1 billion price tag that includes 2,700 slot machines and 95 tables while retaining the potential for what it calls “significant expansion of gaming space.” It would also include a 100-suite luxury hotel, an outdoor music venue that seats between 500 and 1,000, green space, and dining options.
The second phase, which would begin when revenue benchmarks are achieved, would include ramping up to utilizing 4,000 gaming positions, a 400-room tower hotel with rooftop pool and bar, indoor entertainment venue with 3,000-seat capacity and the flexibility to be reconfigured as needed, an exhibition space of 20,000 square feet that would include a Chicago sports museum, and higher-end dining options.
Bally’s has also committed to a temporary casino while construction of the permanent one takes place, with the venue adjacent to the Tribune Publishing Center.
Is hometown Rush Street the favorite?
— Howard Stutz (@howardstutz) November 1, 2021
Being a known entity in the city of Chicago would have made Rush Street Gaming a formidable entity even with only one bid, but presenting two to the city does offer one clue of just how much this means to Bluhm. The fact Rush Street withdrew its joint bid with Churchill Downs for the Waukegan license at the 11th hour was a second. And throughout the winding process for the downtown license, Rivers will continue to generate a substantial percentage of the operator gaming revenue in Illinois as well as tax revenue for Illinois.
Additionally, Rivers has its tie-ins as the exclusive casino and sportsbook partner of the Chicago Bears. The storied NFL franchise is pondering a potential future in Arlington Heights following an agreement to purchase the land occupied by Arlington International Racecourse for $196.2 million from Churchill Downs Inc., which has a majority stake in the Des Plaines casino.
The agreement for the Bears to seek the Arlington Heights land parcel was partially fueled by the team’s inability to get the city’s Park District to commit to potential expansion to include a sportsbook at Soldier Field. The interconnectedness ensures a constant media presence for Rush Street and Rivers, which could potentially focus on the Rivers Chicago at McCormick bid centralized at the Lakeside Center convention space that is very close to the Bears current home of Soldier Field and near Bally’s proposed McCormick Place plans.
“Rush Street Gaming has developed six mixed-use casino projects from the ground up, on-time and on-budget in urban markets where gaming is legal,” Rush Street CEO Greg Carlin said in a statement. “We are involved in two bids at great sites with great partners because we are committed to the promise of Chicago’s future and we know we can create a world-class entertainment destination worthy of our hometown.”
Rush Street’s other proposed bid, Rivers 78 Gaming, would have a casino as part of an entertainment venue on a 62-acre tract of land at the intersection of Roosevelt Road and Clark Street on the near South Side between the Loop and Chinatown. Of the four known proposed venues, it is the one closest to the downtown commercial area and would be approximately one mile west of the Field Museum located on the Chicago lakefront.
Lightfoot has said Rush Street would not get any special consideration during the RFP process, calling it “wide open” during the summer. The company’s relationships built previously with city and state legislators, however, is something that cannot be discounted when the process kicks into higher gears in the coming months.
Can Hard Rock’s brand be a calling card?
— Joseph Slanted and Enchanted Pete (@nwi_jsp) October 31, 2021
On the surface, Hard Rock making a bid is puzzling considering that winning the license would give it three casinos within an 80-mile radius of downtown Chicago. Chief Executive Officer Jim Allen first started publicly hinting about submitting a bid during the Global Gaming Expo in Las Vegas last month, then practically confirmed it shortly before the deadline for proposals, as Hard Rock also wants to put a casino in the New York City area.
“We have northern Indiana, which is going well for us, and we are participating in a Chicago bid. And we have Rockford,” Allen said while speaking in Atlantic City last week. “I think the scope of downtown Chicago is certainly different from Indiana. We’re learning as we go through this, but there’s certainly enough population [in Chicago] to support it. My guess is we won’t win all three, so we’ll deal with that as it comes.”
Rockford Casino is weeks away from opening its temporary location in northern Illinois, where it will eventually vie for regional gaming dollars against a Ho-Chunk Casino slated to be built in Beloit just over the state line in Wisconsin. That location offers minimal, if any, competition for downtown dollars, given its distance from Chicago, but the Gary venue raises questions about potential revenue cannibalization.
In Hard Rock’s favor is Gary will no longer be drawing patrons as a new venue by 2025, should all the timelines for a downtown casino be met. In its short time of operation, Hard Rock Northern Indiana already has established itself as a top-tier revenue generator in the Northwest Indiana corridor.
In addition to Hard Rock, Horseshoe Hammond and Ameristar draw a notable portion of revenue from the Chicagoland area given the relatively short drive. The three casinos ranked in the top four for operator revenue among the Hoosier State’s gaming venues in September at a combined $78.5 million.
— John Brennan contributed to this report