Study Says Chicago Casino Would Not Be Profitable
"If you build it, they will come" might work for a baseball diamond in a cornfield, but apparently not for a Chicago-based casino, according to a consultant.
There's been a whole lot of casino talk around this area recently, ever since gambling in Chicago was authorized this year by the General Assembly. Everybody wants to get in on the potential windfall that they hope a casino will bring to local economies.
Chicago is no different, but the projections for profit may be throwing some cold water on the concept.
Union Gaming Analytics has been engaged by the Illinois Gaming Board "to perform an independent financial feasibility analysis of a casino in the City of Chicago based on five potential casino sites selected for the study by the City of Chicago."
The five sites selected for the study by the City of Chicago are as follows:
1. Harborside Illinois Port Authority Golf Course (111th St. and Bishop Ford Freeway)
2. Former Michael Reese Hospital (31st St. and Cottage Grove Ave.)
3. Pershing Road and State St. (former Robert Taylor Homes)
4. Roosevelt Rd. and Kostner Ave.
5. Former U.S. Steel Plant (80th St. and Lake Shore Dr.)
Keeping in mind that a Chicago casino operator would have to pay a $250,000 application fee upfront, a $15 million "reconciliation" fee when the license is issued and up to $120 million in gambling position fees, the study has determined that there's just not going to be enough profit in the venture.
The study by Union Gaming Analytics released Tuesday concludes that Illinois casino tax and fee structures are too "onerous" to allow a developer to make more than 1% or 2% profit. The study found a Chicago casino would bring $260 million in revenue back from Indiana.
It also estimates 500 slot machines could be deployed at Chicago O’Hare International Airport and Chicago Midway International Airport, and would pay out roughly $200 a day. At that rate, slot machines could make $37 million a year.
The Illinois Gaming Board has the authority to ask lawmakers in the next 90 days to change the terms for the Chicago site.