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Illinois lawmakers are likely to rewrite their new statute authorizing a Chicago casino after a feasibility study released last week concluded that no city casino could make much profit due to mandatory taxes and fees gobbling up 72% of its revenue.

That's good news in the short-term for the Northwest Indiana casinos in Hammond, East Chicago, Gary and Michigan City because the Illinois General Assembly is not scheduled to meet again until October, and may not reach an agreement on a new Chicago casino tax structure until January — pushing the construction and opening of a Chicago casino even further into the future.

At the same time, the Union Gaming Analytics study determined that, absent "the highest effective gaming tax and fee structure in the U.S.," a Chicago casino quickly would become the dominant casino in the market, which includes Northwest Indiana. The Chicago facility could take a big bite of Region casino revenue, which supports thousands of jobs and numerous state and local government programs and services.

Here are five takeaways from the feasibility study to keep an eye on as Illinois and Chicago officials continue working toward a financially viable city casino plan.

Cannibalization: The study projects that if a Chicago casino opens for business in 2023, up to $260 million a year in adjusted gross receipts (AGR) would be "repatriated" to Illinois from Northwest Indiana casinos in 2024, due to Illinois gamblers staying home and placing bets in Illinois.

That would reduce the annual AGR at Region casinos by about 25%. The study did not identify which Region casinos would see their revenue hit hardest by a Chicago casino. New Indiana facilities and player loyalty programs could stem some of the losses.

Competition: In addition to authorizing a Chicago casino, Illinois' Senate Bill 690 opens the door to a new casino and a new horse racing track with slots in the south suburbs. It also expands the number of slots allowed at the state's existing casinos and bars, and permits a new casino in Waukegan and slots at Arlington International Racecourse and Hawthorne Racecourse.

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The study found that the myriad extra gambling options throughout Chicagoland "will generally have an adverse impact on potential gaming revenues for a casino in the city of Chicago" because all the facilities will be competing for the same customers.

Capacity: Despite the abundance of existing gaming options in Illinois and Northwest Indiana, the study found just 0.6% of Chicagoland income is spent on gambling, compared to 1% that's typical elsewhere: "This suggests there is significant upside potential in terms of total gaming revenue that can be supported by the Chicago metro area as supply is added throughout the market."

However, the study noted that most of the existing and proposed casino sites are concentrated south and west of downtown Chicago, making a centrally located or north side casino a better bet from a revenue perspective.

Convenience: Aside from Las Vegas, people tend to gamble at the casino that is most convenient to them, especially in a saturated market, according to the study. In that regard, the five Chicago casino sites suggested by Mayor Lori Lightfoot are sub-optimal because they generally will be difficult for most gamblers to get to.

Likewise, the study said tourists and high value players are unlikely to stay at or visit a casino hotel that's located far from downtown amenities, or in an area that's perceived as unsafe; qualities and concerns that make each of the five Chicago casino sites less than ideal.

Cost: An urban, resort-style casino that recently opened in central Boston, with slightly fewer gaming positions than the casino envisioned for Chicago, cost its developer, Wynn Resorts, a whopping $2.6 billion. Wynn projects that within three years it will annually take in $1 billion in revenue and $275 million in earnings before interest, tax, depreciation and amortization (EBITDA).

The Chicago casino study said similar returns are possible in the Windy City, but only if the casino is located in an area "that is less penetrated with existing and future casino venues than the areas to the south of Chicago," and the casino tax structure enables an EBITDA margin close to the regional casino average of 23%.

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