Illinois' gambit to embark on a wholesale expansion of gambling with five new casinos, including one in Chicago and one in the south suburbs, is being carefully watched by those with a stake in the success of Northwest Indiana's five casinos.
Hammond Mayor Thomas McDermott Jr. said he thinks a casino in the south suburbs would be more of a competitor for Horseshoe than a downtown Chicago casino. But anyone who wants to compete with the Hammond boat will have his work cut out for him.
"In reality, at the end of the day, even if we have a boat on the other side of the border, it will have to stack up against Horseshoe and that will not be easy to do," McDermott said.
Horseshoe is Indiana's gaming heavyweight, with its annual revenues of more than $500 million per year accounting for about one-fifth of the state's total gaming revenues.
Horseshoe generates more than $35 million in tax and revenue share for the city of Hammond, which has used the money to transform entire neighborhoods with new streets, sidewalks, sewers and even moderate-income housing.
The other Northwest Indiana casinos are Ameristar in East Chicago, Majestic Star I and Majestic Star II in Gary, and Blue Chip in Michigan City. In Illinois, Ford Heights has a powerful coalition working to land the south suburban gaming license.
South Shore Convention and Visitors Authority CEO Speros Batistatos agreed Horseshoe is well positioned to withstand any onslaught but said that is not the case with Northwest Indiana's other casinos.
He said the Four Winds Casino Resort, which opened in 2007 in New Buffalo, Mich., has demonstrated the effect cross-border gaming can have on Northwest Indiana's casinos.
However, Batistatos feels the real challenge to Northwest Indiana boats from Illinois would come from a downtown Chicago casino and not one in the south suburbs.
"You can say what you want about Hammond, East Chicago and Gary," Batistatos said. "But I don't know anyone that is going to drive to Ford Heights, even if you plop Caesar's Palace there."
Northwest Indiana casinos have been combating the competition from Michigan and Illinois with new facilities and improved amenities.
A new $130 million, 300-room hotel opened at Blue Chip in early 2009. Ameristar put $4.2 million into upgrading its hotel rooms this year, and Majestic Star undertook improvements to its gaming floor.
Two years ago, Horseshoe opened the doors on a new, 350,000-square-foot gaming facility at a cost of $500 million.
In recent months, Horseshoe general manager Dan Nita has confirmed he is seeking corporate approval to build a hotel for the casino.