* Jennifer Shea at the Bond Buyer…
When casino developers were clamoring to run Chicago’s first casino, then-Mayor Lori Lightfoot’s administration all but promised a windfall. City leaders predicted a “material improvement to revenues” from the Chicago casino, the result of 2019 legislation that grew Illinois gambling by nearly 50%.
And when Rhode Island-based Bally’s Corporation won the coveted casino license, Bally’s CEO Soo Kim estimated the finished River West casino would generate $200 million per year in tax revenue, with $50 million per year flowing from the temporary location opened on Wabash Ave. in the meantime.
The city did not budget for any revenue from the casino in 2023. But current Mayor Brandon Johnson’s 2024 budget plans for $35 million in local tax revenue from the casino. To meet that target, the temporary casino – now located in the Medinah Temple, right off the Magnificent Mile and just north of the Chicago River – would have to bring in roughly $2.916 million per month.
Since the venue opened Sept. 9, the temporary casino has brought in between $694,913 and $778,964 per month in local tax revenue, according to Illinois Gaming Board data — about a quarter of what it needs to generate to keep up with budget projections, and a fifth of Kim’s more ambitious target.
* According to Illinois Gaming Board data, in November alone, video gaming machines produced $186,224 in tax revenue for Decatur, which was one of the highest in the state.
Chicago is about 38.5 times as large as Decatur. So, if Chicago had video poker machines, it had the possible potential of raking in almost $7.2 million in taxes during November.
* Joliet, which has two full-blown casinos in the area, pulled in $135,116 from video gaming taxes that same month.
Chicago’s population is almost 18 times that of Joliet. Extrapolating that out, Chicago could be expected to reap as much as $2.43 million in taxes from casinos in November.
Figure it’s somewhere in between. If so, that would likely cover the city’s budget for the coming year.
That somewhere-in-between number might possibly still be lower than the projections for Chicago’s temporary casino and would be much lower than the projections for the permanent casino site. However, are those Chicago projections realistic?
Well, Joliet’s two casinos generated $980.097 in tax revenues during November. Extrapolated out, that could be $17,641,738 for Chicago, or something like $212 million for the year, which is about what Bally’s projected.
* But, so far, Chicago is just sputtering along. And this is from the Civic Federation in October…
The Civic Federation has long had concerns over the City of Chicago’s proposed reliance on casino revenues as a major funding source for its Police and Firefighter Pension Funds. While a casino may generate some budgetary relief, gaming revenues can be unreliable, particularly over the long run, and should be budgeted with caution. Further, the State of Illinois currently has 15 casinos and thousands of video gaming locations. With six additional casinos enabled by the 2019 gaming expansion including the Chicago casino, the legalization of sports gambling and a growing number of video gaming locations, not to mention nearby casinos in neighboring states, there is greater potential for market saturation.
As noted, that money is supposed to shore up the first responder pension funds. If that doesn’t happen, the General Assembly could be asked to step in yet again.
* Back to the Bond Buyer…
This comes against the backdrop of a national slowdown in the growth of the gambling industry over the past five years, according to Gros. Georgia and Texas are now the only big states without casinos, he said, and growth at the others has been “incremental” and driven by a preoccupation with tax revenues rather than sustainability.
* The added bonus to local video gaming machines is that the drinking establishments are mostly (not all) locally owned.
I don’t gamble, I don’t encourage gambling and I don’t have any financial interest in casinos or video poker or anything else like that. But the bottom line here is that the city has left a ton of tax revenue on the table since video gaming was legalized in 2009. And it might have done better than an actual casino going forward. I guess we’re going to find out.
- Really - Wednesday, Dec 20, 23 @ 12:27 pm:
Three decades too late for the license. At least Chicago didn’t want the license for much of that time. Communities like Danville that were inexplicably passed over in the early 1990’s really got the shaft.
- SKI - Wednesday, Dec 20, 23 @ 12:31 pm:
I keep forgetting that Chicago has a casino & I don’t remember seeing ads for it the last few times I’ve been up there. Wonder what their foot traffic has been like.
- McGuppin - Wednesday, Dec 20, 23 @ 12:36 pm:
For the temporary casino to succeed (and lead to strong tax revenue), the neighborhood needs to succeed. The Mayor and the City Council surely understand this. Right????
- Anon324 - Wednesday, Dec 20, 23 @ 12:39 pm:
I don’t know if it’s just a space issue or what, but from a demographics standpoint, the lack of a sportsbook in that part of the city seems to be an odd choice.
- Henry - Wednesday, Dec 20, 23 @ 12:45 pm:
I will not walk into a casino in downtown Chicago with a wad of cash or walk out of same casino with a wad of cash. If you think this is not on the minds of people you are mistaken. Target rich environment.
- Jose Abreu's Next Homer - Wednesday, Dec 20, 23 @ 12:48 pm:
I’ve been to this casino once after dinner. Stayed about 20 mins, didn’t play any games. Just not an impressive layout and the “restaurants” seem thrown together on a whim (I know it’s temporary). Not sure the appear of a sportsbook when everyone can just play on their phones. I went to the Cubs sportsbook during the All Star break and it was dead (not a lot of sports that day but I wanted to checkout the space). At the time they were not taking bets, told me to download the app. Nice TVs in the place though.
- Annon'in - Wednesday, Dec 20, 23 @ 12:54 pm:
Unlikely the author of the Bod Buyer opus actually stepped into the facility, While the exterior of Medinah Temple is “iconic” ( an overused term) the interior seems to have the utilized the same decorator services as the folks who do the storage shed complexes. Less than snazzy. Table games seem understaffed and onverpriced — $15 min. bet before 10 a.m.is a bit much. Mr/Ms Henry will be comforted to know the site has a battalion of ever alert, fully armed Deputy Sheriffs at the ready to help avoid the local mopes. Walker’s Bluff is much nicer.
- DuPage Saint - Wednesday, Dec 20, 23 @ 1:00 pm:
There are only so many people that gamble and now so many places to do it. The market is saturated. Heck if you want to bet you can do it on your phone. Why get into a car and drive to a casino? This is not the 1960s where supposedly everyone dressed up and it was glamorous. City missed boat by a couple of decades
- Just Me 2 - Wednesday, Dec 20, 23 @ 1:10 pm:
How does this compare to other casinos when they first open?
- Hank Sauer - Wednesday, Dec 20, 23 @ 1:10 pm:
No surprise,
- Mary - Wednesday, Dec 20, 23 @ 1:12 pm:
River North has seen rising crime in the form of local drug dealing, theft, etc., and no-one cares. (And ignore the City of Chicago stats-I reported a crime in River North, and got kicked out of their system twice as a non-report on the grounds that I did not give them “enough details”–despite telling them I had video of the incident). Also, parking around the Temple is awful to non-existent and expensive. Would be curious to know their data on foot traffic actually entering the building.
- Rich Miller - Wednesday, Dec 20, 23 @ 1:12 pm:
===How does this compare to other===
They usually start off with a bang and then taper off as the newness fades.
- TheInvisibleMan - Wednesday, Dec 20, 23 @ 1:31 pm:
“Extrapolating that out”
I’m not sure that’s an accurate extrapolation, using just population numbers.
As DuPage Saint points out, there are only so many people who are gambling at a casino. Will County shares much of its border with Cook County/Chicago. It’s not a county on the other side of the state with an independent population. There will be cannibalism of the Will County/Joliet gambling numbers, and for a similar reason the total collected for Chicago will be smaller than projected.
—driven by a preoccupation with tax revenues rather than sustainability.—
Personally, I think this is what damages communities more than the actual gambling. Gambling just makes a good scapegoat for the poor local decisions. From the municipality point of view, ever increasing tax revenue from continually saturating the local area with gambling machines might lead to a brief increase in collections, but with each additional license the profit to each individual business goes down - leading to a race to the bottom of the overall profitability of local businesses.
- Dotnonymous x - Wednesday, Dec 20, 23 @ 1:40 pm:
Decatur…The City of Slots.
- Dotnonymous x - Wednesday, Dec 20, 23 @ 1:42 pm:
Gaming?…if it was just a game, I want my money back.
- Dotnonymous x - Wednesday, Dec 20, 23 @ 1:46 pm:
- I don’t gamble -
That does not surprise me.
- Rich Miller - Wednesday, Dec 20, 23 @ 1:46 pm:
===I’m not sure that’s an accurate extrapolation===
Hence the Civic Federation statement.
- Rich Miller - Wednesday, Dec 20, 23 @ 1:53 pm:
===That does not surprise me.===
I should note that I have gambled, but never much. Mainly, low stakes poker in Vegas, but the last time was probably almost a decade ago. I set my max loss amount and then considered it entertainment. The longer I could play, the more entertaining it was. Then I’d get up and leave.
I’ve very occasionally played video poker, but only in a few casinos. I actually enjoy the casino vibe, but I don’t like giving casinos my money.
- Dotnonymous x - Wednesday, Dec 20, 23 @ 2:05 pm:
I don’t consider playing poker gambling…but yeah…I like one sure thing over a thousand random chances.
- Dotnonymous x - Wednesday, Dec 20, 23 @ 2:12 pm:
Poker is a game of wits…and perception.
- Support Main Street - Wednesday, Dec 20, 23 @ 2:19 pm:
* The added bonus to local video gaming machines is that the drinking establishments are mostly (not all) locally owned.
This is a very significant detail. Video Gaming is a uniquely Illinois industry. Unlike the profits from casinos and sports betting that leave the state, the “house” in video gaming (the host tavern and terminal operator) are IL businesses. The dollars they receive stay local and are recirculated within the local economy.
- LastModDemStanding - Wednesday, Dec 20, 23 @ 2:28 pm:
I’m no expert, but from my experience around the US (and abroad), the draw of the successful casinos is an entire walkable entertainment venue with shows, restaurants, nightclubs, decor, etc., not just a one-off place to gamble. I think if thats what the River West casino plans to be, there will be more success than this random one off corner building in River North.
- Dotnonymous x - Wednesday, Dec 20, 23 @ 2:29 pm:
Booze and gambling go together… like bread and bankruptcy.
- levivotedforjudy - Wednesday, Dec 20, 23 @ 2:39 pm:
It reeks of being temporary. Iffy restaurant/bar offerings, no entertainment (probably not until the real one opens) and they don’t really advertise. I don’t think I have ever seen an ad. Put that in a stew and you get a small pot of revenue.
- Anyone Remember - Wednesday, Dec 20, 23 @ 2:51 pm:
[Classic movie font on] Apparently John Nance and Nicky Santoro are doing too good a job at the skim?
- 47th Ward - Wednesday, Dec 20, 23 @ 3:32 pm:
OK, OK, I haven’t been there yet. That partially explains the lower than expected revenue. As a slot jockey, my mission in life is to improve the casino’s take and I have been remiss. Eventually I’ll make an appearance and rest assured, the police and fire pensions will see a notable boost.