Their plan is to make this expansion in order to put additional money from taxes into the state’s coffers.
Five Proposals; None Approved
The expansion started with the approval of legislation that was further signed by Governor JB Pritzker. The legislation allowed the building of six new casinos across the state, and one of these new buildings is planned to be in Chicago.
There are five possible sites which seem like good locations in Chicago for a land-based casino. The initial report suggested that they were all commissioned by the city and that Union Gaming provided them. However, the problem with all of them is that not a single one was approved. How so?
Among the five sites are a vacant lot located in Lawndale, a lot which is right next to the Harborside International Golf Center, and a lot next to Guaranteed Rate Field. Furthermore, two more options were suggested: a former steel factory located in the southern part of the city, and a former building of the Michael Reese Hospital, located in Bronzeville.
The Opposition and the Problems
All of the places that were suggested met with opposition. For example, a resident of Bronzeville, named Pat Dowel, stated that a casino was simply not the right choice for a building that had been a hospital. Dowel believes that the casino would destroy the character of the neighborhood, and that the casino itself would not maximize the benefit that the city would get.
The UG analysts also stated that the sites offered for the casino are not really practical due to a tax structure, which is “very onerous”. The General Assembly of the state actually implemented that type of structure in conjunction with the state’s approved expansion of gambling operations.
Furthermore, UG stated that they had analyzed the offered sites and provided their thoughts on the revenues that would come if the casino were built in a more tourist-friendly zone.
They added that casino projects in Chicago were financially unfeasible regardless of the location due to the regulatory construct which was active in the state that involved the highest effective gaming tax, as well as fee structure in the US.
Does Illinois Need An Entirely New Tax Structure?
The Mayor of Chicago, Lori Lightfoot, somewhat expected these results. She already stated that the current tax structure could be something that would break the deal. The fees that are required by the General Assembly were way too high for operators.
The application fee is $250,000. Furthermore, operators must also pay a $15 million reconciliation fee and make additional payments of up to $120 million once casinos start working.
In the end, the officials of Illinois will have to contemplate the problem further and come up with a better solution. They will have to come up with a different tax system that will introduce the casino in Chicago to the gambling world.
