(This is the third in a series of five articles that look at each proposed casino site for downtown Chicago. The previous installments explored Bally’s Bronzeville bid and Hard Rock’s bid.)
If past performance is indicative of future results, then Rush Street Gaming is a formidable player in the legal online casino space, in Illinois or elsewhere.
Whether you’re familiar with Rush Street’s Rivers- or SugarHouse-branded venues, there is no denying that Neil Bluhm’s company has established itself as a major casino entity outside Las Vegas in the United States. And at the age of 83, Bluhm has the opportunity to cement his legacy in his hometown, sweet home Chicago.
Rush Street Gaming is one of three companies — the others being Bally’s and Hard Rock International — that have presented five total proposals to the city of Chicago for its downtown casino license. If the process remains true to the projected timeline — no easy feat given the task of building a gaming venue in an urban metropolis — the casino would open by 2025 and be expected to generate between $160 and $200 million in annual taxes and fees that the city of Chicago would allocate to police and fire department pension funds.
Rush Street’s McCormick Place proposal is arguably the most compact of the five, with much of it centered around the repurposing of the Lakeside Center for casino gaming and refurbishing the 4,200-seat Arie Crown Theater located there. That smaller footprint may also help the permanent venue open ahead of the 2025 target date, allowing Rush Street to bypass constructing a temporary casino if this location is chosen.
Illinois currently has 10 casinos in operation, with Rivers Casino in Des Plaines the most recent casino to open in the state in 2011, and one Rush Street has a significant minority stake in after selling 62% to Churchill Downs Inc. in May 2019. It is the biggest gaming revenue generator for both its operator and the state. The downtown casino license was one of six created for the state as part of a massive gaming expansion bill signed into law by Gov. JB Pritzker in June 2019 that also legalized sports wagering.
Gaming positions and assorted amenities
With 5 serious proposals for a #ChicagoCasino, the competition would appear quite fierce. But insiders are already picking favorites. This piece gives the early edge to Neil Bluhm https://t.co/lbcLnutJNv
— CAC Watch List (@CACWatchList) November 22, 2021
Already having a presence in Illinois, it appears Rush Street’s allocation of gaming positions for this casino properly reflects the gaming trends it has helped foster in the state. Its proposal calls for 2,600 slot machines — notably fewer than the proposals from Bally’s (3,400) and Hard Rock (3,000).
Rush Street’s 190 table games, however, are more than the number proposed by either Bally’s (173) or Hard Rock (166). Rush Street envisions Lakeside Center having 480,000 square feet of gaming space, a more than 10-fold increase compared to its current Des Plaines configuration, which has an $87 million expansion set to open in early in 2022. With the downtown casino license allowing for up to 4,000 gaming positions, Rivers did not offer any clues in its proposal as to whether it would consider placing any at O’Hare and Midway airports, an option the licensee will have.
Rivers in Des Plaines has generated average revenue of $75.52 per admission at its table games in 2021 — nearly double the state average of $38.80. While some of that can be attributed to the inventory available — its 72 table games there are nearly double the next-closest venue (42 at Grand Victoria Casino) — that figure is a sizable portion of the state-leading overall $200.38 average per admission it has generated this year. Rivers is also the only casino in the state generating at least 20% of its revenue via table games.
Beyond the casino space, Rush Street’s proposal calls for 12 restaurants and cafes, including a food hall. Seven of those restaurants and cafes would have what it calls “full bars” in addition to four dedicated bars and lounges on the premises. The Lakeside Center’s proximity to Lake Michigan allows for the potential to build indoor and outdoor dining venues with lakefront views, and Rush Street also made a commitment in its proposal “to protect the natural surroundings and local ecosphere.”
Leveraging McCormick Place
McCormick Place's Lakeside Center could be transformed into Chicago's mega-casino. https://t.co/v2OCFoEiO0
— FOX 32 News (@fox32news) November 5, 2021
Rush Street does not dance around the subject of wooing covention-goers for the Lakeside Center casino. Its proposal touts having “direct covered access” to McCormick Place and also envisions leveraging the nearly 3,000 hotel rooms in the surrounding area while offering the potential to add 250 rooms of its own. The latter falls within the city’s preferences in its RFP for a “five-star hotel with less than 500 rooms,” though Rivers is the only group of the three to not commit to build the maximum of 500 in its proposal.
The Lakeside Center proposal, according to Rush Street, is a “financially responsible” one in the sense the area will draw a greater percentage of out-of-town visitors, which offers the greatest positive potential impact in terms of tax revenue to the city and state and helps the tourism industry for both Chicago and Illinois. It also claims retrofitting Lakeside to become a casino “would allow the city to begin generating jobs and maximizing revenue from a permanent facility, years sooner than any construction would be able to fulfill.”
Rush Street touted the McCormick Place proposal as one that would bring thousands of jobs to promote workforce development, most notably in Bronzeville and the South Side. In addition to the 25% minority ownership stake in the actual casino, Rush Street set out targets of 30% Minority-Owned Business Enterprise (MBE) and 10% Women-Owned Business Enterprise (WBE) that exceed the city’s minimum thresholds of 26% and 6%, respectively.
The Bluhm factor
Simply put, Bluhm is a Chicago heavyweight who has not been afraid to use his influence in the gaming sphere. He and Mayor Lori Lightfoot have already crossed paths on gambling issues beyond casino gaming, taking opposite sides on a proposed city ordinance that would lift the home-rule ban to allow sports wagering at stadiums within the city limits. That would mean wagering could ensue at Wrigley Field, Guaranteed Rate Field, Soldier Field, the United Center, and — should Pritzker sign HB 3136 into law as expected — Wintrust Arena.
Bluhm offered testimony in staunch opposition of the ordinance earlier this month, claiming it would create a revenue drain on the proposed downtown casino of more than 10% of the $800 million projected in the Union Gaming White Paper published in August 2020 after Lightfoot successfully revised the tax rates for the downtown casino downward. Lobbyists supporting the ordinance argued that Bluhm was trying to funnel sports wagering business to his retail sportsbook in Des Plaines and that he overstated the impact of retail sports wagering on casino gaming as a whole, considering nearly 96% of Illinois’ $4.4 billion in sports betting handle this year has been generated online.
Photo courtesy of Rivers Chicago at McCormick RFP submitted to the City of Chicago
