MGM Resorts International will likely pass on bidding for the Chicago casino license, according to its chief financial officer Jonathan Halkyard.
When asked about the possibility during MGM’s first-quarter earnings call, Halkyard said:
“Chicago is just complicated.
“The history there in Chicago, the tax and the notion of integrated resort at scale don’t necessarily marry up. And while I think they’ve had some improvement, we’re not overly keen or focused at this point in time there.”
The improvement is likely a reference to a decrease in the tax rates in 2020. Still, the tax rates remain high — slots on revenue between $225 million and $1 billion would be taxed at almost 50%.
MGM CEO Bill Hornbuckle also made it clear that MGM wasn’t interested in Chicago, in part due to complicated tax laws.
MGM responded to Chicago’s Request For Proposals (RFP), so it seemed that they were interested. Thus, their decision to not to submit a proposal is surprising.
Mayor wants Las Vegas in Chicago
Chicago Mayor Lori Lightfoot recently hinted at which type of applicants she’s hoping to see for the casino license.
“We want to make sure that we put out an RFP that’s going to be attractive to some of the top gaming ventures in the world, so for us, the sky’s the limit. I don’t want to name names, but obviously there are some that we would be very excited if they applied.”
MGM fits the description above. While other Las Vegas gaming giants will likely apply, Lightfoot hopes that more companies don’t come to the same conclusion as MGM.
Wynn Resorts looks like a possibility, as they have publicly expressed interest.
“When a large city of significance decides to consider a gaming resort, we are interested. Chicago fits that profile,” Wynn spokesman Michael Weaver told Crain’s Chicago Business.
Lightfoot criticizes pace of Illinois Gaming Board
The Illinois Gaming Board (IGB) has taken a long time to assess casino license applications after the 2019 gaming bill allowed for six new casinos in Illinois.
The casino regions will be Waukegan, Danville, Rockford, Williamson County, the south suburbs and Chicago.
Several groups applied all the way back in October 2019. And as of this writing, no licenses have been handed out.
The IGB deemed Hard Rock Casino Rockford “preliminarily suitable” for a license in February, but nothing has been finalized.
Obviously, there is no Chicago casino application yet. But Lightfoot has taken note of the IGB’s slow pace.
Lightfoot told the Chicago Sun-Times in late April:
“Once we present a proposal to them (IGB), we’ve got to move forward expeditiously. And again, I don’t want to prejudge it, but I’m looking at the time, like the time it takes for the gaming board to do its work — it’s got to speed up.”
BetMGM also left out of Illinois sports betting
BetMGM is a pending Illinois sports betting applicant, and has been so since September.
With Illinois Gov. JB Pritzker’s decision to return to in-person registration, pending sportsbook operator applicants are among the most negatively affected. Count BetMGM in that category.
It looked like BetMGM would gain market access through Par-A-Dice Casino and immediately become a player. BetMGM still may seek market access with Par-A-Dice, though that route looks less enticing now than it did a few months ago.
Could BetMGM be a candidate to apply for the $20 million mobile-only license that would trigger online sports betting registration for everyone? While that’s a hefty price tag, BetMGM has deep pockets, so it’s certainly possible.
At any rate, BetMGM will be in the Illinois sports betting market at some point.
But it doesn’t look like it will be in the casino space any time soon.