A reduction of the tax rate for Chicago Casino from 72% to 40% makes the project more appealing for developers, says a recent report.
Chicago Casino More Attractive for Developers Following Tax Reduction
A report released earlier this week by the Union Gaming Analytics suggests that the lowered tax rates for Chicago Casino makes the project “attractive-enough” for developers. Prior to the overhaul, taxes of the gaming revenue for the project were set at the staggering 72%. This however was changed back in June when Governor J.B. Pritzker signed a bill aiming at boosting the prospect for the Chicago Casino project. This effectively reduced the tax rate from 72% to 40%.
With that in mind, over the previous review of the project, the analytics firm deemed the 72% taxes as “very onerous.” Last year the company said that such heavy taxes can make the project less attractive to developers. It also outlined that under such conditions, operators would make: “a few pennies on the dollar.”
But now tables have turned and the recent report suggests that the reduced tax will get the attention of casino developers. “While the Chicago casino fix is already “old news,” having been signed into law in late June by Governor Pritzker, we believe it received scant attention on the part of casino developers,” wrote Grant Govertsen, analyst and author of the paper. He added that the Chicago casino opportunity was largely flying under the radar, considering the novel coronavirus (COVID-19) and its impact on state’s funds and development plans.
The Report Suggests Chicago Casino to Open Doors in 2025
The whitepaper by Union Gaming Analytics suggests the legislation to delay the submissions of requests for proposals for the project until early next year. According to the report, this way the developers will have enough time to check their balance sheets. This is needed because of the COVID-19 pandemic, which can have unexpected impact on the books by developers, who want to participate in the project. The report also called for non-binding requests for information which would: “be a better way to take the temperature of casino developers.“
The analytics report added a prognosis that if the RFP is held in early 2021, a license would be granted by the Illinois Gaming Board by the end of 2021. Although building a large scale project on a city-scape background can be more difficult, an expected opening of Chicago Casino can be done in early 2025, outlines the report.
The recently released report is being reviewed by Mayor Lori Lightfoot’s office, announced a spokesperson. Here it is important to mention that last year, five sites were proposed by Mayor Lightfoot for the future project. According to industry insiders, the closer to the city center the casino is, the bigger the profits will be. With that in mind, Chicago Casino is far from its brick and mortar phase and the proposed sites for the future casino are not definitive.