Chicago casino push gathers steam

It’s been a while since we’ve heard about a casino in Chicago but that doesn’t mean Mayor Rahm Emanuel (D, below) has given up. Far from it. He’s looking at a $839 million pension

Emanuelobligation and a $300 million budget shortfall. Put that together and it spells “casino,” and Mayor Emanuel is launching a full-court press. Gov. Bruce Rauner (R) is a gambling opponent but he’s also a realist, expected to be willing to deal. Emanuel’s real problem is conflicting agendas in the statehouse, where gambling money is seen as the answer to the state’s own budgetary woes.

State Senate President John Cullerton (D) has put his support behind state Sen. Terry Link‘s bill to incept a city-owned in Chicago. But, in order to get what he wants, Emanuel would also have to accept additional new casinos in Lake County, Rockford and Danville, plus five racinos. A more circumspect — but anathema to Emanuel — pair of bills would create a state-owned casino in the Windy City. Link characterizes the negotiations as precarious: “We’ve just received another proposal from the city. We’re reviewing that now. We’re trying to see how it looks compared to what we had. It’s a pyramid. If you pull one brick out, the whole thing could fall apart.”

Rahm is asking for a lot, including three times as many gaming positions as Illinois casinos are currently allowed. Assuming that, a legislative Commission on Government Forecasting & Accountability ran the numbers on Link’s bill and came up with a revenue forecast of $457 million from the new capacity. Detractors say that the proliferation of slot routes around Chicago dilutes much of that projected market. Another deal-breaker Ritacould be Emanuel’s demand for a lower tax rate than imposed on other casinos, lest $200 million go right to the state. This argument rests on the fact that Chicago’s isn’t a for-profit concern. Says a pro-Emanuel source, “There are no shareholders. All the profits would be reinvested in Illinois citizens. It’s very important that the legislators and the governor get that message.”

State Sen. Robert Rita‘s bills assume management fees of $150 million a year, leaving $230 million in profits to split between state and city. Although every dilution of the Illinois market pushes its casinos into a lower tax bracket, the Illinois Casino Gaming Association argues that Rita is underestimating the management fees and overstating the profits. No matter how you crunch the numbers, however, there’s no prospect that Emanuel’s long-sought casino will be a one-shot fix to Chicago’s budgetary woes.

* Electric Daisy Carnival went from being the black sheep of Las Vegas festivals to one of the year’s tallest tentpoles. Now Mayor Carolyn Goodman says, “They’ve been a boon to the economy, no question.” MGM Resorts International and partners that include Cirque du Soleil hope to replicate the magic with Rock in Rio. Its first year will probably be a ‘loss-leader’: ticket sales for the $75 million event are running behind pace and prices have had to be slashed. But it’s getting noticed and MGM will have two more chances over the next four years to make Rock in Rio a Strip institution.

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