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Suitors For a Waukegan Casino is Down to Four

Suitors For a Waukegan Casino is Down to Four

Expansion of both land-based casino properties and real money online casino sites is driving industry growth. However, not every casino plan makes it past the drawing board. Sometimes the best ideas for new and exciting venues simply stay ideas and not reality. The Chicago Tribune’s online version, recent detailed the casino situation in Lake County and more specifically Waukegan, Illinois.

What Suitors For Waukegan Casinos Are Left?

The proposed Casino Fontana in Waukegan would have been something to see. The plans called for 91,000 square feet of casino space. There were going to be 1,300 slot machines and 30 table games. Included in the resort-style design were multiple dining options, bars and a food court.

The Italian-themed casino venue was the brainchild of Waukegan Development Associates. The building site was 10 acres neighboring a city-owned site. A few days ago, the developer sent a letter to city officials to take the group’s bid off the table.

This was just a week after the company made its pitch for the proposed casino in a four-hour public hearing. As part of the development process, it had been actively involved in the city’s vetting process. This also includes using a consulting firm as a liaison.

Full And Open Participation Process

Next Reality Chief Executive Officer Andrew Hochberg’s company was part of development team. He was quoted in the letter to city officials. He stated that the group’s “full and open participation in the process, including and especially the public hearing” was a factor. He also said this led them to “fully evaluate this opportunity.” It also lead to the decision to withdraw from the process.

The hearing also was marked by several key city influences holding back support for the Waukegan Development Associates’ proposal. This included several Waukegan aldermen and two are city mayors. Support from this group was given to other potential casino projects.

Mr. Hochberg was questioned about his current ties to Tap Room Gaming. This is a Lake County-based video gambling company. It is led by former Illinois state Sen. Michael Bond. Bond made several sizable donations to particular aldermen for the recent election.

Chesapeake Gaming And Waukegan Development Associates

Robert King along with Chesapeake Gaming were other principals with Waukegan Development Associates. Hochberg emailed a local news source that their team had “determined that we should concentrate our resources on other business ventures and opportunities.”

He went on to add that Waukegan Development Associates is made up of a “group of professionals and business owners.”

He added “…who, individually and collectively, are constantly assessing myriad factors to determine the best course of action in pursuing and executing business opportunities.” This pertains to “whether that is a casino or other projects and initiatives.”

As far as the 10-acre site, Hochberg said that Next Reality is “designing and formulating development plans for the site.” He mentioned that this process was independent of a casino.

The other proposals for a Waukegan casino number four at this point. One area of interest is a 32-acre city-owned site at the Fountain Square shopping complex. It sits between the boundaries of District 50 and District 121 in Lake County.

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Ditka Helps Indiana Officially Launch Sports Betting

mike dikita sports betting

Legal sports betting began in Indiana on September 1, at the Ameristar Casino in East Chicago, just in time for the NFL regular season to begin. There are other venues who are following suit. And the race is most certainly on for customers.

How Does Mike Ditka Help Indiana Officially Launch Sports Betting?

We say that because neighboring Illinois has been a little slow to the table, not with its approval of sports betting, but rather its establishment of a set of rules and regulations by which the activity will be conducted. And it might be a few months before they are able to get that done. As such, they are going to fall behind, as locations such as the Ameristar, the Horseshoe Casino in Hammond and the Blue Chip Casino in Michigan City, are just a stone’s throw away from the major population center of Chicago.

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And they are trotting out the local legends. Mike Ditka, the Hall of Fame player for the Bears who was also the head coach the last time Chicago won the Super Bowl, and Devin Hester, who returned a kickoff for a touchdown the last time the Bears appeared in the Super Bowl, were special guests at the grand opening of the Ameristar-East Chicago sportsbook, which at the moment consists of five sports betting windows and a number of free-standing wagering kiosks.

Most of the customers who were interviewed by reporters expressed that they enjoyed the convenience factor; that Las Vegas may be a difficult place to get to, but if they can drive just a short distance to find a location where they can out down a casual wager and sit and watch the game, that was a real attraction.

Betting On Mobile Devices

There is yet another leap beyond this, of course. It will be only a matter of time until these same Indiana gaming establishments have the ability to enable their patrons to place their bets on a mobile device, thus increasing the level of convenience, and when that happens, there is the potential for a genuine explosion in popularity. The process the casinos will go through is to affect a partnership with companies who specialize in online betting.

The governor even got in on the act.

Republican Eric Holcomb, who signed the sports betting bill into law a little more than three months ago, was politically correct as he strode up to the window at the Indiana Grand Casino in Shelbyville and placed $10 wagers on the Indianapolis Colts (to win the Super Bowl), Indiana Pacers (to win the NBA title) and Indiana Fever (to win that night’s WNBA game), with a pledge to donate any winnings to the Indiana Canine Action Network.

Indiana is now the 13th state that has approved sports betting – the result of last year’s Supreme Court ruling to strike down the Professional and Amateur Sports Protection Act (PASPA), which had prohibited sports wagering in states that had not already “grandfathered” it in.

And those gaming establishments in Northwest Indiana now have the ability to leverage those offerings they now have at their disposal against casinos in Illinois that will be looking for their piece of the action.

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Arlington Racecourse Won’t Do Casino Gambling

Arlington Racecourse Casino Gambling

The new laws that permit casino gambling and sports betting at pari-mutuel establishments would seem to be appetizing enough that everybody would be jumping in.

But for Arlington Racecourse, that’s not even close to being the case.

There won’t be any casino games there, at least not any time in the foreseeable future. And there might not even BE a future, if what the ownership group behind the facility is telling the truth (and there’s no reason they wouldn’t be).

Arlington is owned by Churchill Downs, which of course owns the illustrious racetrack in Louisville, not to mention other gaming locations. So it is not as if they have a moral dilemma with the concept of casino gambling. And as for sports betting, they would actually like to have that.

But the tax situation is going to be too impossible, in their estimation.

CEO Bill Carstanjen maintains that the additional taxes that would be charged to Arlington – something that would be required by law in order to fund horse racing purses, would place too great a strain on the enterprise. The estimate is that it would be up to 20% higher than the other casinos in the Chicago area, and that puts them at a competitive disadvantage, for the sake of an activity that is getting increasingly and disproportionately expensive.

Interestingly enough – and the people at Churchill Downs should know this – the idea of having “racinos” was to give some new life to thoroughbred racing. But pari-mutuel venues have been cutting out horses in favor of other live events (such as Jai-Alai) because it’s just cheaper.

Did anyone think that instead of a revival, horse racing might gradually be getting killed off because it’s a loss leader?

Arlington has been in existence for more than 90 years; it is home to the annual Arlington Million as well as Breeders Cup action, but whether they will have racing well into the future is very doubtful. The Churchill people will not commit to a racing schedule beyond 2021, and in the interim, “longer-term alternatives are explored,” according to a statement from the company.

Churchill Downs is very active in the gaming business in Illinois; through their ownership of Rivers Casino they have a facility in Des Plaines for which they recently petitioned to increase the gaming positions from 1200 to 2000. They are also bidding on a license in Waukegan.

1200 Gaming Postitions?

So what are they giving up with Arlington? Well, they would have had the right to install as many as 1200 gaming positions there, so maybe it is money lost. But then again, maybe not. “It is with a heavy heart that we conclude that we can’t make this work,” said Carstanjen.

They are leaving some entities very unhappy with their decision. The Illinois Thoroughbred Horsemen’s Association is one of them. They cite the potential loss of many jobs, along with the fact that Arlington has spent years aggressively lobbying legislators for casino gaming. They are going so far as to suggest that Churchill Downs should be prohibited from applying for a sports betting license in Illinois.

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Chicago Looks To New Boston Casino as Successful Prototype

downtown chicago boston casino

The city of Chicago is still scouting potential sites for a downtow n casino. However, it can use Boston’s newest casino as a prototype for success. Owned and operated by Wynn Resorts, Encore Boston Harbor is off to a booming start.

The website www.chicagobusiness.com confirmed this observation in a recent post. During its first month open to the betting public, revenue topped $49 million. With a $600 million annualized rate, Encore Boston Harbor has outpaced even the most profitable Illinois casino property. Known as an integrated resort modelled after Wynn properties in Las Vegas, the Boston operation has been impressive so far.

The three-year outlook for Encore Boston Harbor could top $1 billion in revenue. While these early growth projections are rather ambitious, the demand appears to be there. The project cost $2.6 billion to build and complete. This already makes the stakes rather high for the Las Vegas gaming giant. The Boston project relies heavily on a high-profile location. It also relies heavily on a marketing strategy that can attract high rollers to its casino floor.

Wynn goes out of its way to cater to that particular cliental in Las Vegas. Casino consultant Frank Fantini issued the following observation:

Will Big Whales (Gamblers) Come To The Casinos In Chicago?

Wynn casino resorts specializes in the whale (big gamblers). You know they could do that in Chicago.”

Most of the speculation for a Chicago casino has centered on location. It has also centered on an acceptable structure for taxing casino revenues. Less talk has centered on what kind of casino the city should build.

Laurence Geller is hotel investor and former hospitality manager. He weighed in on the matter with the comment:

“It would have to be a giant facility. Don’t try to chintz it. I’ve seen too many crappy casino deals. It’s not like putting a casino in Rosemont (a Chicago suburb).”

New Wynn CEO Matt Maddox mentioned Chicago as a casino location. This was back in June when the Encore made its initial debut. He also added that concerns over a potential effective tax of 72 percent put a hold on those ideas. Other Las Vegas giants such as MGM and Sands have yet to commit to the Windy City.

A Casino In Boston?

When asked about Boston as a location, Maddox responded: “One thing I don’t want to get lost in this is, we are in the business of tourism. We’re focused on the region, but we’re really focused on the planet.”

Going back to the three-year projections for Wynn’s Boston casino, profit projections also have lofty goals. Numbers such as $225 million to $325 million before taxes, interest, and other costs have been thrown around.

Added costs to the project included millions in site preparations and infrastructure improvements. More than $100 million has also been spent to acquire land for future expansion.

Bloomberg senior analyst Brian Egger expects Wynn to cross-market the Boston location. Plans will start targeting high-end Asian gamblers. Fantini added that large casinos will invest money that other companies will not be based on the projected return on investment. This should also hold true in Chicago for the right location.

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Casinos In Chicago May Damage Indiana But Suffer From Saturation

casino in chicago

Could a casino in Chicago succeed? And if so, to what extent? That is what has been explored in a feasibility study in advance of plans actually going into effect.

Union Gaming Analytics came back with mixed results. Their conclusion was that any casino that existed within the Windy City was going to be inundated with taxes, to the extent that it could not be wildly profitable.

Can A Casino In Chicago Succeed?

At the same time, however, there was practically no way to avoid becoming the dominant facility in the market.

Over the long haul, that is going to affect the Indiana casinos that are located in Northwest, which borders Chicago. These are cities such as Hammond, Gary, Michigan City, and East Chicago, all of which currently draw from the Chicago area. It was projected that about $260 million in gross revenues would, in effect, be transferred from those Indiana areas to Chicago.

And it doesn’t necessarily stop there. Illinois Senate Bill 690 is also going to authorize both a casino and a “racino” (a horse track with slot games) in the south suburbs of Chicago, in addition to slots at other tracks like Arlington and Hawthorne.

Concerns About Saturation

So one can imagine the concern on the part of the Indiana operators. But there is a “saturation” factor as well, in that all of the gaming options that would be found in Chicago and its surrounding areas would perhaps make all of them weaker, since they would all be competing for the same customers and the same dollars.

And the placement of the casino in the city itself is going to be very important. The feasibility study points out that all of the sites that have been suggested by Chicago mayor Lori Lightfoot would not optimize the effectiveness of the casino, simply because they are not convenient for enough gamblers to get to.

There are other factors that have to be taken into consideration. One of them is that customers who visit a casino in the city of Chicago itself would probably want to have some access to downtown. There are is also the very real concern of the casino being in an area that is unsafe. And let’s face it; Chicago’s violent crime rate is alarming to many people.

A Chicago Casino Can Realize Appreciable Revenue?

The study offers the opinion that a Chicago casino could realize appreciable revenues if it is located in an area where, in their words, “that is less penetrated with existing and future casino venues than the areas to the south of Chicago.”

Mayor Lightfoot has shown interest in fielding public input as to the best sites to place a casino in the city. Her office issued an eleven-question survey toward that end, which is designed to be answered by Chicago residents but does not have any built-in safeguards to prevent, say, residents from Northwest Indiana from giving a Chicago zip code and offering feedback.

Still, the mayor wants such a process to be transparent to, as she put it, assure the public that “all voices can be heard as the city moves forward on this historic project.”

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VICI Purchases Downtown Detroit Greektown Casino In Michigan

downtown detroit greektown casino

Recently, the gambling rumors and stories in their online casino forums say that “VICI completes their purchase on Greektown Casino In Detroit.” While we heard stories about this earlier in 2019, it appears that this casino deal went through. According to a press release on the Businesswire on May 21, 2019, four Michigan Gaming Control Board members approve the c casino sale for Downtown Detroit’s Greektown Casino-Hotel to Penn National Gaming, Inc.

When Does VICI Complete Their Casino Sale In Detroit’s Greektown Casino?

It appears that the casino sale took place in late May 2019. In 2018, the Gaming Operator Jack Entertainment seemed to announce the sale is taking place. Since then, rumors have spread. However, It appears that this all-cash casino sale went through for one billion dollars. Furthermore, the person and/or company that purchases the Downtown Detroit Greektown casino is Dan Gilbert. If you are not familiar with Dan Gilbert, he is the owner and founder of Quicken Loans. Also, he owns the NBA’s Cleveland Cavaliers.

In a recent article on Crainsdetroit.com on May 24, 2019, called What’s next after $1 billion sales of Greektown Casino-Hotel? it seems like the deal went through. According to CrainsDetroit.com, VICI Properties purchases the real estate as well as the land assets of the Detroit, Michigan for 1 billion dollars. Furthermore, it appears that VICI, the NY based company who is a REIT, puts down three hundred million dollars to start the contract.

A One Billion Dollar Casino Sale

After many months of hard work on both sides, the deal appears to close with VICI putting seven hundred billion dollars to close the deal. Now, VICI (The New York Real Estate Investment Trust) owns the Greektown casino resort. Now, Wyomissing, who is a Pennsylvania-based operator, has no stake in that casino resort.

Is The Downtown Detroit Greektown Casino In Debt?

In late summer or early fall of 2018, The Detroit Free Press website reports that Penn National State Gaming owes four hundred million dollars on the Downtown Detroit Greektown casino. However, Greektown is the third biggest revenue earner in Detroit? So, how is that possible? Well, we don’t know if that is true or false. According to our research, the only other Michigan casinos that come close to doing their revenue is The MGM Grand Detroit and The Motor City Casino. We don’t know the financial situation on any of these companies.

In the recent press release, Wilmott reportedly goes on the record. According to the Detroit website, he allegedly says, “The fact that we’re the smallest casino of the three certainly gives us opportunities for improvement.” Shortly after that, it appears that the Penn National CEO doesn’t have any significant plans to change the property.

This Greektown Casino Gets AAA Rating

It seems that Penn National establishes this Downtown Detroit Greektown casino-hotel in 2000. This casino offers a high-rise hotel with AAA Four Diamond hotel rooms. Ultimately, there is fourteen thousand square feet for business meetings and one hundred thousand square feet for the casino floor. At this Michigan casino, you can play over twenty-seven hundred slot machines, sixty table games and real money poker in their poker room. Additionally, they have a coffee shop, several restaurants, multiplier bars, and some fast food.

• Source: VICI Properties Inc. Completes Acquisition of Margaritaville Resort Casino and Lease to Penn National Gaming, Inc. From Businesswire.com On January 2, 2019.

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