Casinos, Chicago, and Lotteries
This week Chicago released the five developer proposals vying to build a casino in the city.
This week Chicago released the five developer proposals vying to build a casino in the city. Decades in the making, the plan will continue to receive attention for the next several years, with the site selection being the question on everyone’s mind. Each location will offer gaming tables, restaurants, bars, entertainment venues, and either an on-site hotel or nearby access.
After a rocky 2020 casino gaming and lottery revenue has rebounded. Over the past year a number of states continued to implement on-line gaming and sports-betting allowing at least some revenue to come into public coffers. However, with the outlook for tourism and large venue gatherings still upended, the next year may still not bode well for the industry.
This week’s digest looks at the Chicago casino proposals, lotteries, and sports betting — it is also the last newsletter of 2021!
See you in the New Year and thank you for reading.
IN FOCUS
On-Line Sports Betting
The Sports Gambling Gold Rush Is Absolutely Off the Charts Bloomberg
Two More Maryland Casinos Ready To Launch Sports Betting Sports Handle
NJ Sportsbooks Crush US Revenue Record in November NJ Biz Magazine
Connecticut nets $4M in first full month of sports betting CT Post
Lottery Revenues
Community video lottery machines continue strong revenue production WV Metro News
Will 2022 be the year Alabama lawmakers pass gambling, lottery bill? AL.com
Massachusetts Lottery sales outpacing 2020 profits Mass Live
More Casinos Coming?
A mini ‘Eiffel Tower,’ thousands of jobs and a jackpot for the city: Developers make pitches for a Chicago casino Chicago Sun Times
Puerto Rico set to open three new casinos in 2022 Yogonet Gaming News
New York City Casino Pitch Includes Cryptocurrency Trading Floor Bloomberg
CHART OF THE WEEK
This week the City of Chicago held a meeting summarizing the five proposals it received to build and operate a casino within the city limits. The city says it “welcomed 60 million domestic and 1.5 million international visitors in 2019,” providing a desirable location for a casino.
An initiative three decades in the making, Chicago is extremely close to awarding a casino contract. The casino tax revenue is earmarked to help cover the significant shortfalls in its public pension system.
However, the plan was almost derailed last year when developers balked at the proposed tax rate, claiming it was unworkable. The original bill imposed a 72% effective tax rate on a Chicago casino – the highest gaming tax in the country — but after changes it was lowered to 40%.
Four of the five sites proposed for a Chicago casino are on the Near South Side. Mayor Lightfoot will make the final choice on which proposal advances to the City Council. The chosen developer would then have to apply for state approval.
Interesting Reads
The Optimal Design of State-Run Lotteries NBER
The Issue: Do lotteries exploit the poor or are they a win-win that generates enjoyment and government revenues?
Key Statement:
Lottery sales respond more to changes in jackpot expected values than to changes in price or lower prizes, consistent with a specific type of probability weighting. In our survey, bias proxies such as innumeracy decline with income and explain 43 percent of lottery spending. In our model, current multi-state lottery designs increase welfare but may harm heavy-spending low-income people.
Any opinions expressed herein are those of the author and the author alone.