Let’s learn a lesson from Las Vegas
Chicago should rely on entertainment, not gambling, for revenue
Downtown? South Side? Close to tourist hot spots or designed to be a tool of urban regeneration? Fevered debate is underway about the most desirable location for the newly authorized Chicago casino and there are millions of dollars at stake.
But these arguments are absurd — the far more important question is what should be inside this still mythical Chicago casino.
And the answer actually should have very little to do with gambling.
Here’s why. Gambling revenues are in decline from the Foxwoods Resort Casino in Connecticut (where slot revenue last month was down 12% on a year-to-year basis) to the Las Vegas Strip. The industry is notoriously sensitive to competition (look at what happened to Atlantic City) and, more troubling for those in the industry, younger Americans are proving to be much less interested in traditional gaming, which means slots, video poker, craps and blackjack. Moreover, Illinois has very high taxation rates: the
new casino will be obliged to hand over as much as two-thirds of its revenue to the City of Chicago and the State of Illinois.
How might it actually do that? Well, it will most likely need to nix all the free drinks and other elements of hospitality that make gambling more pleasurable and have tighter slot machines and tougher rules for table games.
Consider the game of blackjack. You might recall getting a 3-2 bonus for the game’s namesake hand, but that means you’ve not been to Vegas lately, pal, where a 6-5 bonus is becoming ubiquitous. If a casino has to pay that much tax and still turn a profit for its investors, it may well struggle to give you any bonus at all. And what would the rational player do? Head to Vegas, Indiana, or even suburban Illinois. Or maybe not play at all. Most gamblers aren’t stupid. They won’t play where they perceive they cannot win.
The only players who might not do that are those without access to those other casinos. Maybe locals from the immediate neighborhood. And are those likely impoverished Chicagoans the people whose money we would want to take to shore up our city’s pension systems? Of course not. That would be injurious to the health of the city.
What’s the answer? Las Vegas figured it out long ago. At your typical large Las Vegas casino, gambling only accounts for 34% of revenue. The rest of the money comes from hotel rooms, fancy restaurants, cocktail bars and, of course, more live entertainment than any other city in the world. This month on the Strip where Lady Gaga roams, you can see Gwen Stefani, Jay Leno, Janet Jackson, Cedric the Entertainer and, of course, a suite of fabulous market-segmented shows created by the Cirque du Soleil, which is constantly renewing its offerings and paying attention to the needs of all demographics.
All the most successful casinos have figured this out, even those far from Vegas: Foxwoods has an outlet mall, a museum, headliner concerts and an impressive portfolio of celebrity chefs. Its patrons are willing to drive past other casinos because there is far more to do there.
That’s the debate we should be having right now: What fabulous entertainment would we want in such a casino? What great Chicago restaurants should be given a new showcase? What new young chefs should be given an opportunity? Which of our fine bars would we want to feature? Which comedy club should be there? Could this casino provide jobs beyond servicing slot machines and cleaning up at the buffet?
Cultural jobs. Creative jobs. Artistic jobs. Opportunities for cultural entrepreneurs of all stripes.
You know, things that might make this Chicago casino something other than totally depressing. Which you can bet it may well be.
Gambling alone ain’t gonna do that. Nor is it going to make us all as much money as some politicians think. There is a cautionary tale taking place right now in Boston. This is becoming more and more of a zero sum game. And remember, Illinois makes it far harder than most states to turn a profit.
For sure, gambling still produces revenue — especially at first, before the novelty wears off. But the notion that a casino in a poor neighborhood will spur economic development must be leavened by an immediate understanding that the most frequent players likely will live nearby. Mayor Lori Lightfoot will achieve more of her goals of equity and inclusion by stipulating where the workers come from and not demand the casino be located in a place where it could do harm. From a policymaker’s point of view — and a taxpayer’s point of view — casinos should be for the relatively rich. You need equity in the hiring; you don’t need it in the playing.
No one’s life will be changed by feeding slots; the only moral casino income there for the City of Chicago is discretionary income. How could we otherwise look at ourselves in the mirror?
Should this debate wait until the city has chosen an operator, assuming it can find one?
Of course not. Once the location is chosen, the possibilities will either be expanded or diminished or, quite possibly, eradicated. What we should be building is a new world-class attraction — a fun, adult place to visit that has Chicago culture at its core.
Fine, the city needs money and there will be some slots and games. They can be fun for some.
But some thudding cinder-block operation filled with our fellow panicked Chicagoans losing their money in tough-to-win games isn’t going to be anything worth having.
Not in the city we love.