As Chicago considers five possible locations for a casino, an Indiana gambling facility just across the state line is making expansion plans of its own.
Spectacle Entertainment, which owns two Lake Michigan riverboat casinos in Gary, announced plans earlier this month to move those gambling operations to a 40-acre site adjacent to Interstate 80/94.
It will partner with Hard Rock to manage the new $400 million casino property, which will be just 18 miles from the “Harborside” location at 111th Street and the Bishop Ford Freeway, one of the five possible casino sites Chicago has selected for consultants to study.
The timing of Spectacle’s announcement, just a month after Gov. J.B. Pritzker signed a bill that expands gambling in Illinois and allows for the construction of a large Chicago casino, is no coincidence.
Spectacle and other casino companies in northwest Indiana have seen the amount of money they win from gamblers slide during the past decade, and they are moving aggressively to hang on to Chicago-area players who travel to the Hoosier State to gamble. The four northwestern Indiana casinos run free daily shuttle buses that pick up Illinois gamblers from various locations.
The new Hard Rock casino in Gary, which would become Indiana’s biggest gaming facility in terms of the number of slot machines and table games, will have multiple restaurants and bars, a Hard Rock Cafe, and a Hard Rock Live concert venue.
“The passage of the Illinois legislation was a big part of the catalyst to partner up with Hard Rock,” said John Keeler, general counsel for Spectacle Entertainment, which was created last year and received approval from the state commission to acquire the casinos in March.
“Hard Rock is like the Rolls-Royce of casinos,“ Keeler said. “One of the things we believe will help us compete is to move out of the water and into a good commercial location close by a well-traveled interstate.”
The two riverboats Spectacle operates in Gary — Majestic Star I and Majestic Star II — are among the smallest of Indiana’s 13 gambling facilities in terms of annual winnings, or the amount casinos make from players.
They brought in $152 million in winnings during fiscal year 2018, down more than 30% from 10 years earlier, according to annual reports from the Indiana Gaming Commission.
Two other casinos — Horseshoe Hammond, which is undergoing a renovation, and the Ameristar Casino East Chicago — also operate in northwest Indiana and draw gamblers from Illinois. But winnings for all four casino sites in northwest Indiana fell 22% between 2008 and 2018.
“The (northwestern) casinos aren’t doing so well. Thus, the reason for the sale of the Gary riverboats,” said Ed Feigenbaum, editor of Hannah News Service’s Indiana Gaming Insight. Indiana’s governor and legislature are “proactively pulling the industry forward,” Feigenbaum said.
In May, Indiana Gov. Eric Holcom signed a bill that legalized sports betting and mobile gambling and paved the way for Gary’s riverboat casinos to move to land-based locations. The bill also calls for the addition of a Terre Haute casino west of Indianapolis.
Some of the Illinois gamblers currently making the trip to Indiana say they’ll wager their money locally once Chicago opens its casino.
Juan Curruchiche, 77, a Norridge resident, said he boards the shuttle about once a week with a coupon to Spectacle’s Majestic Star.
“I usually take the bus in the morning and I don’t return until 3 p.m.,” Curruchiche said. “My favorite is Majestic because it’s much more comfortable. There aren’t a lot of people and you can get to the slot machines before it gets crowded.”
However, Curruchiche said if he had a choice between gambling at the Indiana casinos or a Chicago site, he’d rather visit the local one.
“Honestly, anything to cut the travel time. Right now it takes about 35 to 40 minutes to get to Majestic. It’s not a bad trip, but I would rather be seated next to a slot machine,” Curruchiche said.
And he isn’t the only Illinois gambler who thinks so. Lorraine Adkins, 55, a South Shore resident, said she will think twice about shuttling to Indiana once Chicago has a casino.
“I’ve been going to the those (Indiana) casinos for a long time, but some of them have worn down over the years,” Adkins said. “I think a new casino in the city will be good, especially if they’re going to have nice restaurants.”
Under Indiana’s new gambling expansion law, riverboat casinos must obtain approval from the state to move inland. Spectacle filed its request to relocate earlier this month, according to Jennifer Reske, deputy director of the state’s gaming commission. The commission will make a final decision on Spectacle’s request at its meeting on Aug. 28. The company is also seeking approval from Gary’s zoning commission to start construction, with the hope of the casino opening by early 2021.
Horseshoe Hammond is embarking on an expansion of its own. The casino is renovating its concert venue to include more than 2,500 seats, a project that will wrap up in early September, Vice President of Marketing Shannon McKellar said. Now that the state gaming commission has approved a list of sports that players can bet on, Horseshoe also plans to roll out sports wagering in-house, in time for the Sept. 9 matchup between the Chicago Bears and the Green Bay Packers.
“We are very focused in maintaining our position and continue to be the best in the class,” McKellar said.
Ball State University economics professor Mike Hicks, who studies the economic impact of casino openings, said Indiana gaming operators could risk losing players and profits when Chicago’s casino opens, just as they did when Ohio opened two casinos near Cincinnati. Jack Cincinnati Casino opened in 2013 and Belterra Park opened in 2014.
“We saw big dips in Indiana when Ohio opened casinos … that loss never returned,” Hicks said.
Illinois Casino Gaming Association Executive Director Tom Swoik said competition also comes in the form of new ways of gambling, including sports betting, which is now legal in the state. Those new forms of gambling could make it harder for Chicago’s new casino to attract customers.
Earlier this month, Mayor Lori Lightfoot floated five sites, all on the city’s South and West sides, as possible locations for a Chicago casino. The five are the “Harborside” location at 111th Street and the Bishop Ford Freeway, near the Pullman neighborhood; the former Michael Reese Hospital site at 31st Street and Cottage Grove Avenue; a site at Pershing Road and State Street, which is near Guaranteed Rate Field; the former U.S. Steel parcel, which is between 79th and 91st streets along South Lake Shore Drive; and the lone West Side site, at Roosevelt Road and Kostner Avenue.
“The state is going to have a rude awaking with this large expansion bill,” Swoik said.
Swoik said casino operators will have to ramp up their amenities to pull in more visitors. “There are so many gambling options,” he said.
“The market is saturated.”