Victory: A Chicago casino for Rahm Emanuel, maybe

Jun 6, 2011 7:05 PM

The political power former White House Chief of Staff Rahm Emanuel brought to the mayor’s office in Chicago was evident last week when the state legislature approved a bill to expand gaming.

Included in the bill was a casino for Chicago, something Emanuel insisted was needed to keep Illinois money from floating across the river to Indiana casinos.

However, the fact that the approved legislation provided for four other casinos, as well as slot machines for the state’s racetracks posed a problem for Illinois Gov. Pat Quinn, who characterized the proposed law as "excessive" and "top heavy."

In the past, Quinn has emphatically stated he would not support such an expansion of gambling, but he also has supported Emanuel’s call for a gambling license for Chicago.

Without knowing how Quinn would approach the legislation, analysts immediately weighed in, suggesting the bill would be beneficial for slot machine manufacturers but would certainly hurt casinos in nearby states.

Actually, an analyst at Goldman Sachs downgraded the shares of Ameristar Casinos Inc. (ASCA) to "sell" from neutral.

Ameristar operates a casino just across the river from Chicago in East Chicago, Ind., and would be seriously impacted by a downtown Chicago casino.

"Overall that market is fairly saturated," said Chad Beyton, an analyst at Macquarie Capital USA.

"The worst-case scenario, it’s just robbing Peter to pay Paul. If you see a shift to a different area of the city you could see a 5 to 10 percent decline at some (nearby) properties," he said.

It took Emanuel just 16 days in office to achieve what his predecessor, Mayor Richard Daley, had spent nearly two decades attempting to do.

"Emanuel made a huge difference," remarked Illinois Senator Terry Link, a Democrat from Chicago’s north side.

"He understands how to pass a bill, and he worked the General Assembly," Link was quoted as saying.

As for the state’s racetracks, the inclusion of slot machines in the legislation is exactly what horsemen have been lobbying for as the tracks’ revenues have been declining.

Whether Gov. Quinn can stomach the entire proposal remains to be seen but political analysts were quick to focus on the political leverage Emanuel has brought to Illinois.