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DELOITTE & TOUCHE STUDY PREDICTS GAMBLING WOULD MEAN A HALF A BILLION DOLLAR GOLD MINE FOR CHICAGO

 DELOITTE & TOUCHE STUDY PREDICTS GAMBLING
 WOULD MEAN A HALF A BILLION DOLLAR GOLD MINE FOR CHICAGO
 CHICAGO, May 20 /PRNewswire/ -- Deloitte & Touche was engaged by the city of Chicago Gaming Commission to provide an objective study and analysis of a number of key economic issues related to the impact of the proposed project (the complex) on the city, Cook County, the Chicago metropolitan area, and the state of Illinois.
 Based on an extensive review of gaming literature, studies, and other cities' experiences; a comprehensive study of the national and Illinois gaming industries; analysis of the Chicago area economy and visitation market; and information on the complex and other related operations, Deloitte & Touche estimated direct, related induced, and indirect economic impact of the complex. Additionally, Deloitte & Touche estimated fiscal impacts to local and state governments and examined issues related to the development of an industrial park in the city.
 The complex is being proposed against a backdrop of a national proliferation of gaming (12 percent annual revenue growth) and well established gaming in Illinois. The gaming-entertainment complex is estimated to involve $2 billion in investment for the 6.7 million square-foot entertainment (2.5 million s.f.), four casino (0.5 million s.f. total), four hotel (0.7 million s.f. total), and parking (3.0 million s.f.) facility. Should legislation be approved this session, construction could begin in June 1994 and the complex could begin operations in January 1997.
 Over 15.7 million visits are expected to the complex in 1997, growing to 20.1 million visits in 2000. This compares to Disneyworld's 29.0 million visits in 1991. The complex is expected to increase Chicago area visitation by 1.5 million visitors in 1997, growing to 2.9 million in 2000. Metro-wide hotel occupancy is expected to increase from today's 61 percent to 75 percent stabilization in 1998, inducing the addition of 1,000 new hotel rooms per year beginning in 1998.
 The complex is estimated to create 7,700 full-time annual equivalent construction jobs and to employ 12,000 full-time equivalents in its operation. Resulting total metropolitan area employment by the year 2000, including complex employment, other area hospitality jobs, and indirect jobs, is estimated to be 38,100. This represents 0.8 percent of metro-area employment. Downstate employment may decline by 2,300 jobs in 2000, the overall net statewide job gain is expected to be 35,800.
 The complex is estimated to generate $1.6 million in sales and make $868 million in expenditures in its first year of operation. By 2000, the total metro-wide sales/output from direct and indirect activities, is expected to exceed $3.8 billion. This represents less than 0.6 percent of metro-area sales/output. Although downstate sales/output is estimated to decline by $126 million, the overall net statewide sales/output is estimated to be $3.7 billion.
 Excluding gaming taxes, incremental revenues to the city, the county, and the Metropolitan Pier and Exposition Authority (MPEA) is estimated to exceed $135.3 million in 1997, growing to $174.3 million in 2000. In 1997 city revenues are expected to be $108.6 million, Cook County revenues $16.1 million, and MPEA revenues $10.6 million. Incremental state revenue, excluding gaming taxes, is estimated to be $126.0 million in 1997 and $195.2 million in 2000. Approximately, 25 percent of state taxes will be redistributed to the city of Chicago, 28 percent to suburban and collar counties, and 47 percent to the downstate area. Even at one-half of the existing riverboat rate, gaming taxes
will generate the greatest revenues of any single tax. A 20 percent gaming tax will produce over $218 million gaming tax revenues in 1997, a 10 percent rate will yield $109 million in revenues, and a 7.7 percent rate (Nevada effective rate) will provide $83.5 million in revenues.
 Beyond the $195 million estimated by Deloitte & Touche for infrastructure, city departments estimated $11.4 million in incremental annual government service costs in 1997 attributable to the gaming complex. At the state level, a maximum of $64.7 million additional costs are estimated to be required by a licensing and regulatory body.
 The impact on existing state gaming venues was analyzed:
 -- The Illinois Lottery is not likely to be significantly affected by the complex.
 -- Assuming no mitigating steps are taken, horseracing is likely to be adversely affected, possibly incurring over a 20 percent decline in revenues.
 -- The complex is expected to increase casino gaming demand sufficiently for both Chicago metropolitan area and downstate riverboats to prosper.
 -- Charitable gaming is not expected to be adversely impacted.
 The complex is expected to redirect visitor expenditures from existing metro-area amusement, entertainment, and related establishments by less than 0.3 percent in 1997, or $26 million on a $9.9 billion existing spending base. Metro-area and total statewide redirection of resident expenditures is expected to be $19 million and $81 million, respectively, exclusive of horseracing impacts. It is unlikely that the complex will pose a threat to downtown museums and cultural attractions; indeed, additional traffic generated may increase attendance.
 Approximately, one million square feet of space may be required for the expansion and development of support and related firms, mostly in the wholesale sector. With a large established hospitality support service infrastructure in place and 17 million square feet of vacant industrial space, introduction of the complex is not likely, in the absence of a significant government initiative, to spur the development of an industrial park.
 -0- 5/20/92
 /NOTE TO EDITORS: The following is a summary of a report presented to the city of Chicago on Tuesday, May 19. A complete report is available from Susan Kolon of Deloitte & Touche, 312/946-2920./
 /CONTACT: Susan Kolon of Deloitte & Touche, 312/946-2920/ CO: Deloitte & Touche ST: Chicago IN: CNO SU: ECO


AH -- NY119 -- 2579 05/20/92 20:07 EDT
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Date:May 20, 1992
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