Following the authorization by the City Council of slot routes within Chicago, Accel Entertainment announced it is “evaluating the potential” of the Windy City market. Accel distributes electronic gaming terminals and made the announcement January 8.
Although Accel estimates it will take a full decade for the Chicago market to mature, the company believes it could start seeing a return by the fourth quarter of this year. The move would bring it into competition with Bally’s Casino at Medinah Temple downtown. Bally’s Corp. is presently mulling extending its business into slot lounges at Midway and O’Hare airports.
According to Chicago’s City Council Office of Financial Analysis, video gaming terminals (VGTs) would generate $64 million a year in annual tax revenue for the city. Extrapolating from that analysis, Accel projects a $1 billion-per-year VGT industry in Chicago at maturity, augmenting $3 billion a year derived from slot routes elsewhere in Illinois.
Added Accel, “VGT operators currently receive a statutory split of GGR equal to 32.04 percent, which would translate into approximately $320 million of expected incremental Net Terminal Income for the licensed VGT operator community operating in Chicago.”
Continued the formal statement, “From a capital deployment perspective, Accel believes it is well positioned to leverage its strong balance sheet, existing fixed operating infrastructure, route management capabilities, and fixed asset base to capitalize on opportunities in a Chicago VGT market, subject to customer acquisition rates and final regulatory requirements.”
The company said it would evaluate its capital-deployment strategy to take Chicago’s population of 2.7 million into account, inclusive of “marginal costs to service new accounts.”
According to Accel, the firm has deployed 28,000 machines to approximately 4,520 locations nationwide, covering 10 states. The company also owns and runs a racino (Chicago’s Fairmount Park), in addition to supplying bars, restaurants, convenience stores, truck stops, gambling cafes, and fraternal and veteran establishments with VGTs.