Chicago Chefs Expand into Casinos to Diversify Revenue and Reach New Customers

Strategic Insights -

Chicago chefs, particularly celebrity chefs, are partnering with Midwestern casinos to open restaurants and tap into a new customer base, aiming to expand revenue streams and combat declining restaurant visits due to economic uncertainty. This trend mimics the Las Vegas casino restaurant scene, where celebrity chefs have long partnered with casinos to lend their name and culinary prowess. In the Chicago area, chefs are looking to benefit from the restaurants' access to a captive audience and marketing support provided by casino companies.

Key Takeaways:

  • Celebrity chefs are expanding into Midwestern casinos to diversify revenue streams and reach new customers.
  • Restaurants in Chicago have seen a 10-15% decline in traffic and revenue in the first few months of the year amid economic uncertainty.
  • The cost of running a restaurant in Chicago has increased by 35% since 2020, with fixed costs rising 18%.
  • The elimination of the tipped wage in Chicago will push tipped employees' hourly wage up to $12.62 from $11.02 on July 1.
  • For The Fifty/50 Group, getting into the gambling world is "a matter of survival" as it aims to alleviate the impact of the tip credit phase-out.
  • Nickol Bradford, a consultant, stated that, "The food-and-beverage industry has a longer hospitality cycle than the gaming industry, which means casino operators are able to hold onto their guests for more time."
  • Longshots, a country-western restaurant, is attracting crowds who aren't necessarily interested in the races or gambling, with music played five nights a week.
  • Fabio Viviani, a celebrity chef, running the food and beverage options at the Wind Creek Casino, highlighted the challenges of operating in a casino, stating, "If you're running your casino venue the same way you think you're going to run your brick-and-mortar, you're going to fail."
  • Dana Cree, founder of Pretty Cool Ice Cream, stated that building out a new location typically costs her company $250,000, but having the costs covered by the casino makes it more viable.
  • Stephanie Izard, a celebrity chef, developed a new concept called Lucky Goat for the food halls inside casinos, aiming to tap into a new market and provide a lower price point for customers.

Statistics:

  • Restaurant visits in Chicago have seen a 10-15% decline in traffic and revenue in the first few months of the year.
  • The cost of running a restaurant in Chicago has increased by 35% since 2020, with fixed costs rising 18%.
  • The elimination of the tipped wage in Chicago will push tipped employees' hourly wage up to $12.62 from $11.02 on July 1.
  • Dana Cree's company, Pretty Cool Ice Cream, typically spends $250,000 to build, stock, and train staff for new locations.
  • Accel Entertainment plans to invest up to $95 million in the Fairmont Park casino and hotel.

Sources:

  • "Celebrity chefs partner with Midwestern casinos to open restaurants" by Ally Marotti
  • "Chicago chefs expand into casinos to diversify revenue" by Ally Marotti
  • Illinois Restaurant Association (no specific date)
  • Wind Creek Casino (no specific date)
  • Fairmont Park Casino (no specific date)
  • Accel Entertainment (no specific date)