Accel Entertainment Eyes Growth in Chicago’s New VGT Market
Accel Entertainment is assessing the feasibility of expanding its distributed gaming operations into Chicago, following reports that the city may soon allow Video Gaming Terminals (VGTs) in licensed establishments.
The City Council Office of Financial Analysis (COFA) has estimated that the proposed framework for VGTs could generate approximately $64 million in incremental annual tax revenue for the City of Chicago. Based on existing legislative revenue splits, and further stated in the COFA’s analysis, these estimates suggest a total annual Chicago VGT gross gaming revenue (GGR) of $1B incremental to the existing $3B generated in the rest of the state, once fully implemented, which they note in their analysis may take up to 10 years based on previous studies. VGT operators currently receive a statutory split of GGR equal to 32.04% which would translate into approximately $320 million of expected incremental Net Terminal Income for the licensed VGT operator community operating in Chicago.
The Company expects that a Chicago VGT market could begin generating revenue for Accel as early as the third or fourth quarter of 2026, following completion of the legislative, regulatory, and implementation processes, with a gradual ramp-up toward steady-state performance over time.
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.
In anticipation of the finalization of Chicago’s VGT regulatory and operating framework, Accel will continue to assess its capital deployment strategy for Accel’s expected participation in a Chicago VGT market, including ramp timing, and marginal costs to service new accounts.
Accel will continue to monitor developments closely and plans to update the investor community as appropriate as the regulatory and operating framework emerge.
