Bally’s Chicago has put a stop to the construction of its ambitious $1.7 billion resort casino, seemingly intensifying the ongoing conflict with city officials over slot-like video gaming terminals (VGTs).
On August 9, Bally’s Corporation informed the Chicago Community Builders Collective (CCBC) about its decision to pause construction on the 34-story hotel and various non-gaming facilities. The permanent casino is still expected to open in early 2024 in the River West area.
This unexpected announcement comes amidst Bally’s ongoing battle against the city’s efforts to authorize VGTs in bars, taverns, restaurants, truck stops, and veteran organizations. Bally’s argues that the City Council’s support for VGTs breaches the Host Community Agreement established in June 2022 during Lori Lightfoot’s mayoral term, which prohibits any additional casino-style gaming within city limits.
“The uncontrolled growth of VGTs contradicts the City’s commitment to limit gaming expansion as per the Host Community Agreement, creating uncertainty that could negatively impact Bally’s Chicago,” the organization stated in a release.
Mayor Brandon Johnson, who has been in disagreement with the City Council regarding VGTs, did not provide immediate comments on the matter on Sunday.
Bally’s Tactics?
Bally’s has indicated to the CCBC that it is “resetting the pace of construction” on certain components of the $1.7 billion venture. Although the 34-story hotel structure has already been completed as of May, Bally’s has invested hundreds of millions of dollars in borrowed funds primarily from the resort’s future landlord, Gaming & Leisure Properties, Inc.
It’s speculated that Bally’s may be leveraging the construction halt as a negotiating tool in its aim to keep Chicago free from VGTs. According to the Chicago Tribune, Bally’s is also considering withholding its annual $4 million payment to the city due in September unless there is a reconsideration of the City Council’s stance on VGTs.
In late June, Bally’s hired Lightfoot’s legal team, Fahner Rosenberg (previously RFK Global), to assist in navigating the ongoing VGT issue.
“To escalate our efforts in safeguarding our investment in the city, we are collaborating with the strategic counsel at RKF Global, where former Mayor Lightfoot serves as a partner,” Bally’s stated. “We are delighted to have assembled an experienced and insightful team here in Chicago.”
Bally’s Chicago is envisioned as a casino featuring 3,400 slot machines, 170 table games, and a sportsbook. Additional amenities include a 500-room hotel, a 3,000-seat theater, multiple dining and drinking establishments, and a public park along the Chicago Riverwalk.
The temporary Bally’s Chicago casino has been operating out of the Medinah Temple since September 2023.
Casino Exclusivity
Bally’s secured Chicago’s highly sought-after downtown casino resort license, granted through state legislation in 2019. The selection committee, overseen by Lightfoot, opted for Bally’s over other contenders such as Hard Rock International and Chicago-based Rush Street Gaming.
Bally’s agreed to a one-time payment of $40 million upon winning the bid and an annual contribution of $4 million to the city. The company also committed to generating 3,000 construction jobs and 3,000 permanent positions.
Bally’s representatives assert that these commitments were made based on the understanding of gaming exclusivity.
“Our bid was significantly influenced by the promise of exclusivity. Had we known we wouldn’t have that guarantee, our proposal would have looked entirely different,” stated Christopher Jewett, Bally’s senior vice president of corporate development. “Exclusivity was assured.”