Bally’s Chicago Revenues Below City Expectations in 2023

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Bally’s temporary casino at Medinah Temple in Chicago, which opened in mid-September, reported a profit of nearly $30.4 million by the end of December.

According to the latest data release from the Illinois Gaming Control Board, the Chicago venue made $8.5 million in gross revenue for December and paid $1.9 million in state and local taxes.

But extrapolated over the year, it is a lot less than former Mayor Lori Lightfoot’s administration anticipated.

The city made about $3.1 million in taxes off this sum, significantly less than the $12.8 million it had been counting on.

It represents less than a quarter of the expected income for the city, from which it has earmarked funds for its nearly insolvent police and firefighter pension funds.

Despite this underperformance, Bally’s did pay the city an upfront fee of $40 million for the license. The operator also plans to reinvest much of the profits of its venture into financing its $1.7 billion permanent addition to the list of Illinois casinos, which it has planned for downtown Chicago.

The application process that led to Bally’s being granted the license is also under review by local and federal authorities. That’s after complaints from unsuccessful applicants Rush Street Gaming and Hard Rock.

Factors Affecting Performance

To be fair to Bally’s, the opening of the temporary Medinah Temple venue was heavily delayed by approximately three months because of state regulatory hurdles, which also hampered marketing efforts and limited operational hours. The opening weekend also saw a shooting just blocks from the venue.

Bally’s executives have cited these factors as reasons for the lackluster early returns. The casino now operates 24/7, which the operator says should improve the situation. The casino is anticipated to remain operational through September 2026 while a permanent site is constructed at Chicago Avenue and Halsted Street.

As reports emerged on the revenue release this week, Bally’s management also issued a statement.

“Bally’s continues to build its relationship with Chicago gaming customers by offering our guests new and convenient ways to visit the property,” said Bally’s VP & GM Mark Wong.

“We’ve added free parking, new promotions, and expanded hours to meet customers’ expectations. In December, we saw our highest attendance and revenues to date.”

Somewhat controversially, Bally’s also added a free shuttle bus service to the venue, bringing customers in from various Chicago neighborhoods, including Chinatown.

Improvements Not Yet Enough

After all that, December did indeed see the casino’s highest attendance and revenues since opening. Nearly 100,000 visits yielded approximately $8.5 million in revenue, translating into about $865,000 for the city.

The Chicago casino quickly became the second-most visited of all 15 casinos in Illinois, only trailing Rivers Casino in Des Plaines.

However, to meet new Mayor Brandon Johnson’s 2024 budget expectations, which anticipate $35 million for public safety pension funds, Bally’s revenue generation will need to significantly increase.

The Civic Federation, a local government finance think tank, cautioned that casino revenue may not be a reliable long-term financial solution, advising the city to budget cautiously and develop contingency plans for future pension contributions.

As it stands, Bally’s landlord at Medinah Temple has earned more from the temporary casino than the city pension funds, with more than $3.8 million paid in rent since December 2022.

Bally’s chairman Soo Kim had initially wanted to build the temporary site in an adjacent building to the permanent project in River West, but chose Medinah Temple at the urging of Lightfoot’s office.

In 2024, Bally’s and the city of Chicago expect $242.7 million in revenues and $34 million in taxes from the venture. This would require the casino to improve on its record December 2023 by roughly 30%, and then hold that up, or better it, throughout the year.

Construction on the permanent casino is slated to begin this summer, with the grand opening scheduled for 2026.

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