Bally’s Planned Chicago Casino Under Scrutiny from Many Sides
The future of Bally’s proposed $1.7 billion casino resort in Chicago (renderings pictured) has become somewhat unclear in recent weeks. That’s just months after it launched its temporary Medinah Temple casino venue in the Windy City.
Amid rumors that the prospective Illinois casinos from the licensing process are preparing to legally contest the outcome, City Alderman Brian Hopkins has also expressed doubts about the project’s viability.
The U.S. attorney’s office and Chicago Inspector General Deborah Witzburg are reportedly conducting parallel inquiries.
These investigations were triggered by complaints from Rush Street Gaming and Hard Rock International, who both applied alongside eventual license winner Bally’s.
The focus is on potential irregularities and conflicts of interest during the selection process. Despite these investigations, Bally’s maintains that it is unaware of any ongoing inquiry, and city officials have not been subpoenaed or asked to provide information.
On top of those potential legal problems for Bally’s, the Medinah Temple venue has not lived up to its early promise, with customer numbers declining in recent weeks. If Bally’s was relying on the revenue from this venue to finance the larger $1.7 billion casino, as Alderman Hopkins has suggested, the future of the project could be in jeopardy.
Controversial Selection
The selection of Bally’s as the winning bidder by former Mayor Lori Lightfoot in May 2022 was a contentious decision, overshadowing rival bids from Hard Rock and local Chicago-based Rush Street.
The process failed to attract any bids from the major Las Vegas-based U.S. casino operators, largely due to Illinois and Chicago’s high tax rates for gaming venues. Additionally, there are concerns about Bally’s financial health, given its significant debt, which stands at $3.557 billion as of Q3 2023.
In its recent report for the quarter, the company posted rising revenues, but still made a net loss of $61.8 million over the period.
It has been also been reported by local media that the Feds may be investigating a link between Bally’s and an accounting consultant employed by the city to evaluate the financial health of bidders for the casino license.
Despite the challenges around Bally’s, the City Council approved the project with a decisive 39-5 vote, pinning hopes on the casino to alleviate the city’s unfunded public employee pension liabilities.
If that gamble does not pay off, the failure will be another mark on the one-term tenure of former Mayor Lightfoot. Earlier in 2023, she became the first Chicago Mayor since 1983 to not be reelected for a second term, gaining only 16% of the vote against eventual winner Brandon Johnson’s 21.63%.
Future Competition
The coming months will be crucial in determining whether the ambitious casino project will eventually materialize. Bally’s has already spent tens of millions on the temporary Medinah Temple venue, as well as acquiring the lease for the 30-acre Freedom Center site where it intends to build the permanent resort.
Any proven allegations of a corrupt bidding process, especially in a city that has such an infamous past on this kind of thing, would almost certainly put the blinkers on the permanent Bally’s casino. It may even end the possibility of any Chicago casino venue in the near future.
Meanwhile, potential competition in the Illinois casinos market has been ramping up in recent weeks. After being granted a license earlier in the year to move its riverboat casinos in the state inland, Penn Entertainment recently broke ground on the relocation of the Hollywood Casino Aurora, which is set to open about half an hour’s drive from Bally’s venue in Downtown Chicago.
The new Hollywood venue, set to open in 2024, will also feature a shiny addition to the list of Illinois retail sportsbooks – something Bally’s Medinah Temple casino did not.
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