Bally's Chicago: Gambling on the Windy City
Chaotic and Difficult Urban Scene in Windy City
Bally's, the global gaming giant, finds itself in a bind with its ambitious venture into Chicago. In a fiercely competitive market, Bally's won the city's license in 2022, but the road to success has been anything but smooth sailing.
To begin with, Bally's was selected by then-Mayor Lori Lightfoot out of three contenders - Hard Rock, Rush Street, and Bally's herself. The bid was based on projected revenues of $800 million a year in adjusted gaming revenue, a figure that was enticing enough to secure the license. However, the path to that revenue has been far from straightforward.
Chicago, being the third largest city in the US, is undeniably attractive but also expensive. When initial feelers were put out, the response was lackluster, with top-flight gaming companies failing to express interest. The subsequent lowering of the proposed tax rate from 70 percent to 40 percent didn't quite sway them either. Nevertheless, Bally's, with its eyes on world domination, saw this as an opportunity to make a mark.
Bally's history dates back to its days as BLB Investments, owners of Lincoln Park in Rhode Island – a humble dog track with slots. In 2007, it transformed Lincoln Park into a full-fledged casino, rebranding it as Bally's Twin River Lincoln. From there, Bally's expanded its portfolio, venturing into Mississippi and beyond. By 2024, the company had 19 casinos in 11 states, a golf course in New York, a racetrack in Colorado, and a presence in the digital gaming and sports betting markets. The latest addition to its empire? A casino in Great Britain, followed by the acquisition of Star Entertainment in Australia last month. In 2024, Bally's revenue was a staggering $2.45 billion.
However, Bally's ambition seems to have blinded it to the unique challenges posed by the Chicago market. Much like Harrah's (now Caesars) in the 1990s, Bally's stretched a little too far to achieve its goal, potentially overlooking the value of Chicago as a license. In the 90s, Harrah's New Orleans opened after seven years of hard work, but the property never quite lived up to expectations, largely due to an unrealistic assessment of the market and an overpriced investment. As of now, Bally's may find itself in a similar predicament.
Bally's temporary casino, set up in Chicago's Medinah Temple in September 2023, is producing around $10 million a month in gross gaming revenue. This figure pales in comparison to the projected revenue of the permanent facility and fails to impress the press, who are quick to remind everyone of this fact every month. However, this is not Bally's only concern.
Construction issues, site problems, re-drawn designs, and a halt in construction due to an environmental incident have plagued Bally's Chicago project. In December 2024, construction was halted for nearly a month after a polluting accident on the Chicago River. Since then, the Illinois Gaming Board has ordered another halt, citing potential ties between a waste hauling subcontractor and the mafia. These delays are causing considerable concern, as the project is on a tight deadline, with a grand opening slated for September 2026.
Competition isn't making things any easier. Wind Creek Chicago Southland, a new casino in the suburbs, has quickly jumped to number two in the state's gambling revenue charts, putting pressure on Chicago's casinos. Rivers Des Plaines, the market leader, currently earns about three times more revenue than its competitors. With nine casinos clustered around the Chicago core and thousands of video lottery terminals scattered throughout, the competition is fierce. Two more casinos are due to open in the area, further intensifying the competition.
So, is Bally's Chicago project the penultimate prize in gaming, as some might see it, or a treacherous quicksand waiting to swallow the unwary? Only time will tell.
Enrichment Insights:
- Construction Halt Due to Regulatory Concerns:
- The Illinois Gaming Board has ordered another halt on construction, citing potential ties between a waste hauling subcontractor and organized crime[5].
- Legal Challenges:
- Bally's is facing legal issues related to its IPO. The company initially offered shares primarily to women and minorities, which was challenged on discriminatory grounds. Consequently, Bally's has broadened its IPO criteria to include Chicago and Illinois residents[6].
- Financial Issues and Pressure on Bally's:
- Bally's is facing financial challenges, including rising debt and disappointing revenues at its temporary casino. Despite these issues, Bally’s plans to self-fund if necessary and hopes to regain investor support under revised terms. The casino is seen as crucial for boosting the city's financial situation, particularly its underfunded pensions[7].
- Competition:
- Wind Creek Chicago Southland, a new casino in the suburbs, has quickly jumped to number two in the state's gambling revenue charts. Rivers Des Plaines, the market leader, currently earns about three times more revenue than its competitors. With nine casinos clustered around the Chicago core and thousands of video lottery terminals scattered throughout, the competition is fierce[8]. 5. Impact on River West:
- The overall construction timeline remains tight for the Bally’s Chicago project. Any delays could impede the completion of the casino by the planned deadline, affecting related developments in River West[9].
- Despite its meteoric growth over the years, Bally's, the global gaming giant, faces daunting challenges in its ambitious venture in Chicago, a city known for its competitive market.2.Initially, Bally's was selected by then-Mayor Lori Lightfoot over Hard Rock, Rush Street, and itself based on a projected revenue of $800 million a year, but the path to that revenue has proven to be difficult.3.The Chicago project of Bally's has been beset by numerous issues, including construction delays due to regulatory concerns over potential mafia ties, legal challenges concerning its IPO, and financial struggles including disappointing revenues at its temporary casino.4.Being the third largest city in the US, competition in Chicago's casino-and-gambling market is fierce, with Wind Creek Chicago Southland quickly moving up the revenue charts and two more casinos due to open in the area.5.Casino personalities, investors, and city officials closely watch the progress of Bally's Chicago project, as its successful opening could provide a significant boost to the city's financial situation, particularly in addressing underfunded pensions.
