Bally's Corp has halted construction on the non-gaming aspects of its $1.7 billion casino project in Chicago, a situation that creates significant negotiating challenges for the city, which recently lifted a ban on video gambling terminals in its latest budget. Meanwhile, the situation in Las Vegas appears to be more precarious for Bally's.
In April 2021, Bally's acquired the operations of the former Tropicana Las Vegas for $148 million, with the deal finalized in September 2022. Following this, Bally's and its landlord, Gaming and Leisure Properties (GLPI), agreed to demolish the Tropicana in 2024 to make room for a new Major League Baseball stadium for the Oakland Athletics. This agreement also allows Bally's to develop a new resort on the remaining land.
For nearly a year after the demolition announcement, Bally's provided scant details about its plans for the site, during which it pursued other ventures, including a casino project in New York and a potential acquisition of Australia's Star Entertainment.
Things began to take shape in September when Bally's unveiled designs for a mixed-use complex featuring 3,000 hotel rooms across two towers, a 2,500-seat entertainment venue, and over 500,000 square feet of space for retail, dining, and entertainment options. A rendering of the project suggests it will encircle the stadium area. In December, Bally's filed plans for a four-phase development with a proposed completion date of December 2030 and a budget of $1.19 billion.
As the construction of the A's stadium progresses on schedule for a spring 2028 opening, uncertainty remains about Bally's development plans and financial capability to see them through.
Bally's has made it clear this year that its construction focus lies primarily on developing the retail-entertainment district, rather than the casino or hotel components. Chairman Soo Kim stated at the ICE Barcelona conference in January that the company is prioritizing the creation of a retail-entertainment district before establishing the integrated resort and casino.
This emphasis was echoed by CFO Mira Mircheva and attorney Dan Reaser during a June licensing hearing before the Nevada Gaming Commission. Reaser clarified that the April 2028 deadline is associated with the stadium, not Bally's developments. "To make the record clear, the April deadline of 2028 is for the stadium to open and for the baseball season to proceed," he said. "The April 2028 timeline is for the retail district, parking garage, utilities, and plaza, but not the towers that come at a later date."
Concerns have arisen over the prospect of the new stadium opening amid ongoing construction, prompting the A's to prepare backup plans for their infrastructure if Bally's delays continue. Reports suggest these additional efforts could cost the team $100 million.
Steve Hill, CEO of the Las Vegas Convention and Visitors Authority (LVCVA), pointed out that Bally's may lack the necessary financing for the project and had requested that the company provide a financing plan by August.
This week, Bally's declined to comment on Hill's ultimatum, while the LVCVA did not respond to a request for clarification.
In its first-quarter SEC filing, Bally's reported cash and equivalents totaling $559.3 million, against a long-term net debt of $4.3 billion. The company has not yet released its second quarter results and has filed a Form 12b-25, indicating a delay in those reports, marking two consecutive quarters of late filings. On Wednesday, Bally’s shares climbed 5% to $13.70, although they have decreased about 18% this year.
GLPI plays a significant role in the Las Vegas project as the other key stakeholder. The REIT has invested billions in Bally's endeavors nationwide, including in Chicago. Bally's began leasing the Tropicana site from GLPI in 2022, with lease terms revised post-demolition in 2024. The agreement spans 50 years with options to extend up to 99 years, although Bally’s has indicated that the renewal options may not be exercised at this time.
GLPI has committed up to $125 million for collaborative projects considered beneficial for the Las Vegas site. During GLPI's first-quarter earnings call on July 31, COO Brandon Moore mentioned that Bally's is nearing a more concrete plan for critical infrastructure needed to support the stadium, which may involve access ways and utility conduits. Moore stated, "There may be an opportunity for us to invest more in that property and some of that key critical infrastructure, but we are not prepared at the current time to commit to anything over the $125 million. We’ll continue to work with Bally’s and see if that makes sense."
