Bally’s Corporation provided an update on its planned permanent casino in Chicago during a brief eight-minute conference call on Monday. Chairman Soo Kim and Wanda Wilson, chair of the Bally’s Chicago board, addressed concerns about the project’s future amidst the city’s recent legal changes regarding video gaming terminals (VGTs).
In August, Bally’s announced it would be "resetting the pace of construction" for non-gaming components of the casino, triggered by the legalization of VGTs earlier this year, which Kim reaffirmed on the call.
Kim emphasized the importance of this call, stating its aim was to clarify reports suggesting that construction had halted or slowed down unnecessarily. "Construction continues every day, and there are approximately 1,000 skilled tradespeople working on the construction of the permanent Bally’s Chicago resort," he said.
He confirmed that the target remains to open the casino in early 2027, though there are adjustments in the scheduling of certain development aspects. Kim noted that the company is "over-delivering" on its commitments to the city, and announced forthcoming tours of the construction site for investors and shareholders.
"Investors should view our actions through a straightforward lens: We are protecting the value of significant investments we’re making in Chicago while faithfully executing our contractual obligations," he added, reiterating the company's commitment to Chicago.
During a recent meeting of the Chicago City Council’s License Committee, Bally's president and interim chief financial officer, George Papanier, indicated that the company would deliver the event center, 100 hotel rooms, and necessary food and beverage components by early 2027. However, the company is reassessing around 12% of the project’s planned amenities due to concerns that VGTs could impact revenues, given the hotel will ultimately have 500 rooms.
Earlier this year, the city council legalized VGTs as part of its budget, which Mayor Brandon Johnson opposed but was overridden by the council majority. The debate surrounding VGTs remains a contentious issue, as Johnson has yet to share his views on whether Bally's will meet its opening schedule. He did indicate a commitment to projects, including Bally’s Chicago, that promote economic development and job creation across various neighborhoods. "We appreciate Bally’s partnership and the thousands of construction workers helping bring Bally’s Chicago Casino to life – a major investment in our city’s future," Johnson stated in a post on X.
This year, the Illinois Gaming Board approved 65 VGT license applications within the city. VGTs have become the highest-grossing segment of gaming in Illinois, generating more revenue than traditional casinos. Papanier explained that the elements of Bally's project being "reset and re-contemplated" are due to the proliferation of VGTs, which could potentially hurt top-line revenue by 30% to 50%. He stressed that it would be "irresponsible" to advance construction until clearer market conditions emerge.
In trading on Monday, Bally’s stock rose 7% to $9.84, recovering slightly after a 30% drop over the previous month amid uncertainty and concerns raised in the company’s Q2 earnings report. This uncertainty was compounded by the recent resignation of former CFO Mira Mircheva, making way for Papanier’s interim appointment.
Bally’s has faced challenges since securing Chicago’s sole casino license in 2022, including project halts due to unapproved contractors and funding gaps that were eventually bridged through an agreement with Gaming and Leisure Properties. Additionally, potential conflicts with city water lines led to significant redesigns of the hotel. The Illinois Gaming Board had previously ordered work to stop following allegations linking an unapproved contractor to organized crime.
To date, Bally’s has been granted two years’ worth of extensions for the project, with the Illinois Gaming Board allowing an extra year in June 2023, resulting in a new deadline of September. If these extensions had not been secured, Bally’s would have had to cease operations at its interim casino at Medinah Temple, resulting in revenue loss. Kim had indicated previously that such a closure would not be catastrophic.
Meanwhile, Bally’s is progressing on an even larger project, the $4 billion Bally's Bronx resort in New York City, one of three license winners announced last year. On Monday, the company disclosed it had secured $560 million in financing from WhiteHawk Capital Partners to further develop the Bronx project and support corporate needs. This funding is set to close this quarter, facilitating ongoing pre-construction planning and contributing to the overall financing strategy.
Bally’s has indicated it plans to start construction eight to nine months after receiving the license, with a target for a single-phase opening by 2030 if all goes as planned.
