Bally’s Continues To Miss Casino Revenue Targets at New Chicago Property

Article by : Erik Gibbs Jan 11, 2024

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Bally’s fell below revenue estimates for Chicago’s first casino, posing a challenge to Mayor Brandon Johnson’s 2024 budget expectations.

The temporary casino at Medinah Temple, active from mid-September to December, generated a $30.4 million profit, contributing $3.1 million to the city. This figure significantly lags behind the $12.8 million projected by former Mayor Lightfoot’s team.

The city’s share, intended for police and firefighter pension funds, faces a shortfall, yet Bally’s adhered to terms, including a $40 million upfront fee. Despite delays due to state regulations, Bally’s secured casino approval, prevailing over two competitors in 2022.

The temporary casino faced delays, opening about three months later than initially planned due to various state regulatory obstacles. These challenges, which persisted until recent weeks, also impacted marketing initiatives and operational hours.

Bally’s executives attribute the initial subdued performance of the River North casino to several factors.

The casino, now operating around the clock until September 2026, is expected to continue its services while a permanent site is under construction at Chicago Avenue and Halsted Street.

General Manager Mark Wong emphasized Bally’s commitment to enhancing its relationship with Chicago gaming customers.

The casino has introduced amenities such as free parking, new promotions and extended hours, aligning with customer expectations.

December marked a significant uptick, with nearly 100,000 visits and revenues of about $8.5 million, contributing approximately $865,000 to the city, according to gaming board records.

Within its initial four months, the Chicago casino has emerged as the second-most frequented among the state’s 15 casinos, with only Rivers Casino in Des Plaines surpassing it in attendance and revenue.

Rivers Casino recorded an impressive $45.4 million from over 279,000 admissions in December.

However, Bally’s must significantly boost its performance to align with Mayor Johnson’s budget expectations, anticipating $35 million from the casino for public safety pension funds. This figure exceeds Lightfoot’s earlier projection for 2024.

Bally’s, which generated about $26,779 per day for the city in its initial months, needs to triple this rate to meet Johnson’s 2024 budget target. Johnson acknowledges the positive revenue trend at Bally’s temporary facility, emphasizing its contribution to the local economy, job creation, and overall business environment.

Despite this optimism, the Civic Federation, in its annual budget review, cautions that relying on casino revenue can be unstable over the long run, urging the city to develop contingency plans for future pension contributions.

Bally’s Corporation has paid River North developer Albert Friedman over $3.8 million in monthly rent since their lease began in December 2022 for the temporary casino at Medinah Temple.

The corporation is also responsible for property taxes and management fees. Although initially considering River West, they chose Medinah following Lightfoot’s office recommendation.

Friedman, who leased office space for political campaigns, played a role in the site selection. Lightfoot’s representatives deny her involvement. Construction on the permanent casino is expected to start in the upcoming summer.