Bally’s Isn’t Producing the Revenue Chicago Expected

Article by : Erik Gibbs Nov 23, 2023

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The newly elected mayor of Chicago, Brandon Johnson, is facing a challenging fiscal landscape as he grapples with his inaugural city budget. A significant factor contributing to this challenge is the underwhelming performance of Bally’s Chicago, the city’s inaugural casino.

Initially, Bally’s Chicago was anticipated to generate $12.8 million in tax revenue for the city from gaming activities in 2023.

However, the actual figures for September and October fall significantly short of this projection, with the city receiving just under $1.5 million in taxes from Bally’s Chicago thus far. The casino commenced operations at its temporary location at Medinah Temple on September 9.

It’s important to note that revenue data is currently available only for the first two months of Bally’s Chicago’s operation, and it was open for only three weeks in September. Nevertheless, early indications suggest that Bally’s is likely to substantially miss its revenue forecasts.

The tax revenue generated from gaming at Bally’s is designated for the pension funds of firefighters and police. In light of the shortfall in tax revenue to support a proposed 3% cost-of-living increase for retired first responders, the mayor has hinted at alternative funding solutions.

The specific strategies to address this shortfall remain uncertain in a city grappling with ongoing budget challenges, including those arising from post-COVID-19 inflation and an influx of asylum seekers.

Illinois boasts 15 casinos, but Chicago, the state’s largest city, has just one. While Illinois online casinos remain illegal, recent legislative discussions indicate potential changes in the upcoming session starting in January.

The anticipation is that tax revenue from online casinos could surpass earnings from physical casinos.

The mid-year budget issued by the Chicago City Office during former Mayor Lori Lightfoot’s tenure in April projected an estimated $34.4 million in gaming tax revenue for 2024, with expectations exceeding $100 million by 2026.

However, construction delays on the new Bally’s casino in River West jeopardize these forecasts.

Mayor Johnson’s inaugural city budget, approved on November 15 with a projected cost of $16.7 billion, calls for a freeze on tax rates but increases spending in critical areas, such as police recruitment.

The city has reportedly lost over 2,000 police officers in the last six years, and funding new personnel remains a contentious issue.

In addition to handling asylum seekers, Johnson allocates $150 million in the first four months, with opponents claiming a monthly cost exceeding $40 million for the city.

Despite the optimistic mood during the ribbon-cutting ceremony for the temporary Bally’s location at Medinah Temple, featuring 800 slot machines and 56 table games, Bally’s CEO Soo Kim’s projections of $50 million in annual taxes from the temporary site and over $200 million once the permanent venue is operational may face challenges.

Early revenue figures suggest the temporary casino could fall short of Kim’s estimates.

As the third-largest metropolitan center in the US, Chicago remains a sought-after travel destination. However, early revenue numbers from Bally’s Chicago are raising concerns despite the city’s popularity and optimistic outlook.