Bally’s Under Fire From Federal Authorities Over Chicago Casino Deal

Article by : Erik Gibbs Dec 7, 2023

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Bally’s acquisition of the highly sought-after Chicago casino license is now under intense scrutiny at both the federal and local levels. According to Crain’s Chicago, the U.S. attorney’s office is leading a federal investigation into the process, prompted by complaints from unsuccessful bidders in the casino licensing competition. The inquiry aims to assess the fairness and integrity of the licensing procedure.

Alderman Brian Hopkins, a vocal critic of former Mayor Lori Lightfoot’s handling of the casino proceedings, has verified the existence of the federal inquiry. This development suggests concerns about potential irregularities or improprieties in the awarding of the casino license.

Simultaneously, a parallel investigation is reportedly in progress, led by Chicago Inspector General Deborah Witzburg. This local inquiry adds a layer of scrutiny to the process, underscoring the significance of the matter within the city’s governance.

In summary, Bally’s securing of the Chicago casino license is facing comprehensive examination, with a federal investigation initiated by the U.S. attorney’s office and a parallel inquiry conducted by Chicago Inspector General Deborah Witzburg, highlighting the potential legal and procedural implications surrounding the licensing process.

Deborah Witzburg, following standard office protocol, chose not to provide any comments on the matter, and attempts to elicit a response from the U.S. attorney’s office were met with silence.

In contrast, Joanna Klonsky, spokesperson for Mayor Lightfoot, and Samir Mayekar, who oversaw the casino bidding process at the time as Deputy Mayor, asserted their lack of knowledge regarding any inquiry.

They dismissed the notion of an investigation as mere speculation fueled by disgruntled losing bidders spreading unfounded rumors.

Bally’s, the Rhode Island-based gambling company at the center of the casino license acquisition, has publicly stated that it is not aware of any ongoing investigation into the matter.

Clarifying the city’s position, the Law Department has explicitly stated that neither they nor the mayor’s office have received subpoenas or requests for information about the casino licensing process.

This assertion provides clarity on the legal interactions between the city administration and any investigative bodies.

Bally’s encountered controversy earlier in its pursuit of the coveted Chicago casino license. An eyebrow-raising move involved the modification of its financial deal with minority investors, introducing a clause allowing the purchase of minority shares at a predetermined, non-negotiated price post-casino opening.

Additionally, reports surfaced regarding discrepancies in fees charged to different bidders and conflicts of interest involving city consultants evaluating financial prospects.

Despite these contentious issues, the casino managed to secure City Council approval with an overwhelming 39-5 vote. The ambitious project, estimated at $1.7 billion, is positioned to address the city’s unfunded public employee pension liabilities.

Bally’s has already inaugurated a temporary casino in September at the former Medinah Temple, with construction on the permanent site slated to commence soon, aiming for an opening in late 2026.

The concept of a Chicago casino has been a lingering notion for decades, viewed by certain city leaders as a potential financial lifeline. However, substantial progress on the proposal only took shape in 2020.

Alderman Walter Burnett, who represents the designated area for the casino, recognized the importance of the achievement.

Burnett emphasized that the successful realization of the long-sought-after project, pursued by three administrations, was now accomplished under Mayor Lightfoot’s leadership, attributing credit to her for its success.