Bally’s Reportedly Facing Multiple Investigations, Including Feds, Over Chicago Casino
Posted on: December 3, 2023, 01:44h.
Last updated on: December 3, 2023, 01:44h.
Bally’s efforts to bring a casino hotel to Chicago — the city’s first such venue — could be marred by multiple investigations, potentially including one by the US Attorney’s Office, into the process by which the company won the bidding competition.
Crain’s Chicago Business reported the US Attorney’s Office is looking into complaints from other gaming operators that lost in the Chicago casino competition. The federal agency didn’t confirm the inquiry to the media outlet, but Ald. Brian Hopkins (D-Ward 2) said the investigation is happening. Hopkins has previously vocally criticized former Mayor Lori Lightfoot’s (D-Chicago) handling of the casino bidding race. Earlier this month, the alderman said the $1.7 billion project is now in jeopardy.
Unidentified sources told Crain’s that Chicago Inspector General Deborah Witzburg is also looking into the matter. Her office’s policy is to not comment on possible investigations. A spokeswoman for Bally’s told Crain’s the regional casino operator isn’t aware of any investigations, but there is speculation that both the federal and local inquiries have been ongoing for several months.
The Rhode Island-based gaming company has been operating a temporary casino at Medinah Temple in the River North section of Chicago for over two months. It is aiming to open a permanent casino hotel at the Freedom Center, a 30-acre riverfront property that Tribune Publishing has occupied, in 2026.
Rivals That Could Be Upset About Bally’s Chicago Casino
Lightfoot selected Bally’s as the winning bidder for the Chicago casino license in May 2022 over Hard Rock International — the gaming arm of the Seminole Tribe of Florida — and Chicago-based Rush Street Gaming.
While the Windy City is the third-largest in the US, just four operators submitted proposals to even participate in the competition and the process failed to lure big-name Las Vegas gaming companies, such as MGM Resorts International and Wynn Resorts, due to the onerous tax rates Illinois and the city set for the gaming venue.
Between Hard Rock and Rush Street, it’s not clear which one feels more jilted by Bally’s being crowned the victor in Chicago, but reports have surfaced that Rush Street was charged twice as much as Bally’s to file bids for various potential casino locations.
Additionally and in the tradition of Chicago’s notorious history of political corruption, it’s believed a city consultant that examined the financial health of the bidders raised money for Bally’s and that wasn’t disclosed to aldermen prior to the vote. At the end of the third quarter, the gaming company had $3.44 billion in debt, which is well excess of its current market capitalization of $525.57 million.
‘Worst Decision’
Hopkins previously characterized Lightfoot’s selection of Bally’s as one of her worst decisions, which is saying something given that she was swept out of office after just one term and that her approval ratings were dismal.
He was among seven members of the city council that voted against the choice of Bally’s. The gaming company has drawn the ire of Chicago policymakers on other fronts. For example, Ald. Brendan Reilly (D-Ward 42) in October 2022 lambasted a traffic study conducted by Bally’s for the Medinah Temple casino, bashing the claim that 40% of visitors to the temporary casino will bike, walk, or use public transportation.
Potentially adding to the brewing controversy is the point that the city allowed Bally’s to alter the terms of an agreement with minority that would allow the gaming company to buy those shareholders out of the Chicago project at a price that cannot be negotiated, according to Crain’s.
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Last Comments ( 12 )
If Bally's can't afford Bally's Chicago, they will likely struggle also with trying to finance their planned casino in State College, PA
" A spokeswoman for Bally’s Corporation told Crain’s the regional casino operator isn’t aware of any investigations, but there is speculation that both the federal and local inquiries have been ongoing for several months." Bally's should now consider themselves to be aware!
Unfortunately, all of these shameful events are all too familiar to the citizens of the State College, Pennsylvania area and beyond who are fighting against the location of a comparable casino at the dying Nittany Mall in College Township. One would think that the brains behind it, a former Penn State University Trustee and a few local developers and movers and shakers who joined the fray late motivated by greed and possible future projects, would be ashamed to develop a casino so near to impressionable college students at Penn State and in the heart of a university community where residents value their quality of life. But, no, these are not those people.
I'm in favor of any kind of exposure that can be given to any back-room schemes that could lead to these toxic casinos being built where they aren't wanted.
This breaking news about Bally's Chicago is not that surprising. Bally's often goes all-in without following established best practices for good business decisions. It will be interesting to see what is discovered by these thorough and ongoing investigations.
This is especially concerning since Bally's is being considered for a casino to be built within biking distance to Penn State's main campus---and a short 10-minute ride on a single bus from the university. The community of State College has been voicing its serious concerns about this issue for more than one year and then after reading this article my own personal concerns are now that much stronger.
Given the controversies and poor decisions that have preceded Bally's selection for a casino in Happy Valley, this development is both shocking and not surprising at the same time. Shame on all involved.
Regarding that planned $1.7 billion Bally's Chicago destination casino and hotel that is forecast to open in 2026 -- it probably will not happen. Most certainly not in 2026.
Since this story is now on the "Most Read" list, I'll point out a discrepancy on the Bally's Corporation website. The poor wording is quoted here -- "Upon completing the construction of a permanent casino facility in Chicago, IL, and a land-based casino near the Nittany Mall in State College, PA, Bally's will own and/or manage 17 casinos across 11 states." That planned Bally’s land-based casino "near" the Nittany Mall is actually planned for a vacant former Macy's department store there. When going to shop at the nearest Macy's store, does ANYONE say they are going to the Macy's store NEAR the mall? Please guess why Bally's phrases it that way. Would you be proud to announce to the world that your first land-based casino in Pennsylvania will be located INSIDE a nearly vacant and formerly successful local shopping mall? Certainly not!
If Bally's leaders are convicted of corruption in the way they obtained the license for their Chicago casino, they may very well be disbarred from operating casinos in other states as well.
Bally's leadership remains undeterred by this possible setback. They still hold out hope for a green light to build their first brick-and-mortar casino in Pennsylvania. We're not sure why they picked the bucolic college town of State College, PA though. The small circle of Bally's decision-makers are hoping for regulatory approval from the Pennsylvania Supreme Court to build their brand-new State College casino inside a former Macy's department store just down the road from Penn State University. Did they realize that Nittany Mall location in Happy Valley just happens to be one of those many dying shopping malls without a bright future? That's bound to turn out well, right? Bally's is really hoping to not be embarrassed there either.
Oh my!