For 30 years, Chicago’s mayors were betting a casino might be the answer to the city’s budget woes. But new numbers indicate that gamble may not be paying off as hoped.
The temporary Bally’s casino in River North’s Medinah Temple brought in just over $3 million in tax revenue last year. That’s almost $10 million short of what former Mayor Lori Lightfoot’s administration projected.
“The Chicago casino’s results are disappointing, in large part because the opening was delayed,” said David Greising, president of the Better Government Association. “But the picture is darker than just that. Casino gambling in Illinois overall is facing serious challenges, with the smaller casinos in particular under pressure as the large ones — Rivers in Des Plaines and now the downtown Chicago casino — eating up an ever-larger share of the gambling dollar.”
Revenue from the Chicago casino is earmarked to fund the city’s police and firefighter pensions.
“The shortfall is not good news for the city’s pensions,” said Deborah Carroll, director of the Government Finance Research Center at the University of Illinois Chicago College of Urban Planning and Public Affairs. “The casino is a great revenue source to use for funding pensions because it exports the tax burden, meaning at least a portion of the tax revenue generated from casino operations comes from individuals who do not live in the city. If casino revenues fall short, the city may need to either increase existing taxes or find alternative revenue sources to fully fund the pensions.”
Ald. Brian Hopkins, whose 2nd Ward includes the Gold Coast, Streeterville and River North, has doubts about the expected 2026 opening date for the permanent casino, which lies along the Chicago River at the site of the Chicago Tribune printing plant.
A new potential delay became public last week when Bally’s announced it needed to relocate the proposed 500-room hotel at the site of the permanent casino to a new location on the 30-acre property, to avoid damaging the city’s water pipes.
“The target date for construction of the new permanent casino seems optimistic at best,” Hopkins said. “The temporary casino is underperforming. Bally’s has already reduced their overall project cost estimate from $1.7 billion to $1.3 billion. If Bally’s financial condition does not improve, their ability to raise the needed capital to begin construction on schedule remains in serious doubt.”
Greising also has concerns about Bally’s financial stability.
“Bally’s Corporation is not faring well,” Greising said. “The company lowered its earnings guidance and announced layoffs after losing money in the quarter that ended in November. This has caused some speculation the company might downsize its plans for Chicago. But the planned $1.7 billion Chicago casino development is one of Bally’s key projects worldwide, and management seems committed to its success.”