Chicago Mayor Backs Bally’s Amid Challenges for $1.1B Casino Resort Project

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Despite facing formidable challenges, Bally’s, a prominent regional casino operator listed on the New York Stock Exchange, has found an ally in Chicago Mayor Brandon Johnson. This pivotal support comes at a time when the operator grapples with considerable hurdles threatening to derail its proposed $1.1 billion integrated resort in Chicago, the third-largest city in the U.S.

Mayor Johnson has signaled his unyielding backing for Bally’s ambitious endeavor to transform the former Tribune printing plant in River West into a permanent casino hotel. Notably, Bally’s already manages a makeshift casino at Medinah Temple in River North. The Mayor’s office anticipates that the gaming company will honor its pledge, despite recent setbacks.

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Of particular concern is a significant funding deficiency. Bally’s executives recently notified the Nevada Gaming Control Board that they are laboring to bridge an $800 million chasm hindering the project’s completion. This task is further complicated by recent credit downgrades Bally’s has suffered.

Nonetheless, there’s a glimmer of hope; Bally’s confidently predicts the commencement of construction this year, with the grand opening of the permanent casino slated for 2026, as declared in a statement from Mayor Johnson’s office.

Former Mayor of Chicago, Lori Lightfoot, held office when Bally’s was chosen as the victorious bidder for the city’s only casino license. Consequently, many locals and policymakers envision the permanent Bally’s casino as a springboard for job creation and revenue growth for the city.

Complications might arise, however, from a recent acquisition offer from Standard General. It’s feared that if accepted, this could undermine the entire endeavor. Bally’s director, Soo Kim, controls the hedge fund, which has promised to complete the casino project if the acquisition proceeds. Nevertheless, apprehension remains rife among investors and residents regarding the project’s fate if the regional casino goes private.

Amplifying these concerns, K&F Growth Capital, a California-based investment firm owning 1% of Bally’s shares, recently penned a letter to Bally’s board. The firm cautioned that the gaming company may have overreached with its “moon shot bets” on major casino ventures, including the Chicago project.

K&F suggested Bally’s court Chicagoan collaboration to mitigate risks, while proposing the sale of Tropicana Las Vegas’ operating rights for cash generation. The firm further urged Bally’s to abandon its bid for a New York City casino license. However, Mayor Johnson’s office has remained steadfast in its detachment from these investor disputes.

Even though Bally’s has not currently divulged plans to find a partner in Chicago, such a move could be strategic to limit its financial vulnerability. Amid heightened investor concerns about the operator’s credit, the prevailing assumption among analysts is that Bally’s will rebuff Standard General’s takeover proposal and press ahead with their Chicago project.

If this fails to materialize, Chicago has a contingency plan in the form of Hard Rock International and local contender Rush Street, both runners-up in the license bid that Bally’s won. However, it’s generally perceived that the most efficient and preferable outcome for the city would be for Bally’s to fulfill its commitments.