Bally's Delays Temporary Opening of Chicago Casino to September
Bally's (NYSE: BALY) is experiencing a setback in its plans to launch a temporary Chicago casino, revealing it won't be ready until September.
During their second-quarter earnings report, Bally's explained that the temporary venue, to be located at Medinah Temple in the River North area of Chicago, had initially been expected to open in July or August. However, CFO Marcus Glover announced a delay in their operations, stating, "We're a bit behind schedule from what we communicated the last time regarding opening."
Built in 1911, the Temple was approved by the Illinois Gaming Board (IGB) in June, sparking hope that it would be operational by summer. Currently, the property, located at 600 N. Wabash Ave., has undergone various uses since its construction and has been idle since 2020.
A Preview of Bally's Temporary Gambling Experience in Chicago
Despite a few setbacks, the temporary casino is nearing completion. Electronic gaming devices are set up, and Bally's is in the process of testing wagering operations. Once these tests are passed, approval from the city could lead to the temporary venue's opening.
This temporary project serves as a precursor to Bally's $1.7 billion permanent integrated resort, scheduled to launch in 2026. The first casino-hotel in Chicago and Bally's priciest endeavor, this development is viewed by analysts as a possible long-term catalyst for the operator's shares.
Chad Beynon, a Macquarie analyst, outlined in a report to clients, "Beyond 2024E, we believe EBITDAR growth should continue and significantly increase once BALY opens the ~$1.7bn Chicago CBD property in June 2026. We currently ascribe a $1 value to this project, but it could reach up to $7 in value if successful."
The Importance of Fast-Tracking the Casino's Opening
The importance of speeding up the process of opening the temporary and permanent casinos cannot be overstated, given the financial strain facing both Chicago and Illinois. Williams explained that a timely opening would "generate jobs, income, and corporate taxes vital to a financially beleaguered city and state facing severe public employee pension issues."
Estimates place Chicago's 2023 earnings from Bally's at $70 million, including an initial $40 million payment. Bally's has forecast that the temporary casino could generate $15-$25 million in revenue for the remainder of 2023, with monthly earnings projected at $3.5-$5 million from September to December. In anticipation of the temporary casino being operational for the entire year in 2024, the company predicts earning $50-$60 million.
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Source: www.casino.org
