Chicago Mayor Expresses Caution Over Bally's Permanent Casino Site
Bally's (NYSE: BALY) displayed an impressive revenue monthly report at its temporary Chicago casino, and it's expected to commence construction on the permanent gambling house at the Freedom Center in the River West area of the city in the coming month. However, Mayor Brandon Johnson (D) mentioned that it's not certain if this project will finish.
Johnson, in an interview with the Chicago Sun-Times editorial board, made remarks suggesting that Bally's has other responsibilities, such as addressing a $800 million finance deficit in the city. This need for financial assistance is one reason why the Mayor can't assure the casino hotel will complete its race.
I wish I could give a clear answer today. I know we're working with ownership to find a solution, like we did with some of the other issues I inherited. I just need it to be sensible... I think that decision is still uncertain, to be honest with you,” Johnson told the Sun-Times editorial board.
Bally's possesses a $500 million credit facility available, with $250 million of that amount being utilized for land at the Freedom Center, which was previously the site of the Chicago Tribune.
Standard General's Takeover Bid May Complicate Chicago Plans
Bally's was granted the only Chicago casino license in May 2022 by former Mayor Lori Lightfoot – a decision that was heavily criticized, including accusations of corruption which some market analysts believed ceased a fair bidding process.
Bally's isn't free of more potential challenges in the Wind City: Standard General, the hedge fund controlled by Bally's director Soo Kim, proposed a $15 per share acquisition of the regional casino operator. The bid continues to be considered, but at least one shareholder cautioned that if it's accepted, it could endanger the Chicago project.
Kim rejects this idea, but with recent credit rating downgrades for Bally's from all three significant ratings agencies, obtaining funding may require paying higher interest rates. These higher rates would create increased interest costs for Bally's, placing increased pressure on the Chicago integrated resort to achieve profit and revenue expectations.
If construction starts as planned in July, the goal is to open in September 2026.
Other Problems for Bally's in Chicago
Bally's encounters another hurdle in the third-largest American city. The site for the hotel remains undecided. Originally, the hotel's location was unacceptable because construction in that section would have damaged underground pipes.
The hotel is crucial for Bally's Chicago casino as it potentially generates a large profit share. There's still $1,1 billion left of the $1.34 billion required to be spent in the city, according to the Sun-Times.
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