Chicago Mayor Lori Lightfoot selected the $1.7 billion Bally’s proposal for a casino and hotel at the Tribune publishing plant in River West on Thursday as the finalist to recommend to the Illinois Gaming Board for the city’s downtown license.
Bally’s, which originally submitted two identical proposals to the city and had its McCormick proposal cut when the city narrowed the field from five to three in March, beat out proposals submitted by Hard Rock and Rush Street Gaming via Related Midwest. The selection of Bally’s is somewhat of a surprise given Rush Street Gaming was founded by Chicago native Neil Bluhm and operates Rivers Casino, the highest revenue-generating casino in Illinois — located just outside the city, near O’Hare International Airport.
Unlike Rush Street and Hard Rock, Bally’s does not have any issues of revenue cannibalization from operating other casinos in the area. Rivers is approximately 20 miles from downtown Chicago, while Hard Rock opened a casino in Gary, Indiana — less than 35 miles from the city — barely one year ago. The city has made repatriating an estimated $331 million in casino revenue annually from the Hoosier State a priority with the downtown casino. All of these players also own legal online casinos in other states.
“I am proud to announce that Bally’s Corporation will create a world-class entertainment district in our city that will delight residents and tourists alike,” Lightfoot, who is widely expected to run for reelection in February, said in a statement. “Following significant analyses and community input on all aspects of our three finalists for Chicago’s casino license, the selection committee and I have chosen Bally’s to move forward in the development of the City’s first integrated casino resort. We are confident that Bally’s Tribune Publishing Center development will shore up the City’s pension funds, create thousands of good-paying jobs, and lead to a bright financial future for our city.”
The Special Committee on the Chicago Casino will meet Monday to discuss Lightfoot’s decision to advance Bally’s as the finalist, and the next full City Council meeting where a vote could take place is scheduled for May 23. The city will also host a community engagement forum at the University of Illinois-Chicago on May 12 in which local residents will likely have the ability to voice their opinions. Each session held with the three finalists last month drew many objections about the planned casinos from those in their respective neighborhoods.
Big-bucks revenue projections
Bally’s River West selected as Chicago’s first casino https://t.co/i8zvfyd3gq
— Melissa Berman (@MZBerman) May 5, 2022
The city has projected $200 million annually in tax revenue from a casino that would have an adjoining hotel, and those tax receipts would directly address shortfalls in the city’s police and fire pensions per state law. In its presentation to the city, Bally’s projected annual revenue of $192 million at full maturity in year six of operations, the highest of the three finalists.
“We would like to thank Mayor Lightfoot and her office for conducting a tough, but fair, RFP process, and selecting Bally’s Chicago as the final bidder for the City’s casino,” Bally’s Chairman Soo Kim said in the joint statement from the mayor’s office. “Chicago is a unique and vibrant city, deserving of a world-class gaming and entertainment destination that is of, by, and for the people by driving the local economy, supporting local labor, creating multigenerational wealth for minority investors, and showcasing the best of what the City has to offer. We look forward to continuing to work collaboratively with Mayor Lightfoot and all of our valued community partners on this exciting endeavor.”
Bally’s has pledged an upfront payment of $40 million to the city and $4 million annually as part of entering the Host Community Agreement with the city. It originally pledged an upfront payment of $25 million with the Tribune proposal, but the higher figure negotiated by the mayor’s office is not surprising considering Bally’s pledged a $50 million payment in its rejected McCormick proposal.
Bally’s plans in River West (and River North)
This is where Bally’s will open their first casino in Chicago. A temporary gambling facility at Medinah Temple (Wabash & Ohio) will launch as the permanent spot at Chicago & Halsted is built out. @cbschicago pic.twitter.com/2uTHD5jLGq
— Chris Tye (@TVTye) May 5, 2022
Bally’s proposed casino calls for 3,400 slots and 173 table games as well as a 500-room hotel and 3,000-seat entertainment center. It also has plans to revitalize the riverwalk area that include a pedestrian bridge restaurants, bars, and cafes facing the Chicago River. The plans also call for retail space on the ground floor of the casino building at key intersections to help generate foot traffic.
In terms of jobs, the Bally’s has projected 3,000 construction jobs and 3,000 permanent casino positions. The company was able to secure agreements with organized labor for the project, a near-necessity given Chicago’s strong union presence.
“We are excited this casino will be built and staffed by skilled union members,” said Chicago Federation of Labor President Bob Reiter. “It’s the working-class people of Chicago who make this a world-class city, and it’s the working-class people of Chicago who will make this a world-class casino. We look forward to partnering with the city, Bally’s, and our affiliate unions on this historic project.”
Bally’s has committed to 60% minority hiring and the creation of a jobs program that will target neighborhoods with the highest levels of unemployment and lowest income. During its presentation to area residents last month, Bally’s said it would set a goal of entry-level salaries of $50,000 per year plus benefits and tuition reimbursement.
Alderman Walter Burnett, whose 27th Ward is where the casino would be built should Bally’s be approved by the Illinois Gaming Board, expressed support for Lightfoot’s selection despite indicating previously he’d be pleased to see the casino locate elsewhere. Burnett, whose ward also includes the United Center — where FanDuel Casino is currently constructing a sports betting lounge — is arguably the most gaming-friendly alderman among those primarily impacted by the casino’s location.
“I am proud to support the forthcoming Bally’s Chicago casino here in the 27th Ward,” said Burnett, who drafted the original ordinance that eventually led to the end of the home rule ban on sports wagering in the city. “It will be a world class entertainment destination that provides jobs, boost tourism numbers and brings a host of incredible amenities into the 27th ward. This is a once in a lifetime opportunity for the city of Chicago and it will be a premier destination for generations to come.”
One key change from Bally’s original proposal to the city is the location of the temporary casino, which it hopes to open in 2023. Originally planned to be on the Tribune publishing plant grounds while the permanent venue is constructed, it will now be at the Medinah Temple in the River North neighborhood, hoping to leverage high traffic via major transit hubs and an active retail corridor.
Though the city has plans to improve the traffic flow around the Tribune publishing site on Chicago and Grand avenues and Bally’s has also made commitments to help ease congestion and traffic concerns in the area, winning over River West residents will prove challenging if last month’s meeting is any indication. Some residents were also worried about the impact on crime in the communities adjacent to the casino and expressed concerns about plans to overhaul the riverwalk area.
Image courtesy of Bally’s RFP submitted to the city of Chicago