Hard RocConstruction of Bally’s permanent downtown Chicago casino is officially underway, having started with the demolition of the former Chicago Tribune publishing plant, which occupied the site. The company expects to complete the resort’s construction within two years, keeping it on schedule for the state-mandated September 2026 opening.
The demolition will take three to four months to complete, even with crews working 12 hours a day, seven days a week. Even so, work on the new structure could start before the end of the year.
When it’s finished, Bally’s Chicago will include 3,400 slots, 170 table games, a 500-room hotel, a 3,000-seat entertainment venue, and numerous restaurants and bars.
Bally’s Chicago Has Faced Controversy
Bally’s continues to express confidence in opening on time, but the project has already faced numerous setbacks, including issues with the site itself. It bought the Freedom Center printing plant and ordered the Chicago Tribune to relocate. However, the newspaper had signed a 10-year extension and initially refused, putting the project at risk.
The companies entered arbitration and agreed to a deal, which included Bally’s providing financial assistance for the Tribune’s relocation.
The operator next encountered delays in opening its temporary casino in downtown Chicago. While Bally’s had hoped for a June or July opening, the Medinah Temple location only opened on Sep. 9, 2023. Although much excitement surrounded its opening, the temporary casino has not been meeting revenue forecasts.
Most recently, there were questions about whether Bally’s would succeed in securing financing for the project. At one point, the permanent casino was facing an $800 million construction funding deficit, which drew concern from multiple parties, including Chicago Mayor Brandon Johnson. That situation continued until Bally’s announced it had secured $940 million in funding from Gaming and Leisure Properties last month.
Chairman Kim Expresses Confidence in The Project
Bally’s chairman, Soo Kim, who attended the demolition launch, expressed strong confidence in the project. Kim’s hedge fund, Standard General, is the company’s largest shareholder and soon-to-be private owner. In July, Bally’s agreed to a $4.6 billion merger with the fund, which Kim says demonstrates the latter’s faith in Bally’s success.
Kim is confident Bally’s Chicago will be superior to other nearby casinos and dominate despite what is becoming a saturated market. In a meeting with the Chicago Sun-Times Editorial Board, Kim said:
I think this is probably why they spend so much time pooh-poohing our stuff, because let me tell you: We’re going to be eating a lot of people’s lunches. Most importantly, Indiana.
There’s a lot of pressure to keep to the timeline and open the permanent location in 2026. Last year, Bally’s received a one-year extension to its temporary location’s license, allowing it to operate until Sept.9, 2026. However, any delay in the grand opening beyond that date would potentially mean lost revenue and hundreds of casino employees temporarily out of work.
The Chicago mayor did not attend the demolition media event. However, while he has occasionally been skeptical of Bally’s ability to complete the project, he now views the casino as a significant economic investment for Chicago. He said he “will be watching eagerly as Bally’s rises along the river.”
Retail Casinos Offer Illinois Online Market Access
In the online gambling era, retail casinos provide operators with more than just a direct stream of revenue. They also bolster the visibility of their associated online brands, build a database of potential customers, and allow cross-marketing opportunities through shared loyalty programs.
Like most states that have legal online sports betting, Illinois requires online operators to partner with retail casinos. While the state has offered “untethered” licenses as an option, the price tag on these is $20 million, double that of a license tied to a land-based partner. Because of the high cost, there hasn’t been as much interest in that license type as Illinois officials had likely hoped. The last potential contender, Betway, dropped its plans to enter Illinois last year.
Bally’s already operates a Bally Bet retail sportsbook in its temporary downtown Chicago location. Although it doesn’t have to wait for its permanent location to be complete to launch its online sportsbook, it has been waiting to do so. Perhaps the uncertainty that loomed over the project until recently had warranted additional caution.
However, with Illinois ranking as the third-largest sports betting market after New York and New Jersey, it’s an opportunity that’s hard to ignore. Unsurprisingly, during the company’s Q2 earnings call, CEO Robeson Reeves mentioned the state as one of four jurisdictions in which he expects Bally Bet to launch before the end of 2024.
Hard Rock Bet Launches in Illinois
Hard Rock International is another company in a similar position, looking to make a mark in Illinois’ gambling scene. Today is the opening date for the company’s permanent Hard Rock Rockford casino. Like Bally’s, Hard Rock had initially been tight-lipped about whether it would pay the $10 million fee to pursue online gambling using its new market access. However, those questions were answered on Monday when Hard Rock Bet announced that it was live and taking bets in Illinois.
The market access Hard Rock and Bally’s have secured will be all the more important if Illinois eventually legalizes online casinos as well. States with online casinos and sports betting tend to see at least twice as much revenue from the casino vertical. A physical presence in the state all but guarantees access to any hypothetical future iGaming market, while the untethered sports betting licenses don’t come with any such assurance.
Operators Still See IL as a Potential iGaming Market
Until a few years ago, Illinois was seen by many analysts as a top contender for online casino expansion. Lawmakers passed the retail casino expansion and sports betting bills side-by-side in 2019, and enthusiasm about online gambling in the state was high. The potential for online casino access likely factored into operators’ decisions to bid for the new retail casino licenses.
However, despite early hopes, the state’s iGaming legislation has seen little movement, with bills unable to get past the committee stage. Yet, operators like Bally’s and Hard Rock still see it as a potential opportunity. Illinois’ established retail casino industry, business-friendly policies, and liberal-leaning politics are all critical factors for iGaming legalization chances. The question is whether those factors can overcome resistance from the VGT industry and retail casino workers’ unions.
The potential upsides of legalization are hard to deny. One study by Analysis Group, an economic consulting firm, estimates that Illinois online casinos could generate $1.3 billion in their first full year. By year five, revenue could grow to $2.3 billion without negatively impacting retail casinos.
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