Professional gamblers are laughing at Bally’s inept roll of the dice to launch its casino in Chicago.
5-Feb-24 – The latest torpedo sending the $1.7 billion Bally’s River West casino proposal down the drain is a deep tunnel water pipe that recently has been “discovered” under the site of a 500-room high-rise hotel planned for Chicago Avenue & Halsted Street.
Despite opening the Medinah Temple location 24/7, picking up the private parking tab for tens of thousands of gamers, and bussing hundreds of Asian gamblers to the temporary casino, the $8.5 million revenue stream there, over the past few months, has pumped only $3.1 million into the City of Chicago tax coffers.
That’s almost $10 million short of what former Mayor Lori Lightfoot’s administration projected and earmarked to fund the city’s police and firefighter pensions.
In addition to the casino’s 3,400 slot machines and 173 gaming tables, Bally’s plan also includes a hotel, entertainment complex, food hall, four bars, an outdoor park, and an amenity terrace.
Financial experts say casino revenue theoretically is a great source to use for city pensions because it exports the tax burden. At least a portion of the tax revenue generated from casino operations would come from individuals who do not live in the city. However, if casino revenues fall short, the city may need to increase existing real estate taxes or find an alternative revenue source.
In 2022, Bally’s predicted the casino would pump $200 million annually into city pension coffers. However, Bally’s is not contractually required by the city to actually deliver that amount.
Bally’s already has reduced its overall project cost to $1.3 billion from $1.7 billion. The proposed Bally’s casino would replace the former Chicago Tribune printing plant on 30 acres at 777 West Chicago Avenue in the River West neighborhood.
This bustling intersection is boxed in by the Chicago River, vehicular bridges, and Metra railroad tracks – not an ideal site for a mega development. Traffic congestion on Chicago Avenue west of Halsted also includes a steady flow of trucks from a cement plant on Goose Island.
Recently, city bus boosters and bike enthusiasts also are up in arms about the Chicago Department of Transportation’s plans for widening Chicago Avenue at Halsted Street near the proposed casino site. The CTA’s #66 Chicago route is one of the city’s busiest bus lines. The gambling facility is expected to further add to the traffic volume in the area.
Despite a fast-tracked 2022 approval of the Bally’s casino proposal by the Chicago City Council, there is continued handwringing about the largely secretive selection process, lack of review, quick passage of the deal, and the moral pitfalls of gambling itself.
In 2022, 42nd Ward Alderman Brendan Reilly said Lightfoot’s attempt to rush the casino deal through the City Council raised the specter of Mayor Richard M. Daley’s infamous parking meter deal, which also was rammed through with little transparency and even less debate.
However, experts say the choice of the Bally’s site at the nearly impassable corner of Chicago & Halsted is likely the worst possible location for a successful, money-making casino to bail the city out of its pension debacle.
“Bally bought the deal with a $40 million upfront bribe,” observed Mr. Zak. “The Chicago & Halsted site is the most horrendous place they could put it.”
Mr. Zak, nicknamed “Dog Daddy” because of his great love for canines, resides in Old Town only a few blocks away from Bally’s proposed River West site. However, Mr. Zak regularly commutes to the Hard Rock Casino in Gary, Indiana, to gamble.
“The Hard Rock casino makes $1 million a day in profit,” said Mr. Zak, who is friendly with casino management because of his status as a big-stakes player.
Former Mayor Lightfoot spun her roulette wheel while trying to choose between five proposals for the launch of a giant Chicago enterprise casino. The proposals came after lawmakers in Springfield changed the casino tax structure and passed a pile of chips to the gaming industry.
Mr. Zak and this writer agree that the best logical start-up casino site was Lakeside Center – the original McCormick Place East – for what could have been an instant “pop-up” downtown casino that likely would have instantly raised millions in gaming tax dollars for the city.
During the pandemic in 2020, some $15 million in renovation upgrades were added to Lakeside Center to convert it to an emergency hospital for up to 2,500 COVID-19 patients.
The Federal Emergency Management Agency (FEMA) paid for the work, and the United States Army Corps of Engineers supervised construction, so these funds really were a gift from Uncle Sam.
The seldom-used, 50-year-old Lakeside Center has 583,000 square feet of exhibit space. It is located near 2,900 hotel rooms, designed for high-traffic events, and would help draw thousands of eager conventioneer gamblers.
However, to make Lakeside Center work as a common sense, temporary casino, a two-year lease would have to be drafted between Metropolitan Pier and Exposition Authority, managers of McCormick Place, and Chicago-based Rush Street Gaming. The company is headed by Chicago real estate developer Neil Bluhm, who owns four casinos, including Rivers Casino Des Plaines, the top-grossing venue in Illinois.
Mr. Zak and many aldermen, including Hopkins, also believe another perfect site for construction of the new, permanent casino is “The 78,” a 62-acre nearly-vacant mega-development site on the Chicago River in the South Loop. Rush Street Gaming previously had worked with master developer Related Midwest on its proposed new-construction casino called “Rivers 78 Gaming” on the site of The 78.
“Going forward, any urban planner with vision can see that the site of The 78 is by far the best choice for location of the new casino for future decades,” Mr. Zak said. “With the proposal for a new White Sox baseball park also built on vacant land at The 78, a dual casino-stadium plan could be a big revenue winner. The City of Chicago should pull out of the Bally deal.”
Along with the casino, why not add a domed stadium for both the White Sox and the Chicago Bears and turn The 78 into a Chicago mega-sports-gaming-entertainment district?
Now, the chips are in the hands of Mayor Brandon Johnson. With his 21 percent approval rating, he should be ready to wheel and deal.