The new mayor of Chicago, Brandon Johnson, is finding a bare cupboard as he navigates his first city budget. That’s in part because of disappointing revenue from Bally’s Chicago, the city’s first casino.
Bally’s Chicago was projected to produce $12.8 million for the city in tax revenue from gaming in 2023. It is well below that pace through September and October, with just shy of $1.5 million in city taxes to Chicago so far. The casino opened at its temporary location at Medinah Temple on Sept. 9.
So far, revenue figures are available only for the first two months Bally’s Chicago has been open. (And it was only open three weeks in September). Still, it seems Bally’s will probably fall well short of revenue projections.
Tax money from gaming activity at Bally’s is earmarked for the pension funds of firefighters and police. The mayor has indicated that any shortage of tax revenue to fund a 3% cost-of-living increase for retired first-responders will be paid for in other ways. Exactly how is unknown in this city that continues to see budget problems stemming from post-COVID-19 inflation to an influx of asylum seekers.
Why Chicago needs tax help from Bally’s Chicago
There are 15 Illinois casinos but just one in the state’s largest city, Chicago. Illinois online casinos are not legal, but lawmakers did debate bills on the issue in the last session. They are expected to consider proposals in the upcoming session that begins in January. Tax revenue from online casinos would tower over anything produced via retail casinos.
The Chicago City Office under former Mayor Lori Lightfoot issued its mid-year budget last April. That document predicted the city could receive $34.4 million in gaming tax revenue in 2024, and by 2026, projected the figure to top $100 million. Construction delays on the new Bally’s casino in River West have put those projections in jeopardy.
Johnson’s first city budget was approved on Nov. 15 at a projected cost of $16.7 billion. Johnson’s plan calls for a freeze on tax rates but increases spending in some key areas, such as hiring police officers. The city allegedly has lost more than 2,000 police officers in the past six years. But how to fund new personnel has been a sticking point for lawmakers.
Also, Johnson is scheduling $150 million in the first four months to handle the situation with asylum seekers who have been shipped to Chicago from governors in some southern states. Opponents claim it’s costing the city more than $40 million every month.
The Chicago Sun-Times is forecasting gloom. A recent op-ed article warned that the city will be short of paying its bills in 2024 at its current economic pace.
Bally’s CEO projected $50 million in annual taxes for Chicago casino
In September, Johnson and other city leaders were on hand at Medinah Temple on N. Wabash Avenue for a ribbon-cutting ceremony for the temporary Bally’s location. The mood was optimistic, despite the fact that the permanent venue may not be completed until 2026.
The temporary casino, in one of the most historic buildings in The Windy City, features 800 slot machines and 56 table games, but it’s not the glitzy new attraction that Bally’s is hanging its brand on for transforming downtown Chicago into a Las Vegas of the Midwest.
Bally’s CEO Soo Kim predicted the company would pay $50 million annually in taxes from the temporary location, then more than $200 million once it moves into its permanent locale. Its first month of revenue indicates that the temporary casino could come up far short of Kim’s projection.
Chicago is the third-largest metropolitan center in the US. According to a report from InsureMyTrip in early 2023, Chicago is the most sought-after US travel destination among US travelers, generating the most Google traffic for city visit information in 2021-22. That popularity has Johnson, Kim and Bally’s optimistic about the future of gaming in Chicago.
Early numbers are concerning.
