The Economic Impact of Slot Machines: Bally’s Forecasts a Challenging Future for Chicago’s Casino Market

Bally’s Corp. is raising alarms about the economic repercussions of permitting slot-like video gaming terminals (VGTs) in various establishments across Chicago, expressing deep concern that these devices will compete directly with the traditional experience of casino slot machines. As the company actively works to develop a $2 billion casino resort in the city, it argues that the proliferation of these smaller machines could divert essential player traffic and severely impede the financial success and tax contributions expected from its high-end slot machines and gaming operations.

Current Considerations by City Officials

Chicago city officials are actively contemplating the introduction of VGTs.
Bally’s corporation opposes this initiative, marking it as detrimental to their ongoing projects.

During a recent meeting, the Chicago City Council Committee on License and Consumer Protection revisited the proposal to allow VGTs in more than 3,500 licensed establishments, including restaurants, bowling alleys, hotels, and theaters. Initially, an 8-6 vote supported the proposal, followed by amendments to include various bar types.

In response to this legislative move, Bally’s dispatched representatives to argue the adverse business impacts that VGTs would inflict on the company’s operations, particularly the temporary gaming site currently stationed at the historic Medinah Temple.

Projected Economic Losses

Elizabeth Suever, Bally’s vice president of government relations, articulated some alarming statistics during discussions with city officials. She foresees a staggering potential loss of:

$260 million annually in state tax revenues attributable to VGTs
Approximately $70 million in tax contributions directly from Chicago
The elimination of around 1,000 jobs at Bally’s due to decreasing profits

Bally’s estimates highlight that permitting VGTs could carve out hundreds of millions in gross gaming revenue from Bally’s Chicago casino, posing a significant risk to its viability. Suever also stressed that authorizing these terminals could breach the existing Host Community Agreement mandating Bally’s to pay the city $4 million yearly for exclusive slot machine rights.

Financial Insights from City Research

Research conducted by city government anticipates modest fiscal benefits from VGTs, ranging from $7 million to $22 million annually, which seems insufficient when weighed against Chicago’s substantial projected $1.15 billion budget deficit for 2026.

The taxation structure on VGTs indicates a 35% levy, of which only 5% is allocated to the host municipality, meaning the city would comprehend limited financial gain.

Continuing Casino Developments

As the debate over VGTs unfolds, Bally’s Chicago is simultaneously under construction, aiming to erect a permanent casino. Key features include:

A 34-story hotel boasting 500 rooms
3,500 slot machines and table games
A rooftop dining establishment with stunning views
A spa, fitness centre, and 3,000-seat theatre
A public two-acre park and a riverwalk stretching 2,000 feet

Anticipations point towards a potential grand opening in September 2026, albeit the prospect of inclement Chicago weather may disrupt the timeline.

Conclusion

With serious implications for both the economy and the employment landscape in Chicago, Bally’s staunch opposition to video gaming terminals signals broader concerns about responsible gaming practices. As both legislative actions and construction efforts progress, it remains critical for city officials to balance interests for growth with community welfare.