Bally’s Casino Deal Reportedly Under Federal And Local Inquiry
The U.S. attorney’s office and Chicago’s inspector general are looking into the process by which Bally’s won its city casino license in response to complaints made by unsuccessful bidders, according to Crain’s Chicago Business.
Second Ward Alderman Brian Hopkins, a longtime critic of former Mayor Lori Lightfoot’s handling of the casino approval process, confirmed the existence of the federal inquiry to Crain’s, which also cited unnamed sources. Chicago Inspector General Deborah Witzburg is conducting a second, parallel inquiry, the outlet reports.
The dual inquiries reportedly began months ago. Sources affiliated with the former mayor disputed that any such proceedings are underway, telling Crain’s that reports of the investigations came from “some casino industry actors and their allies who lost out on the bid who have spent the following years planting false rumors and innuendo in the media.”
A Bally’s spokeswoman told Crain’s the gambling company “is not aware of any investigation,” and Chicago’s Law Department said neither it nor the mayor’s office have been asked for information.
Critics of the deal have pointed to the city allowing Bally’s to change the terms of its financial deal with minority investors after the company put in a clause enabling it to buy out minority shares at a non-negotiated price after the casino opens. The original clause endangered city approval of the deal, Crain’s reports.
Other reports indicated the city charged Chicago billionaire Neil Bluhm's Rush Street Gaming twice as much as Bally’s, $600K versus $300K, to file bids for two potential casino locations, per Crain’s.
The outlet also reported that the city consultant who evaluated the financial prospects of the bidders had previously raised money for Bally’s, a piece of information not disclosed to aldermen. Another city consultant hired to solicit and evaluate bidders for the casino had ties to Bally’s as well, the Chicago Sun Times reported.
The city gave the casino operator final approval for its $1.7B casino project at the site of the former Tribune Publishing plant in River West last December. The casino is projected to open at some point in 2026.
Tribune Publishing has agreed to leave the building by July 2024, allowing construction of the new casino project to begin next year.
In the interim, Bally’s opened a temporary casino in Medinah Temple in River North, with a license to operate in the facility until 2026. This was intended to give the company time to build its permanent site.
The city expects to get roughly $35M in tax revenue from Medinah Temple in 2024, according to Block Club Chicago. City officials have said the tax revenue will increase to more than $200M when the permanent casino opens, Block Club reports.