Bally's Chicago is pausing construction on the majority of its casino and hotel complex along the Chicago River as it spars with the city over video gambling terminal legislation.

Bally's issued a reset notice Saturday to the Chicago Community Builders Collective, a general contracting partnership working on the development. This notice stops progress on the development's hotel, events center and several planned restaurants, according to the Chicago Tribune.

“Bally’s issued a notification to the Chicago Community Builders Collective (CCBC) that it is resetting the pace of construction of elements of Bally’s Chicago permanent casino," Bally's stated.

The initial opening of the permanent casino remains slated for early 2027, the company stated.

The dispute centers on the legalization of video gambling terminals in the city as part of this year's budget. Bally's argues that the move breaches the city's commitment not to expand gaming under its 2022 agreement to build the casino and surrounding development.

The potential for "an uncontrolled proliferation of video gambling terminals" breaks the deal and "creates uncertainty that could be harmful for Bally’s Chicago prospects," the company argues.

Nearly 50,000 VGTs were operating across Illinois at the end of 2025, the largest network in the world, according to the Illinois Gaming Board.

Chicago gave the green light to video gambling last fall in the hopes of filling a $6.8M funding gap, and 268 Chicago VGT applications were pending as of July, according to the Chicago Tribune. None have received approval yet to start operations.

Bally's dispute with the city comes as its lender appears to be prepared for the hiccup. The casino operator signed an agreement with Gaming and Leisure Properties, a real estate investment trust, for construction funding for the project in July 2024.

Carlo Santarelli, senior vice president at Gaming and Leisure Properties, said on the company's 2026 second-quarter earnings call on July 31 — before Bally's partial work stoppage — that the potential impact from VGTs was baked into the deal.

"Clearly, Bally's is going through some things right now with the city as it relates to how this impacts some of the agreements that they've previously come to," Santarelli said. "But in our view, the VGT concept was included in our underwriting."

Bally's stated that it did not take the decision lightly, given the potential impact on many of the 1,500 union tradespeople working on the project.

"We will continue to assess our options, which we hope will include more productive discussions with the Mayor’s Office and City Council," Bally's stated.