The gaming operator Bally’s has refuted claims that it could fail to open its new Chicago casino by an early 2027 deadline.
The firm has found itself under scrutiny after it listed itself as a “going concern” in its most recent quarterly financial report, citing concerns about its ability to avoid defaulting on debt over the next year.
US accounting guidelines require firms to issue a “going concern” warning when there is “substantial doubt” about their ability to continue business as usual.
But Bally’s said the funding is in place to overcome its reported $4.5 billion debt and complete the Chicago casino by early 2027.
“Without question, we do have the funding, and we will complete it on time,” Kim Barker, Bally’s Executive Vice President and Chief Legal Counsel, told the media outlet NBC Chicago. “Bally’s continues to be in a strong position to deliver the integrated casino and resort.”
The Chicago development comes days after Bally’s revealed it is in talks over the possible sale of its rights to a $1.1 billion development project for the Athletics’ Las Vegas baseball stadium.
Bally’s Chicago Casino: Firm Says It Will Complete on Time
Bally’s said it expects a cash inflow once the Chicago development is complete, along with its in-development New York casino.
This, Barker said, will ensure that Bally’s has more than enough to pay off its debts.
“Capital projects of this size and scope require a large outlay of funding before revenue comes in the door, before the doors are open,” she said.
But the current financial picture does not look particularly rosy for Bally’s.
Earlier this summer, the financial ratings agency Fitch revised its Bally’s outlook downward, citing liquidity concerns and “elevated leverage”
“Bally’s has demonstrated repeated access to capital, primarily through secured debt and private lending, and financing for the New York development may provide an additional source of liquidity,” Fitch wrote in June. “However, the amount and timing of any such funding remains uncertain.”
A Construction Pace ‘Reset’
Earlier this month, Bally’s said it was “resetting the pace of construction” on parts of the Chicago casino.
Several city council members reacted angrily to the slowdown. They accused Bally’s of prioritizing casino floor developments over its commitments to build a hotel, new retail facilities, event and exhibition spaces, park areas, and a riverside walkway.
“Continuing construction of the casino floor while slowing the hotel and other non-gaming portions does not eliminate those obligations,” a group of 28 council members said.
They argued Bally’s decision to slow down non-gambling facilities was a “material change” to the firm’s council-approved contract.
“We have held up, and will hold up, our end of the bargain,” Bally’s said in response.
City Council Clashes With Bally’s
The two parties have also found themselves at loggerheads over the council’s decision to approve video gambling terminals in the city.
Bally’s says this violates the terms of its contract with Chicago.
However, the Chicago Sun-Times reported that some council members think Bally’s is using the terminals as an excuse.
“[The firm is] trying to turn lemons into lemonade by blaming VGT as the reason they’re slowing down construction,” said one council member. “They’ve told their own investors that they are heavily leveraged […] and that encumbrance could have a negative impact on their future operations.”
Bally’s sealed a deal to develop the River West-based casino in 2022. The deal also granted Bally’s permission to open a temporary casino at the Medinah Temple in the Near North Side community area.
However, the firm’s most recent quarterly report shows the Medinah temporary casino is currently running at a loss.
Elsewhere in Illinois, Penn Entertainment’s new Aurora-based casino, Hollywood, this month reported revenues of $17.4 million in its first month of operation.
The Prairie State’s sports betting revenues, however, fell earlier this summer. Total sports betting volumes also tumbled 21% year-on-year in May.
