Corruption seems to be endemic to politics in Chicago and it’s caught up with the deal that juiced Bally’s Corp. into a Windy City casino. Nothing about the arrangement passed the smell test save that Bally’s had the most plausible of three (unappealing) proposals for a Chicago megaresort. After setting up a selection process, then-Mayor Lori Lightfoot (D) unilaterally short-circuited it by choosing Bally’s hors concours, without apparent consideration of long-shot bids by Rush Street Gaming and Hard Rock International. The deciding factor was a legitimized form of bribery, Bally’s promise of at least $40 million in upfront money in return for getting the nod. Neither of the other contestants was so crass. If they were it might have worked out in their favor. And Bally’s got steered at the last minute to the temporary-casino site of Medinah Temple, which oh-so-coincidentally happened to be owned by a major Lightfoot backer. Nothing to see, right?
That’s the stuff we knew about. Thanks to Crain’s Chicago Business, we’re learning that there was even more than offended the eye (and nose). For instance, as paraphrased by Casino.org, “reports have surfaced that Rush Street was charged twice as much as Bally’s to file bids for various potential casino locations.” Unsurprising, that. Lightfoot slanted the process toward Bally’s from the outset and the question of “who benefits?” was never far from one’s mind. Also this: “the city allowed Bally’s to alter the terms of an agreement with minority that would allow the gaming company to buy those shareholders out of the Chicago project at a price that cannot be negotiated.” Such a provision should have rejected like a Josh Fields forward pass. And then there’s Bally’s shaky financial condition, which saw the company entrusted with a $1.7 billion megaresort project that is supposed to save the city’s finances at a time when Bally’s was carrying $3.4 billion in debt against a market capitalization of $526 million. (Bally’s execs get quite shirty with Wall Street when their ability to leverage mega-projects is questioned.)
Chicago’s inspector general, Deborah Witzburg, has a policy of not commenting on potential investigations. For its part, Bally’s say it is unaware of being probed. But Chicago would have been better off going with no casino than one given the generally weak pitches and the faint whiff of pay-for-play that has dogged Bally’s Chicago. Its naysayers include Alderman Brian Hopkins (D), who is quite vocal in his belief that the permanent casino will never be built (we wouldn’t be surprised) and Bally’s will try to hang onto Medinah Temple in perpetuity. “Bally’s has already indicated that they’re not in a hurry to start construction. They’re years away from it,” Hopkins told Casino.com and he’s not wrong. “They don’t have the money to do it. They were counting on the cash flow from the Medinah Temple site to fund the construction project, and right now, they don’t have it,” he added. Considering that Bally’s Chairman Soo Kim is juggling the Las Vegas Strip, New York City, Lake of the Ozarks and, yes, Chicago (not to mention an errant sally at Japan), you have to wonder how many balls Bally’s can keep in the air at once.
While on the subject of Bally’s, our potentially masochistic Atlantic City correspondent visited Bally’s Atlantic City last weekend and had the following observations. On the casino floor, “they were calling winners names every half hour. What could the odds of winning be? We found out when Bally’s called someone’s name that we knew to win $1,000. Only problem, he [had] left Bally’s to go to another casino and was not there to claim his prize!” The casino lounge was “quite crowded” Saturday night and people were queuing up to get in nevertheless. Diners were given a choice of two entrées, one of which our man dubbed “albino marinara lasagna” (pictured). The alternative “was ‘fish of the day,’ which looked like whatever washed up on the beach that day.” Mercifully, it is not pictured. But it might explain the excellent profit margins the casino enjoys.
It’s all over in Detroit, where employees at MGM Grand Detroit have ratified a new labor pact with their bosses. After 47 days on the picket line, workers agreed to what sounds suspiciously like what their fellows at Hollywood Greektown and Motor City already got: 18% higher pay, comped health care and reduced workloads. It’s a pretty George arrangement. However, as Steve Friess documented in an excellent exposé, some in the UAW and allied unions wanted to hold MGM to a higher standard, mainly because it makes easily the most, even without getting into online gambling. “We sacrificed a lot during the pandemic, but we fought for and ultimately won a contract that secures our health care and provides significantly improved wages,” said Teamsters member Gabriel Robert Hernandez, declaring victory without making clear why the extra hardship was warranted. If MGM had really wanted to spike the Detroit Casino Council, it would have given its workers slightly better terms, thereby driving a wedge between casino employees at MGM and its rivals. But it evidently didn’t, preferring unanimity over Kissinger-like realpolitik.
Between Chicago and Vegas Bally’s will definitely have problems to build both projects and I would assume they are more interested in Vegas at this point. With a new baseball stadium and hotel-casino in Vegas both the A’s and MLB have to be wondering does Bally’s have their share of the money to build this ambitious project.
Meanwhile in Chicago I agree with Alderman Brian Hopkins that Bally’s lacks the funds to build a new casino in Chicago. It looks like Bally’s needs a partner to build both projects.