Bally’s pleads poverty

There is no word for “shameless” in the lexicon of Bally’s Corp. Chairman Soo Kim. That Chicago megaresort that was going to be “eating the lunch” of the competition is now begging for a taxpayer handout. Yes, the very gambling palace that was intended by then-mayor Lori Lightfoot to swell the tax base and rescue the city’s pension funds wants its property tax assessment reduced by 60%. What sauce. We can’t wait to see how other business react to this blatant rattling of Bally’s tin cup.

The average Chicago resident pays a 10% property tax assessment, the same levy that the suddenly (well, not so suddenly, in truth) that Bally’s claims is all it can afford. In a ‘concession’ intended to seem George, Kim is offering to pay the full 25% impost … 10 years after the casino opens. Or is it 12? Bally’s bald claim is that “the incentive is essential for financial viability and maximizing revenue for the city.” Ah, an ‘incentive’ is it? So Bally’s suddenly needs encouragement to build its alleged gambling juggernaut in the Windy City? Somebody’s lunch has indeed been eaten and we rather suspect it’s Kim’s.

At the root of the issue, Bally’s is offering to pay taxes with one hand, then take them back with the other. Kim and his surrogates claim they can’t meet their $200 million annual obligation to the city’s tax base without this handout. In truth, they never could, they’ve just had a sudden attack of candor. As one longtime Las Vegas observer put it, Bally’s finances are “a house of cards in a wind tunnel.” Indeed, Las Vegans should weigh Bally’s extravagant promises of a Las Vegas Strip megaresort against its new confession of penury. It doesn’t compute.

Now, the whole argument for casinos in urban areas tends to be that they will enlarge economic activity and generously pay taxes. And it’s overwhelmingly true. But not this time. Bally’s is playing the pauper and its appeal for charity grates on one’s sensibilities. The company’s argument, made through a mouthpiece, is that they are “commonly used for major developments.” Yes, but not in the casino industry. That’s a big part of the argument that people like American Gaming Association CEO Bill Miller make: Gaming can pay its own way, minus subsidy.

Bally’s pathetic plea, for which Alderman Gilbert Villegas (D) is carrying water, is Bally’s way of confessing that Northside Bally’s Casino is a flop. It was targeted to raise $35 million in taxes and has brought in $16 million. With so many suburban gambling options, Chicagoans obviously don’t cotton to going downtown for their fix. As one journalist put it, “The underperformance raises questions about Bally’s ability to meet long-term revenue targets and fulfill promises of easing the city’s financial strain, including underfunded public pensions and a declining credit rating.” In response, Bally’s says the lack of a tax break will scare off other businesses from the Second City. Color us skeptical.

In another demonstration of shamelessness, Bally’s is arguing that its bribe, er, upfront payment to the Lightfoot administration of $40 million should be counted against future tax obligations. Can you say ‘Indian giver’? We thought so. Fortunately, current Mayor Brandon Johnson (D) seems to be made of sterner stuff than Lightfoot—which wouldn’t be difficult—and says the host-city agreement between Bally’s and Chicago doesn’t allow for any giveaways of the sort Kim is seeking. We hope he holds to that position. Johnson’s office has already walked back Bally’s commitment to $67.6 million in annual property taxes. Johnson’s recent push to raise another $300 million in property taxes was recently rebuffed by the city council, so a handout to Bally’s would be ill-timed, at best.

Bottom line, in his greed and cupidity, Kim thought he’d scored the proverbial license to print money. Now that it turns out that his blue-sky promises are full of it, he’s trying to welsh on the deal. It seems significant that the tin-cup rattling doesn’t emanate from Gaming & Leisure Properties, which is the majority owner of the $1.7 billion project now, Bally’s being unable to meet its financial commitments. Nobody could look at GLPI’s balance sheet and conclude they’re not good for the money. Bally’s, exorbitantly in debt and desperately short of cash, is another story.

What does this mean for Bally’s much-touted redevelopment of the Tropicana Las Vegas site? In short, don’t bet on it. Kim doesn’t have a pot into which to piss.

Speaking of pisspots, disgraced former lawmaker David Sanborn has recruited some high-profile backing in his attempt to hang onto his hole-in-the-wall New Hampshire casino long enough to sell it for big bucks. Showing that nothing trumps the profit motive nowadays, three GOP members of the Lege piled on. They’re arguing that the state Supreme Court should take up Sanborn’s case. We don’t know whether this was motivated by sheer party loyalty to ex-colleague Sanborn or the principle that anyone should be able to make a buck, scruples be damned. In Sanborn’s instance, it would be a very lucrative payday, with suitors including Full House Resorts willing to pay as much as $30 million for the rathole he calls a casino. Nice work, if you can get it.

Sanborn, who discredited himself by allegedly steering Covid-relief funds into his casino (a strict federal no-no) and luxury-car purchases, did score something of a court victory last week. Merrimack County Superior Court Judge John Kissinger held that the state co-mingled private correspondence between Sanborn and his lawyer with relevant documents. As a consequence, prosecutor David Lovejoy and expert witness Don Swanson have been kicked off the case.

However, despite finding prosecutorial misconduct, Kissinger only handed Sanborn a partial victory. He did not dismiss the case, nor exclude other evidence found in a raid of Sanborn’s property, nor award attorney’s fees. If eventually convicted of any felonies, Sanborn would face a 10-year ban from running a Granite State gambling business. However, even if he beats the rap, this scumbag should be an industry pariah for life.