Bally’s, a Rhode Island-based gambling company, is seeking a significant property tax break to support its $1.7 billion integrated casino and hotel project along the Chicago River, Illinois. The venue, planned for the site of the former Tribune newspaper printing plant at 777 West Chicago Avenue, is part of the company’s bid to revitalize the area. However, Bally’s request for a substantial tax incentive has sparked considerable debate within the City Council, with both political and financial considerations at play.

Proposed tax incentive: a 12-year break:

After being awarded the sole casino license in Chicago in 2022, Bally’s is pushing for a 12-year property tax reduction, which would lower the tax rate on its development from the usual 25 percent to just 10 percent of its market value—comparable to residential tax rates. This incentive would remain in place for the first decade, after which the rate would gradually increase toward the standard commercial property rate of 25 percent. Bally’s maintains that the incentive is crucial for ensuring the financial success of the project and for maximizing its potential tax contributions to the city.

The proposal, introduced by Alderman Gilbert Villegas of the 36th Ward, has met with resistance in the City Council. Some members are particularly wary about the request, especially following the passage of a contentious $17.1 billion city budget, which notably excluded a proposed $300 million property tax increase that had initially been sought by Mayor Brandon Johnson. As a result, the ordinance is now facing a challenging path, with further discussion deferred to the Rules Committee by Alderman Jason Ervin, the floor leader for Mayor Johnson.

Despite this opposition, Bally’s argues that the tax break is vital to the project’s long-term success, claiming that the casino could generate up to $200 million in annual gaming taxes for the city. The company also points to additional revenue streams, including sales and amusement taxes, as a way to bolster the city’s budget. Chris Jewett, Bally’s corporate development director, has highlighted the broader economic impact, emphasizing the creation of union jobs and the eventual increase in property tax revenues over time.

However, critics of the proposal warn that such an incentive could shift the tax burden onto Chicago residents. While Bally’s projects paying $18 million annually in property taxes under the proposed reduced rate—ten times more than the property’s prior contribution—opponents argue that this relief could come at the cost of increased taxes on homeowners and landlords. They also raise concerns about the performance of Bally’s temporary casino, which currently operates at the Medinah Temple in River North. Although it is the city’s only casino, the temporary venue has underperformed, generating just $16 million in 2024—far below the $35 million projected in the city’s budget.

Leverage from city’s fiscal struggles:

According to The Real Deal, Bally’s temporary venue at the Medinah Temple has fallen short of expectations in several key areas, including foot traffic and revenue per person. Despite these struggles, it remains the second-largest casino in Illinois in terms of gross gaming revenue (GGR) in 2024. Yet, Bally’s maintains that the financial viability of its permanent casino project hinges on the tax incentive. Without it, the company argues that the project’s long-term profitability—and its potential to generate substantial tax revenues—could be at risk.

The city’s ongoing financial challenges, including underfunded public pensions, give Bally’s some leverage in its negotiations. Chicago’s credit rating was recently downgraded by Standard & Poor’s (S&P), highlighting the city’s fiscal struggles. The casino is seen by some as a potential lifeline to shore up the city’s finances, with projections that it could generate $200 million annually for Chicago once fully operational, including gaming, property, income, and sales taxes. However, there are concerns about the broader economic impact of the tax incentive, particularly as the city grapples with pension obligations and budget shortfalls.

Supporters of the property tax break argue that such incentives are standard for large-scale developments and essential for attracting investment. They also point to Bally’s commitment to providing substantial funding for the city’s police and fire pensions, as well as its efforts to work with minority- and women-owned businesses, as evidence of the broader benefits of the project. The request is now entering its final stages, with demolition work at the former Tribune plant nearing completion. While Bally’s insists that the incentive aligns with prior agreements made under former Mayor Lori Lightfoot’s administration, the final decision rests with Mayor Johnson and the City Council.