In recent developments that highlight the intricate dynamics of the gaming industry in Chicago, Bally’s Corporation is encountering significant financial hurdles as it progresses with its ambitious $1.7 billion casino project at 777 W. Chicago Ave., scheduled to open in September 2026. A series of credit downgrades by major rating agencies, including Fitch Ratings, has intensified the scrutiny of the project’s viability against a backdrop of market saturation and high taxation.

Financial strain and market challenges:

Fitch Ratings recently adjusted Bally’s credit rating downward from B to B-, a change reflecting concerns over “execution risk in the development of the Chicago projects,” along with the company’s high debt levels. This downgrade follows similar actions from other major Wall Street ratings agencies since Bally’s secured the Chicago casino license in 2022, escalating the cost of capital for the company amidst its expansive developmental pursuits.

The primary factors contributing to the financial strain include the saturated gaming market in Chicago, a higher-than-average gaming tax rate, and the usual challenges associated with ramping up a new casino development. Fitch analysts have pointed out that while Bally’s is expected to have “sufficient funding to complete” its casino, these market dynamics pose substantial risks to maximizing its potential financial returns.

In response to these financial challenges, Bally’s secured $940 million in private financing last year to bridge a considerable funding gap. However, its innovative plan to raise an additional $250 million through an initial public offering targeted at women and minority investors has not yet received the green light from the U.S. Securities and Exchange Commission. Complicating matters further, the initiative has faced legal challenges, with lawsuits filed by groups claiming the program discriminates against white male investors.

Despite these hurdles, Bally’s is pressing forward, having initiated the sale of $195 million in private shares to bolster its financial position. The company remains committed to reviving its minority investment program, which is required under the agreement signed with former Mayor Lori Lightfoot’s administration.

Operational performance and prospects:

While Bally’s has become a top draw in Illinois, welcoming its two millionth visitor since opening a temporary casino at the historic Medinah Temple, its financial performance has not met expectations. The casino’s revenue in February marked its lowest monthly intake in over a year, further complicating the financial outlook as it prepares for the grand opening of its permanent site.

According to Chicago Sun-Times, Bally’s CEO, Robeson Reeves, acknowledged the underwhelming performance but expressed optimism about future prospects, noting in the company’s annual report that “returns remain below our expectations, though we are hearing from customers that they are increasingly excited by what is starting to happen a few blocks northwest at the permanent site.”

As Bally’s navigates these financial and operational challenges, the future of its Chicago casino remains a pivotal aspect of its broader strategy to strengthen its market position. With potential property tax breaks that could save nearly $300 million over 10 years still pending in the City Council, the resolution of these financial structuring and market positioning challenges will be crucial for Bally’s as it aims to transform its Chicago venture into a successful enterprise.