Struggling Finances and Competition Hamper Bally's Casino in Chicago, Leading to a Drop in Credit Rating
Bally's Corp., the Rhode Island-based gambling giant, is facing some serious financial hurdles with its $1.7 billion Chicago casino project, causing concern for its credit rating and upcoming development plans. Here's the lowdown.
Financial Fistfights
Bally's has accumulated a considerable amount of debt, resulting in a predicted EBITDAR leverage of 7.0x in 2024, which may surge to 8.0x-9.0x due to additional debt issuance and lease commitments. To cover the remaining $250 million, the company is looking to issue an IPO exclusive to women and minority investors, subject to approval by the SEC. While they've managed to secure $940 million from private capital, time is ticking as the market waits.
On the other hand, the company boasts a healthy $620 million available on its revolving credit facility. However, Fitch warns that crunching cash is a looming issue due to continued financial obligations.
Chicago's Cutthroat Casino Scene
The permanent casino at 777 W. Chicago Ave., slated to open in September 2026, will breach a fiercely competitive landscape. With steep tax rates, building a loyal customer base, and the underperforming temporary Medinah Temple casino, it's a big gamble.
The Medinah location, reporting revenue of just $8.8 million in February — its lowest monthly earnings in over a year — isn't helping matters. Bally's CEO Robeson Reeves concedes that returns at the temporary Chicago casino have fallen short, yet remains hopeful about the excitement brewing at the permanent site.
Petitioning for a Property Tax Holiday
Bally's has appealed for a $300 million property tax reduction over a ten-year period, but this proposal still awaits approval from the Chicago City Council's Rules Committee.
Cash Flow Battles and Legal Tussles
Bally's Chicago project has been marred by construction delays due to Illinois regulators and scrapped a controversial minority investment offer, which may have averted potential legal issues but could impact investor trust. Add to that, the financial struggles of its temporary casino, and the gloves are truly off.
Addressing these financial challenges is crucial for Bally's Corp. to ensure the success of its Chicago project, safeguard investor confidence, and keep its growth momentum rolling. There's no denying that it's a high-stakes game, but Bally's is determined to roll the dice.
In the end, it's all about playing the odds and staying focused on the jackpot. Good luck, Bally's!
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[1] https://www.cardplayer.com/poker-news/26128-ballys-scraps-current-minority-investment-offer
[2] https://www.newsday.com/business/business-news/ballys-corporation-credit-ratings-downgraded-1.22869336
[3] https://www.gamingamerica.com/gaming/north-america/us/23662-detour-ahead-as-ballys-to-sell-a-$735m-stake-in-twin-river-casino-hotel-property/
[4] https://www.crainscleveland.com/sponsored/ballys-chicago-casino-delayed-by-illinois-regulators/
[5] https://www.ballyscorp.com/content/dam/ballys-corp-assets/corporate/investor-relations/documents/1Q22-Earnings-Presentation.pdf
- Despite the ongoing financial hurdles in its $1.7 billion Chicago casino project, Bally's is planning to issue an Initial Public Offering (IPO) exclusively for women and minority investors to cover the remaining $250 million, subject to approval by the SEC.
- In the highly competitive Chicago casino scene, Bally's permanent casino, set to open in September 2026, will face steep tax rates and the challenge of building a loyal customer base amidst the underperforming temporary Medinah Temple casino.
