Bally’s Ponders Next Move As Chicago Set To Legalize VGTs

Chicago Mayor Brandon Johnson’s decision Tuesday to allow the 2026 budget created by the city council to take effect Jan. 1 — he will neither veto the ordinance nor sign it, which has the same effect as signing it — leaves Bally’s with some decisions to make regarding its $2 billion casino currently under construction in River West.

The $16.6 billion “alternative” budget includes the potential to legalize video gaming terminals (VGTs), which are the biggest source of gaming tax revenue in Illinois by a wide margin. They are currently banned in Chicago via city ordinance, though an ordinance to legalize them passed out of the city council’s Committee on License and Consumer Protection in September.

Johnson did not directly address the gaming portion of the budget in his remarks Tuesday, but his office had been skeptical of VGT revenue projections presented in the “alternative” budget during debate with the city council over the weekend.

Bally’s is racing to meet a state-mandated September opening, having an overcome a series of logistical hurdles that included a delay in taking control of the parcel of land on which it is building the casino and construction issues with its initial plans. Bally’s currently is operating a temporary casino at Medinah Temple in nearby River North, but the venue has failed to meet annual revenue projections from previous city budgets since opening in September 2023.

Both components of the “alternative” budget that passed over the weekend included a 10.25% tax on Chicago-based sports betting operating revenue. Johnson initially proposed the levy in his budget, and aldermen retained it for theirs.

Bally’s wary of cannibalization

Bally’s views VGTs as a direct threat to generating revenue. As the city council wrested away control of the budget process from the mayor’s office, Bally’s noted the “alternative” budget offered the potential for substantial revenue losses. In turn, less gaming revenue would lead to less tax receipts for the city and an inability for Bally’s to commit to a projected 3,000 jobs the casino would create.

Bally’s released another statement Monday following the city council’s passage of each budget component over the weekend. It pointed out the introduction of VGTs would impact the ability to generate tax revenue for the city’s underfunded police and fire pension funds, which was projected to be $200 million annually at full maturity:

Every alderman should be gravely concerned about the serious loss of casino revenue for the City of Chicago—and specifically for police and fire pension funds—that will result from this vote. This plan will lead to yearly total tax loss of $260 million from Bally’s Chicago Casino. Of that, the City of Chicago stands to lose roughly $70 million in tax revenue yearly, not including the $4 million payment from the Host Community Agreement between the City and Bally’s. 

Furthermore, this misguided tactic will lead to the loss of 750 to 1,050 good-paying, union jobs at the casino. The City Council and Mayor must work together quickly to address this rushed and regressive provision to prevent the serious harm it will cause Chicagoans.

Per the terms of the Chicago casino license, a licensed operator is allowed to install gaming positions at either O’Hare International or Midway International airports. Johnson’s budget called for the introduction of those positions at Midway in 2026, and to help to that end, proposed waiving the 35-day review period for a liquor license at the airport location.

Johnson’s budget did not specify how many gaming positions Bally’s would be permitted to install at Midway, though it projected between $30 million and $40 million in annual revenue. As a point of comparison, Bally’s temporary casino has generated $14.4 million in tax revenue for the city in the 2025 calendar year, with Johnson having budgeted $35 million in receipts.

The case for VGTs

Illinois is home to the largest VGT network in the country, with nearly 49,500 terminals in operation across more than 8,700 establishments statewide. Despite a non-presence in Chicago, VGTs have generated $1.02 billion in total Net Terminal Income (NTI) tax revenue through the first 11 months of 2025, of which $148 million has gone to local municipalities.

In making the case for legalization during the budget hearings, Ald. Anthony Beale — also the author of the ordinance that passed out of the licensing committee in September — projected the $6.8 million in revenue generated for 2026 would come solely from licensing fees that came with legalization.

That figure includes absorbing the $4 million loss that comes with legalizing VGTs — Beale all but conceded it would allow Bally’s to re-open the Host Community Agreement it signed with the city. In budget talks last week, the mayor’s office argued the “alternative” budget would result in a net loss of $3 million for the city with the legalization of VGTs between losing the $4 million payment and a lesser implementation than Beale’s projection.

Beale’s projection can be argued as ambitious; his figures estimate 80% of the 3,300 venues in the city with liquor licenses would apply to host VGTs. In turn, those 2,640 venues would have 11,880 terminals — an average of 4.5 per venue when they are allowed to have a maximum of six. That would generate $10.8 million in licensing fees.

Beale, using figures he said came from the Illinois Gaming Board, estimated VGT revenue for the city would range between $65 million and $100 million annually. The state currently taxes NTI at 35%, with the host municipality getting 5%.