Bally's threatens to sue Chicago over video gambling plan
Bally’s Corporation has threatened to sue the City of Chicago unless officials reverse their decision to legalise video gaming terminals (VGTs) in bars, restaurants and convenience stores, arguing that the move breaches the agreement under which the company committed to develop the city’s first casino.
The dispute has placed Chicago’s gaming policy under renewed scrutiny, with Bally’s and Mayor Brandon Johnson opposing the expansion of VGTs while supporters in the City Council argue the machines will generate additional revenue for a city facing a significant budget deficit.
According to Bally’s, allowing VGTs across Chicago undermines the Host Community Agreement signed in 2022, under which the company agreed to develop the city’s first casino. The operator says the agreement was negotiated on the understanding that casino-style slot gaming would remain exclusive to Bally’s within city limits and has warned it is prepared to pursue legal action if that exclusivity is removed.
Bally’s says exclusivity formed the basis of the deal
The warning came during a hearing of the Chicago City Council’s Committee on Workforce Development. Christopher Jewett, Bally’s Senior Vice President for Corporate Development, told aldermen that the company invested in Chicago after reaching an agreement with former Mayor Lori Lightfoot’s administration in 2022.
Jewett said Bally’s accepted extensive financial commitments because Chicago had maintained a long-standing prohibition on VGTs.
“Exclusivity was promised,” he told committee members.
According to Jewett, Bally’s would not have entered into the agreement had it known the City Council would later authorise another form of gambling that directly competes with its casino. He added that if VGTs are introduced throughout Chicago, the company would seek to renegotiate the agreement and would use the courts if necessary. Bally’s also argues that permitting VGTs outside its casino would render the agreement null and void.
How the dispute developed
The disagreement began after the City Council approved Chicago’s US$16.6 billion budget for 2026 in late 2025. As part of the budget, aldermen voted to lift Chicago’s long-standing ban on VGTs, allowing eligible bars, restaurants and other licensed businesses to install the machines. The measure was expected to generate approximately US$6.8 million in licensing revenue during 2026.
The city’s estimates were based on around 80 percent of Chicago’s 3,300 eligible establishments with off-premise liquor licences applying for VGTs and the Illinois Gaming Board taking six to eight months to process applications.
Mayor Brandon Johnson opposed the measure, arguing that expanding VGTs could undermine Chicago’s agreement with Bally’s. However, the budget became law after he neither signed nor vetoed it.
First licences approved despite opposition
The debate intensified earlier this month when the Illinois Gaming Board approved the first six applications for VGTs in Chicago. The approvals covered Bar 106, Lawlor’s Bar and Hippo’s Bar in Mount Greenwood, Cork and Kerry in Beverly, Half Sour in the Loop and Eggsperience in Lakeview. Although the state approved the applications, each venue must still obtain a city licence before the machines can begin operating.
Later, Johnson asked the City Council to reverse its earlier decision to legalise VGTs. His administration proposed an ordinance that would once again prohibit the machines while authorising additional agreements with Bally’s.
A spokesperson for the mayor later said the Workforce Development Committee would hold only a hearing on the proposal rather than immediately bringing it to a vote, indicating the administration had not yet secured sufficient support to restore the ban.
By then, another 285 bars and restaurants had already applied for state VGT licences, showing the scale of the planned rollout if the ordinance remains unchanged.
Bally’s warns of financial impact
Bally’s argues that widespread VGTs would weaken both its temporary casino and the permanent integrated resort currently under construction.
The company has warned that the policy could reduce annual tax revenue generated by Bally’s Chicago Casino by around US$260 million, including approximately US$70 million in tax revenue for the City of Chicago. It has also warned that between 750 and 1,050 union jobs could be affected while reducing funding intended for police and fire pension obligations.
Bally’s has further said it would stop making its annual US$4 million payment to the city and would no longer honour commitments relating to diversity and union hiring if the agreement is breached.
Those concerns predate the current legal threat. In April, Bally’s Vice President of Government Relations Elizabeth Suever warned the City Council that allowing VGTs would require renegotiation of the Host Community Agreement and reduce casino tax revenue before the permanent casino opens.
Airport proposal offered as an alternative
Alongside its legal warning, Bally’s proposed installing slot machine lounges at O’Hare International Airport and Midway International Airport instead of expanding VGTs across neighbourhood businesses.
Jewett said each of O’Hare’s four passenger terminals and Midway’s passenger terminal could accommodate one gaming lounge. According to Bally’s, each lounge could generate approximately US$5 million annually in gaming and admission taxes, enough to replace the revenue expected from VGT licensing.
Alderman Anthony Beale rejected that argument, saying airport gaming revenue must remain within the enterprise fund that supports airport operations and therefore could not replace the city’s projected VGT income. He also noted that Bally’s had already been authorised by the Illinois General Assembly to introduce airport gaming but had not done so.
Political divisions spill into City Hall
The dispute over VGTs has exposed deep divisions within Chicago’s political leadership. Johnson asked Workforce Development Committee Chair Mike Rodriguez to hold a hearing as part of efforts to repeal the ordinance permitting VGTs in bars, restaurants and bowling alleys.
However, the meeting quickly became contentious.
Alderman Anthony Beale questioned Business Affairs and Consumer Protection Commissioner Ivan Capifali about the continued operation of an estimated 7,000 sweepstakes gaming machines across Chicago.
Sweepstakes machines resemble slot machines but operate in what officials describe as a legal grey area by offering free-play options and issuing coupons instead of direct cash payouts.
Capifali declined to discuss the issue, saying he had appeared before the committee only to address implementation issues surrounding the VGT ordinance rather than broader gambling policy.
The exchange escalated after Beale criticised the commissioner and called for his resignation before moving to adjourn the hearing.
Beale also accused Johnson of bypassing the City Council’s License and Consumer Protection Committee, which had originally approved the VGT ordinance, by instead referring the issue to the Workforce Development Committee. License Committee Chair Debra Silverstein similarly argued that any proposal to repeal the ordinance should have returned to her committee.
The hearing ended without a vote, leaving the future of the VGT ordinance unresolved.
Casino project provides backdrop to dispute
The disagreement comes as Bally’s continues developing Chicago’s first permanent casino. The company was selected in 2022 to build the project under a Host Community Agreement that included annual payments to the city along with commitments relating to employment and community investment.
Bally’s opened a temporary casino at Medinah Temple on 9 September 2023 while work progressed on the permanent US$1.7 billion casino and entertainment complex in River West.
Construction has since faced several setbacks, including work stoppages linked to demolition debris, the use of unapproved contractors, financing challenges and engineering changes required because of city infrastructure. As a result, the permanent casino, originally expected to open in 2026, is now scheduled for completion in 2027.
To ensure operations continue during construction, the Illinois Gaming Board approved an extension allowing the temporary Medinah Temple casino to remain open until September 2027 following changes approved by the Illinois General Assembly and Governor JB Pritzker.
Pressure on the temporary casino
The legal dispute comes as Bally’s temporary casino has generated less tax revenue than originally projected.
During 2025, the temporary casino produced US$124.6 million in adjusted gross receipts and US$15.8 million in city tax revenue, below the city’s budget estimate of US$16.5 million. The gap had been wider in 2024, when Chicago budgeted US$35 million but received about US$16 million.
Bally’s argues that introducing VGTs before the permanent casino opens would place further pressure on a project that is already operating below initial expectations while construction continues.
What happens next
The next step depends on whether the City Council chooses to repeal the ordinance authorising VGTs or allows licensed establishments to move forward once city approvals are issued.
While Johnson continues to seek support to restore Chicago’s long-standing ban on VGTs, supporters of the policy argue that legalising the machines will generate additional revenue for the city and provide new income opportunities for local businesses.
For Bally’s, the outcome will determine whether the company continues operating under the terms of its 2022 Host Community Agreement or follows through on its threat to pursue legal action over what it says is a fundamental change to the agreement that underpinned its investment in Chicago’s first casino.
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