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Bally’s Corporation is reassessing its strategy in Chicago after the city’s 2026 budget cleared a path for the legalization of video gaming terminals (VGTs), a move the casino operator has warned could materially undermine the economics of its $2 billion integrated resort currently under construction on the city’s Near West Side.
The development follows Mayor Brandon Johnson’s decision this week to allow the City Council’s $16.6 billion “alternative” budget to take effect on 1 January without his signature or veto, a procedural outcome that carries the same legal force as approval. Embedded in the budget is language that could enable the introduction of VGTs in Chicago for the first time, ending a long-standing municipal ban.
For Bally’s, which holds the city’s sole casino licence and is racing to open a permanent property by September 2026, the prospect of widespread VGT deployment across bars and restaurants represents a direct competitive challenge—one with implications not only for its own revenues, but also for the tax streams Chicago is counting on to fund public services and pension obligations.
A pivotal moment for Chicago’s casino model
Chicago’s casino framework was designed around exclusivity. When the city awarded its single casino licence to Bally’s in 2022, the operator agreed to a host community arrangement that included annual payments to the city and commitments to job creation, with gaming taxes earmarked in part for underfunded police and fire pension funds.
That model could now be under pressure.
VGTs, slot-style machines already prevalent across Illinois outside Chicago, are widely regarded as the most lucrative segment of the state’s gaming industry. Their potential entry into the city raises the risk of cannibalisation, as casual and convenience-driven play migrates away from the casino floor and into neighbourhood venues.
Bally’s has repeatedly argued that allowing VGTs within city limits would dilute casino revenues and reduce the tax base the city expects from its flagship gambling project.
Bally’s sounds alarm over revenue and jobs
Following the City Council’s passage of the budget, Bally’s issued a strongly worded statement outlining what it sees as the financial consequences of legalising VGTs alongside a single casino.
“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,” the company said. “This plan will lead to a 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.”
The operator also warned of employment fallout, stating that reduced casino performance could result in the loss of between 750 and 1,050 union jobs, undermining one of the project’s core justifications.
“Furthermore, this misguided tactic will lead to the loss of hundreds of good-paying, union jobs at the casino,” Bally’s added. “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.”
A project already under time and performance pressure
The VGT debate lands at a sensitive moment for Bally’s Chicago development.
Construction of the permanent casino has already faced delays linked to land acquisition and design changes, leaving the operator under pressure to meet a state-mandated opening deadline in September 2026. In the meantime, Bally’s has been operating a temporary casino at Medinah Temple in River North.
That interim venue has underperformed relative to projections included in prior city budgets. While the temporary casino has generated roughly $14.4 million in tax revenue for Chicago so far in 2025, city forecasts had anticipated closer to $35 million for the year.
Against that backdrop, any policy shift that further constrains revenue potential at the permanent site is viewed internally as a material risk to the project’s long-term viability.
The broader budget context: sports betting and airport gaming
The VGT provision is not the only gaming-related element of Chicago’s 2026 budget.
Both the mayor’s original proposal and the City Council’s alternative plan include a new 10.25% tax on Chicago-based sports betting operator revenue, layered on top of Illinois’ progressive state tax rates and Cook County levies. For major sportsbooks, the combined tax burden could exceed 50% at higher revenue thresholds.
The budget also revisits another component of the city’s casino licence: gaming positions at airports. Under the licence terms, Bally’s is permitted to install gaming at either O’Hare or Midway airports. The mayor’s budget envisions introducing those positions at Midway in 2026 and proposes procedural changes to speed up liquor licensing at the airport.
While revenue projections for airport gaming range between $30 million and $40 million annually, the budget does not specify how many gaming positions would be allowed, leaving key operational details unresolved.
Why Chicago lawmakers see VGTs differently
Supporters of VGT legalisation argue that Chicago has been leaving money on the table.
Illinois operates the largest VGT network in the United States, with nearly 49,500 terminals spread across more than 8,700 venues statewide. Through the first 11 months of 2025, VGTs generated more than $1 billion in net terminal income tax revenue, with roughly $148 million flowing directly to local municipalities.
Chicago, despite being the state’s largest city, receives none of that municipal share due to its prohibition on VGTs.
Alderman Anthony Beale, who introduced the ordinance to legalise VGTs and chairs the City Council’s Committee on License and Consumer Protection, has argued that even a modest rollout would generate meaningful revenue. During budget hearings, Beale projected that licensing fees alone could deliver approximately $6.8 million in 2026, even after accounting for the potential loss of Bally’s host community payment.
Using figures attributed to the Illinois Gaming Board, Beale has also estimated that annual VGT revenue for the city could ultimately range between $65 million and $100 million, depending on uptake and terminal density.
Source: Action Network
