Video Gaming Terminals in Chicago? Bally’s Corp. Hopes Not

Amidst ongoing financial challenges, the City of Chicago is considering a shift towards allowing video gaming terminals (VGTs). Mayor Brandon Johnson is easing his previous opposition to these machines to capitalize on this potential revenue boost.

Key Points

Chicago’s Mayor is now open to the idea of VGTs.
Slot-like games may affect the forthcoming Bally’s casino operations.
Chicago is currently facing significant financial issues.

Since the legalization of VGTs in Illinois through the Video Gaming Act in July 2009, Chicago has opted out of implementing them. However, with the city grappling with financial difficulties, Mayor Johnson’s recent statements suggest a change in direction.

Mayor Brandon Johnson considers VGT implementation as a safety measure for investments in Chicago.

The Video Gaming Act allows various establishments—such as bars, restaurants, and truck stops—to operate up to six terminals, with truck stops allowed to have up to ten. This decision could potentially open the door to Chicago residents and its visitors engaging with these machines for the first time since the law’s inception.

Illinois State Overview

Currently, there are approximately 50,000 VGTs operating throughout Illinois, the largest number of which are situated outside Chicago. With rising debts and pressures from city lawmakers, Johnson expressed openness towards legalizing VGTs.

“I’m open. I’ll just say it like that, right, because the work we need to do to build a safe and affordable city requires us to make critical investments,” Mayor Johnson remarked regarding legalization in a press conference.

The Impact of Bally’s Corp.

Bally’s Corp., tasked with developing a large-scale integrated resort at the former Chicago Tribune plant, anticipates significant revenue from its casino operations. Despite a rough start at its temporary venue, revenue from the Bally’s establishment is critical for enhancing the city’s financial resources.

Revenue from traditional casinos typically benefits the state more than the municipality.
Chicago receives approximately 12.3% of the Bally’s casino revenue, significantly higher than the mere 5% that would be acquired from VGTs at host locations.

According to details, the state claims 30% of a VGT’s gross revenue, with the hosting establishment and its terminal operator splitting 64.08% of the earnings equally. This structure leaves a minimal portion (0.92%) to manage administrative expenses incurred by the Illinois Gaming Board.

Current Benefits from VGTs

Despite lack of local implementation, Chicago benefits financially from the gaming activities elsewhere in the state. The state’s VGT tax supports both the Capital Projects Fund and the Local Government Video Gaming Distributive Fund, the latter benefiting only cities that permit VGTs.

The Capital Projects Fund was initiated under the state’s “$45 Billion Rebuild Illinois Plan,” approved in 2020. This package was crucial not only for casino funding but also for much-needed renovations throughout Chicago.

Conclusion

The emerging conversations around VGTs indicate a pivotal moment for Chicago, particularly in light of the city’s dire financial situation. If approved, the integration of video gaming terminals might provide the much-needed revenue boost to support various civic initiatives, while also impacting the forthcoming Bally’s casino project.

As the city navigates this new terrain, it could reshape the future of entertainment and revenue generation in one of America’s largest urban centers.