Posted on: March 7, 2024, 02:41h.
Last updated on: March 8, 2024, 10:57h.
Appearing before the Nevada Gaming Control Board (NGCB) Wednesday, executives from Bally’s (NYSE: BALY) told the regulators that the company is trying to close a funding gap of $800 million for its permanent Chicago casino.
That means of the project’s estimated $1.1 billion cost , the regional casino operator currently has just $300 million to allocate to it. Bally’s CFO Marcus Glover told the NGCB the gaming company is having conversations with a potential financing partner that wasn’t identified, and that he hopes the matter will be resolved in the coming months.
We’re buying out the (Chicago) Tribune site, which will be the location of the permanent casino,” said Glover at the NGCB meeting. “We have $800 million of the $1.1 billion balance left on the project, and we have a funding gap that we’re trying to solve for $800 million. We feel pretty good about those conversations and that being resolved by hopefully summer of this year.”
The chief financial officer added that Bally’s has a $500 million credit facility in place, and that it’s used $250 million of that sum for land at the Freedom Center, which will be the site of the permanent casino.
Critics of Chicago Casino Plan Sound-Off
Since Bally’s was awarded the lone Chicago casino permit in May 2022 by former Mayor Lori Lightfoot (D-Chicago), there’s been no shortage of critics. They claim the bidding process was flawed, or that the city isn’t the right place for a Las Vegas-style integrated resort.
One of those groups is Bally’s Chicago Watch — an X (formerly Twitter) feed dedicated “to exposing the truth about the Bally’s Chicago casino project.” The group has no ties to Bally’s or the city. In a Xeet posted earlier today, the group said that Glover noting Bally’s is facing a shortfall of $800 million implies the gaming company didn’t have the financial resources to properly execute the Chicago project when it was selected by Lightfoot.
Bally’s Chicago Watch noted that the gaming company previously pledged to allocate $1.7 billion to the Chicago venture. But that figure has been pared to $1.1 billion.
That criticism comes on the heels of reports that emerged last December that there may be multiple investigations, including one that’s federal, into how the city awarded the permit to Bally’s.
Bally’s Has Some Financing Levers
Glover didn’t get into specifics regarding alternative plans for the $800 million needed to drive the Chicago casino across the finish line. But contrary to speculation that’s surfaced in some corners, Bally’s has avenues for raising capital should the aforementioned conversations with a lender fall through.
The gaming company owns a significant portion of the real estate on which its other casinos reside, and has previously shown a willingness to sell some property holdings to raise cash. It’s also possible the operator could decide to sell the operating rights to Tropicana Las Vegas, as the fate of that soon-to-be-demolished casino resort is up in the air because of uncertainty surrounding plans for a Major League Baseball stadium.
Bally’s could also sell corporate debt and/or stock to raise cash. But neither option is appealing because the bonds would carry high interest rates, and selling equity would dilute current investors. Glover didn’t discuss any of the aforementioned ideas with the NGCB.
