Bally’s Chicago Pauses Some Construction Amid VGT Dispute

Bally’s has paused construction of a hotel, events center, restaurants, and other amenities on the company’s planned Chicago casino after the city recently moved forward with a plan to legalize video gaming terminals (VGTs) as part of the 2026 budget.

The machines allow Windy City residents to gamble at convenience stores, bars, and other establishments. That has been a bone of contention with Bally’s, which is investing $1.7 billion in the casino resort.

The company alleges legalized VGTs violates the 2022 agreement with the city to build the permanent casino and amenities. Aldermen included the terminals in the budget despite the objections of Mayor Brandon Johnson (D), who has also said legalizing VGTs violates the agreement. The slowdown in construction is now seen as a response to the city’s VGT plan.

“Bally’s issued a notification to the Chicago Community Builders Collective that it is resetting the pace of construction of elements of Bally’s Chicago permanent casino,” the company said in a statement.

“The potential for an uncontrolled proliferation of video gambling terminals is in breach of the city’s commitment not to expand gaming in the Host Community Agreement and creates uncertainty that could be harmful for Bally’s Chicago prospects.”

Slowdown Could Impact City Revenue

Despite the slowdown on the hotel and other amenities, Bally’s said the casino itself is still on track to open on time in early 2027. The company has promised to ramp up construction again once the dispute is resolved.

“We do not take this lightly because of the potential impact on many of the 1,500 union trades people who have been working hard to build Bally’s Chicago,” the company said. “We will continue to assess our options, which we hope will include more productive discussions with the mayor’s office and city council.”

Bally’s has now hired a law firm to help resolve the dispute, according to the Chicago Tribune. The newspaper also reported that in addition to pausing construction, the company plans to withhold a $4 million payment to the city next month.

The disagreement and pause in construction could impact city revenue in the coming years. Chicago estimates that the property could provide $200 million in local tax revenue, but a delay in opening the hotel and other amenities could see that dip considerably.

There’s Around 50,000 VGTs In Illinois

Illinois passed the Video Gaming Act in 2009, allowing local jurisdictions to legalize the games. Chicago didn’t approve the games until last fall.

There are now about 50,000 VGTs at more than 8,700 establishments across the state, according to the Illinois Gaming Board (IGB). That total is more than any other state in the country. Casino operators have said the machines cut into their gaming revenue.

So far this year through July, VGTs have generated more revenue than the state’s 17 casinos, according to the IGB.

Difficult Environment For Gaming Operators

Beyond the VGT issue, Illinois has created a more difficult environment for gaming operators in recent years. In 2025, the state added a 25-cent tax on sports wagers for an operator’s first 20 million bets, which rises to 50 cents per bet beyond that threshold.

This followed another increase in 2024 that instituted a progressive tax structure on operators up to 40%. Following the per-wager tax hike, some sportsbooks passed the tax onto customers via transaction fees and others raised betting minimums.

There were 28 million fewer bets after the tax went into effect in September compared to the same time the previous year. Some lawmakers have now pushed to repeal the per-wager tax.

Meanwhile, the city of Chicago instituted a 10.25% tax on sports betting operators this year.

Governor Seeks Higher Tax Rate On Table Games

In 2025, Illinois saw $1.09 billion in commercial casino gaming revenue, according to the American Gaming Association. That was an increase from $730.5 million in 2024, boosted by the opening of a new casino. The state doesn’t have tribal casinos.

The gaming industry faces a graduated wagering tax structure on casino slot machines and electronic games, which ranges from 15% to 50%. Table game revenue outside Chicago is taxed at 15% up to $25 million and then 20% beyond that. However, Gov. JB Pritzker (D) has pushed to raise that rate as high as 50%.

Additionally, casinos also pay an admission tax per customer that is scaled by total annual admissions, ranging from $2 to $5 per person, according to the Illinois Department of Revenue.

Critics have argued that the gaming tax and regulation landscape in Illinois discourages operators to build and invest in the state. That appears to be playing out in the Bally’s-VGT dispute.