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Bally’s Chicago Underwhelms, Falls Far Short of Revenue Projections

Bally’s Chicago, located inside the historic Medinah Temple, is on damage control. That’s after the temporary casino failed to come anywhere near its preopening revenue projections.

Bally's Chicago gaming revenue
There was much fanfare when Bally’s opened its temporary casino in Chicago last September. However, after nearly four months in operation, the casino has failed to realize preopening gaming revenue forecasts. (Image: Getty)

Bally’s Chicago opened on September 9 with 800 slot machines and 56 live dealer table games. The temporary 34,000-square-foot gaming facility is supposed to help bankroll the Rhode Island-based gaming operator’s construction of its permanent $1.7 billion resort casino at the Freedom Center.

The temporary casino was authorized by state and city officials also in part to immediately inject gaming tax money into Chicago’s nearly insolvent police and firefighter pension fund.

When then-Chicago Mayor Lori Lightfoot (D) approved the Bally’s bid, her office projected that the temporary casino would generate approximately $12.8 million in gaming tax proceeds for the city in 2023. The tax projection assumed Bally’s would win $102.5 million in 2023, with $61.5 million from slots, $40 million from tables, and $1 million from sports betting.

Per revenue reports released by the Illinois Gaming Board (IGB) on Wednesday, Bally’s Chicago is revealed to be severely underperforming.

Lackluster Start

According to the IGB, Bally’s Chicago generated gross gaming revenue (GGR) between September through December of just $30.4 million, a far cry from Lightfoot’s $102.5 million projection. The city’s gaming tax share amounted to a little more than $3.1 million — $9.7 million less than forecast.

Bally’s Chicago officials say unease is unwarranted. The temporary casino opened later than expected because of regulatory delays, they claim, and the property is still ramping up its marketing efforts to become part of the Windy City landscape.

Bally’s continues to build its relationship with Chicago gaming customers by offering our guests new and convenient ways to visit the property,” said Bally’s Chicago General Manager Mark Wong. “We’ve added free parking, new promotions, and expanded hours to meet customers’ expectations.”

Those efforts, which additionally include a controversial shuttle service between the casino and Chicago’s Chinatown neighborhood, resulted in the casino experiencing its best month to date in December. It counted nearly 100K admissions during the 31 days, and won more than $8.5 million from gamblers. The daily average of roughly 3,220 visitors represents a considerable uptick on the 2,681 daily patrons the casino reported in October, its first full month in business.

Bally’s last year delivered Chicago a one-time upfront payment of $40 million to secure the city’s integrated resort license. Those funds provided an immediate pension benefit for the first responders.

Lofty Projections

Despite December being a strong month for Bally’s Chicago, the temporary facility has lofty revenue targets in the years ahead.

In 2024, city officials expect the casino to win $242.7 million and deliver the city $34.4 million in gaming taxes. The revenue projection grows to $253.6 million in 2025, and to $638.6 million in 2026, when the permanent resort is expected to open.

There are many concerns about whether Bally’s has the financial wherewithal to bring the $1.7 billion project to reality. Bally’s is also reportedly facing a federal investigation into how it beat out other casino bidders for the Chicago gaming license.

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Bally’s, MGM Among Casino Stocks Hedge Funds Pared in Q2

Bally’s (NYSE: BALY) and MGM Resorts International (NYSE: MGM) are among the gaming equities in which some well-known hedge funds reduced their positions in the second quarter.

hedge funds casino stocks
The famous charging bull on Wall Street. Hedge funds altered positions in casino stocks in the second quarter. (Image: Reuters)

Bally’s, the Rhode Island-based regional casino operator that’s long been a favorite of hedge funds, slumped 22.2% in the June quarter, the period in which John Paulson’s eponymous hedge fund exited its position in the stock.

Paulson & Co. originally bought Bally’s shares in the second quarter of 2021, but a new Form 13F filing with the Securities and Exchange Commission (SEC) indicates the money manager liquidated the remains of that stake this year.

Major institutional investors, including hedge funds, are required to file 13F’s within 45 days of the end of the prior quarter. They aren’t required to disclose the dates on which they bought or sold securities, so there’s no way of knowing exactly when Paulson & Co. departed the Bally’s position.

Hedge Funds Also Tinkered with MGM, Wynn Positions

Corvex Management, the hedge fund run by MGM board member Keith Meister, pared its exposure to the Bellagio operator in the June quarter.

Meister’s firm also eliminated its stake in UFC parent Endeavor Group Holdings, Inc. (NYSE: EDR). Endeavor has direct gaming exposure of its own as it controls the OpenBet sports wagering technology platform. Shares of MGM declined modestly in the second quarter while Endeavor Group stock posted a small gain during that period.

Wynn Resorts (NASDAQ: WYNN) was also among the casino operator equities that saw a professional money manager sell some shares. 3G Capital Partners, the investment firm co-founded by Brazilian billionaire Alexandre Behring, reduced its Wynn position to 105K shares from 117,500 at some during the April through June period.

Wynn was one of several stocks in which 3G trimmed positions during the previous quarter. It’s the only gaming equity currently owned by the money manager.

Whale Rock Initiates DraftKings Stake

As the stock surged as the sportsbook operator was notching its profitable quarter as a publicly traded company, DraftKings (NASDAQ: DKNG) caught the attention of at least one hedge fund in the April through period.

In a 13F published on Monday, Whale Rock Capital Management revealed a new stake in the gaming company. That hedge fund bought more than 8.11 million shares of the gaming company in a position valued at $215.68 million in the second quarter.

DraftKings is the only gaming equity held by Whale Rock, but the hedge fund owns a slew of technology equities, some of which are emerging growth names, as is DraftKings.

Whale Rock, which has been in business since 2006, is based in Boston. That’s DraftKings’ home city, too.

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Major League Baseball Park, Oakland A’s to Join Bally’s Tropicana Las Vegas

major_league_baseball_park_oakland_as_to_join_ballys_tropicana_las_vegasBally’s Corporation and Gaming & Leisure Properties (GLPI) have announced a binding agreement with the Oakland Athletics of Major League Baseball (Oakland A’s) to construct a Major League Baseball park at Bally’s Tropicana Las Vegas.

Bally’s consummated its purchase of the gaming and other assets when GLPI and PENN transferred ownership of the non-land assets of the Tropicana Las Vegas to Bally’s for $148 million in cash paid to GLPI on September 27, 2022.

Bally’s still intends to operate a casino from the location and expand assets on other portions of the property.

2.5 Million New Visits to the Location Expected Annually

The park is expected to deliver two and a half million fans per year to the only site of its type on the Las Vegas Strip. Benefits heralded in the announcement include enhanced attraction at the site driven by increased visitations, and the ability to further develop the site in a phased manner with a financial approach based on disciplined further investment.

Additional enhancements for iconic and sponsoring brands at one of the busiest traffic intersections in America which sees over seven-million visitor impressions each month, and significant marketing database growth for Bally’s to exploit as part of its global omnichannel growth strategy.

GLPI maintained ownership of the property which it had earlier purchased and was leased back to Penn National Gaming prior to Bally’s purchasing the gaming assets, license rights, etc. GLPI will pitch in up to $175 million toward improvements and receive future rent increases based on the increased value.

Bally’s is also banking on increased footfall for the casino and other assets through the ballpark and other attractions.

The Oakland A’s or stadium authority will have about 9 acres of the 35-acre site assigned for development by Bally’s and GLPI. The stadium would hold as many as 30,000 visitors at a time.

Oakland’s Triple-A minor league team, the Aviators already calls Las Vegas home.

Bally’s Confident but Hedging its Bet

Bally’s kept an Ace in the hole to assign assets and attract other partners, and it has other parties expressing interest in a similar offering. However, it is expected the necessary approvals from the MLB Association as well as public finance and legislative agreements will all come into place to make the current plan a reality.

Bally’s President, George Papanier, said “We are honored to have been selected to partner with the Oakland Athletics on this monumental step in helping to bring Major League Baseball to the great city of Las Vegas and to be a part of the once-in-a-generation opportunity of having a professional baseball team located within a short walk of the Las Vegas Strip.

“The Tropicana has been a landmark of Las Vegas for generations, and this development will enhance this iconic site for generations to come. We are committed to ensuring that the development and ballpark built in its place will become a new landmark, paying homage to the iconic history and global appeal of Las Vegas and its nearly 50 million visitors a year,” Papanier noted.

Among other comments, Peter Carlino, Chairman and CEO of Gaming & Leisure Properties said: “We are pleased to help facilitate their exciting vision for a new ballpark through our contribution of nine acres of the Tropicana site and look forward to the prominent place that the overall project will occupy in the Las Vegas skyline. The Oakland Athletics’ interest in developing a world-class Major League Baseball stadium on our site underscores its status as one of the most prime locations on the Las Vegas Strip and will enhance any future development of our remaining 26 acres.

“As the project moves forward, we also expect that Gaming & Leisure Properties will have opportunities to further invest in the various aspects of the overall project to the extent we deem that doing so will generate an attractive risk-adjusted return on our shareholders’ capital.”

Oakland A’s President Dave Kaval added: “We are excited about the potential to bring Major League Baseball to this iconic location. We are thrilled to work alongside Bally’s and Gaming & Leisure Properties, and look forward to finalizing plans to bring the Athletics to Southern Nevada.”

Source: Bally’s to replace Las Vegas Strip casino with MLB ballpark, G3 Newswire, May 16, 2023

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Casino Crime Round Up: Man Murdered Near Bally’s Casino Atlantic City

A 34-year-old man was fatally shot on the Atlantic City boardwalk near Bally’s Casino on Saturday morning. A suspect was arrested.

Police officers on the Atlantic City boardwalk near Bally’s Casino
Police officers on the Atlantic City boardwalk near Bally’s Casino, pictured above. A man was fatally shot outside the casino this weekend. (Image: KYW)

Jahlil Boston, 34, of Egg Harbor City, N.J., was charged with murder and several other weapons and drug counts, prosecutors said.

The shooting took place at about 2 a.m. in the 1900 block of the boardwalk near Johnny Rockets restaurant at Bally’s.

The victim was identified by the Atlantic County Prosecutor’s Office as Eric Wynn of Atlantic City.

Boston was apprehended shortly after the killing. He allegedly used a semi-automatic firearm in the shooting.

The prosecutor’s office in a statement noted that Shawn Steuber, a retired local officer now at the Atlantic City Headquarters for Intelligence Logistics Electronic Surveillance, quickly got a description of the suspect for police.

Boston remained in custody as of early this weekend at the Atlantic County Justice Facility.

The weapons charges against Boston include: unlawful possession of a weapon, possession of a weapon for an unlawful purpose, possession of a weapon while in the course of possessing cocaine with the intent to distribute, possession of large capacity ammunition and magazine, and possession of a firearm by a person previously convicted of a predicate offense.

He was also charged with these drug counts: possession of cocaine, possession of cocaine with the intent to distribute, and possession of cocaine with the intent to distribute while in a public zone.

It appears Boston knew Wynn before the shooting took place, officials said.

Officials didn’t release further details on the killing. It was unclear why the two men were near the casino.

Alleged Laundering of $38K at Hollywood Casino Joliet

John Tomaras was charged with money laundering following a series of recent incidents involving over $38,000 at Illinois’ Hollywood Casino Joliet.

The 53-year-old Rockdale, Ill. man allegedly laundered $38,180 at the casino between February 24 and March 10, according to Patch.

Tomaras was arrested on March 10. His bail was set at $50,000.

He was booked at Will County Jail on March 11. He was released after posting bond.

Man Arrested for Indiana Casino Cheating

Gankhuyag Noosoi was arrested after allegedly cheating while playing Baccarat at an Indiana gaming property.

The 54-year-old Chicago man was charged with cheating at gambling after a January 17 incident, according to the Chicago Tribune.

He either made a winning bet after the hand ended or he changed the bet to a winning hand from a losing hand after the Baccarat game was decided, the Tribune reported based on court documents.

Noosoi changed his bet from banker to player position as the dealer collected losing bets.

The casino lost $160 from the cheating, the report added. Noosoi paid the dealer $25.

Noosoi apparently had difficulty communicating with casino staff. He couldn’t speak fluent English given his native language is Mongolian.

The casino is located in Hammond, Ind. It wasn’t named in a media report.

In January 2022, Noosoi was also charged with cheating at gambling in Lake County, Indiana, the Tribune reported. It’s unclear how that charge was adjudicated in court.

Accused Casino Bandit Faces Up To 20 Years in Prison

Aaron Michael Kelly accepted a plea deal this month for the April 2022 armed robbery in the parking lot of Maryland’s Hollywood Casino.

The 23-year-old Middle River, Md., man now faces up to 20 years in prison, according to Maryland’s Cecil Whig newspaper.

Kelly agreed to plead guilty on March 6 to armed robbery and theft of more than $100 and less than $1,500 at the Cecil County Circuit Court, the newspaper added. He likely will be sentenced on May 16 by Judge Brenda A. Sexton.

The armed robbery took place in a parking lot at Hollywood Casino in Perryville on April 9, 2022.

Kelly allegedly opened the driver’s door of a parked car. He then placed a handgun on the driver’s head, authorities said. He allegedly demanded money from her. She gave him the cash, and he drove away. He was arrested in May.

Originally, he was charged with first-degree assault, reckless endangerment, loaded handgun on person, and numerous other charges.

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Bally’s to Pursue iGaming in Home State of Rhode Island

Bally’s Corp. wants to open up online casino gambling in America’s smallest, yet most densely populated state. Officials announced on Wednesday that they intend to seek approval from the Rhode Island government to bring fully licensed and regulated online gambling to the state. Bally’s is headquartered in the state’s capital, Providence.

The proposal was announced Wednesday afternoon at a luncheon held by the Greater Providence Chamber of Commerce. Asking for legislative and executive branch approval during this year’s General Assembly session, the company said it would propose legislation to allow the RI Division of Lotteries to authorize online slot games and table games for players in the state.

Pending all approvals, the company hopes to start offering online gambling in Rhode Island by January 1, 2024.

After commissioning a study on the matter, the company said it believes that broader liberalization of gambling regulation in the state would give its two casinos – Bally’s Tiverton Casino & Hotel and Bally’s Twin River Lincoln Casino Resort a better chance to remain competitive in the long run. The games would be served from one or both locations.

Increased Gambling Revenue for the State

The new metric would also help the company deliver more revenue to state coffers.

“We intend to model this after the legislation used to establish online sports betting in Rhode Island, effectively giving the State complete regulatory control and the ability to ensure the integrity of the program, while maximizing revenue for the State,” said Elizabeth Suever, Vice President of Government Relations for Bally’s Corporation. The state would be paid a percentage of all online gambling revenue generated by the site or sites.

The announcement came as a surprise to many as the company announced about three weeks ago that it would cut 15% of its North American interactive workforce. The announcement came in the form of a letter to Bally workers and a filing with the U.S. Securities and Exchange Commission.

More recently, Bally’s announced that CEO Lee Fenton would step down, and Robeson Reeves, President of Interactive would take his place. Both leaders came onto the company as part of Bally’s friendly acquisition of UK-based Gamesys for $2.7 Billion in 2021. That deal was announced in March and consummated in October 2021.

The company completed several other acquisitions in the meantime and now has 15 land-based casinos throughout the US and was recently given the approval to build the first casino ever in Chicago, IL., America’s third-largest city. Bally’s also holds sports betting licenses in 18 states.

Spectrum Gaming Study

Prior to beginning a discussion in the state to promote its idea of online gambling, Bally’s commissioned industry experts Spectrum Gaming Group to conduct a study of the matter.

Some of Bally’s claims based on that study include the following assertions:

Retail casino gaming would be preserved in the state with few or no players switching completely from land-based gambling to online slots and tables. (Bally’s operates the only two casinos in Rhode Island).

The state could potentially reap $210 million in gambling taxes over the first five years.

Gross gaming revenue is projected to be an estimated $93.3 million in the first year, increasing to an estimated $130.6 million annually in year five.

The proposed legislation would leave the state in control of all responsible gambling protocols, security, system integrity, accounting, and operating procedures. The state would also set conditions and terms for online table gaming and slots.

Players would need to confirm their age and identity to gamble online. Geolocation and other services would be employed to guarantee that a person was physically located within the state’s borders any time they placed a bet.

The physical servers that process and record the wagers would be located within a restricted, secure location on the casinos’ premises.

Source: Bally’s Seeks to Expand Gaming in RI — Wants Approval for Online Casino Gaming, GoLocalProv.com, February 15, 2023

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