Gambling is nothing new in Chicago. Legal gambling is. City Hall’s handling of it still looks like the rackets of yore. With a suffocating debt and pension load, and another looming budget deficit, Chicago cannot afford incoherence on this important fiscal and social issue. We can do better. And because of our fiscal moment, we must.
Currently at issue are three forms of gambling — two legal, one questionable.
First comes casino gambling embodied in the city’s agreement with Bally’s to build and operate a casino and entertainment complex. The deal should have received detailed oversight vetting from the City Council in 2022. Instead, the fifth floor created a special committee of the mayor’s hand-picked allies, which held only one hearing with less than full information, and then approved Bally’s still-controversial competitive bid. So far, not so good. Bally’s temporary casino at the old Medinah Temple has grossly underperformed tax-revenue projections, and construction on the permanent River West complex has been bedeviled by a stream of complications and delays, culminating in the recent pronouncement that Bally’s was hitting pause on construction of key non-casino elements.
Second is video gaming, which the City Council legalized as part of the 2026 budget. Video gaming terminals, or VGTs, are licensed gambling machines located in bars and other venues, operated by city-licensed vendors after clearing screening and approval by the Illinois Gaming Board. VGTs were authorized last year by the City Council, despite the mayor’s objection. His administration has responded by slow-walking city licensing in defiance of the council’s legal mandate. Eight months after legalization, there is still not a single active VGT machine in Chicago, even though 311 establishments have applied for and 42 have received state licenses.
Third are sweepstakes machines, which function much like VGTs, but use a legal loophole relating to how players pay and receive prizes to avoid classification as VGTs. Chicago has over 7,000 sweepstakes machines, yet not one VGT. Bizarrely, sweepstakes machines, unlike their VGT and casino slot cousins, are neither regulated nor taxed. No controls, no accountability and no tax revenues for either the state or the city.
These three have become fused into a nonsensical status quo rendered farcical by the fact it serves as a proxy for the still simmering battle between the mayor and the City Council during the 2026 budget cycle. This all can be resolved, but only with complete, public-facing information and analysis, that, thus far, has been missing.
Last year, the mayor’s office commissioned a report from Christiansen Capitol Advisors LLC on the potential fiscal impacts of legalizing VGT gambling in Chicago. Interestingly, this report is not public and appears to not even have been shared with the full City Council. Last fall, that left an under-empowered and under-resourced City Council able to make only rough (albeit prudently conservative) estimates for projected tax and license revenue from legalizing VGTs to close the city’s 2026 budget gap. Since then, mayoral defiance of the legal obligations to enforce the council’s budget has left the city financially short of that modest projection.
The council has its own independent contribution to make respecting the unregulated sweepstakes machines. Some aldermen sought to ban them, reasoning that businesses using them should switch to the legalized, and therefore regulated and taxed, VGTs. The council rejected this proposal 33-15. It was an oddly composed majority that might consider where the sweepstakes machines proliferate in the city. The bottom line for now is that the city is allowing the unaccountable operation of thousands of untaxed machines while simultaneously counting on revenue from their VGT and casino competitors.
Bally’s, meanwhile, has vehemently argued that allowing VGTs will cannibalize revenue from its 4,000 permanent facility slot machines. They are using that claim to justify suspending a $4 million annual payment due the city and pausing hotel and amenity construction, both contractually required. One may reasonably surmise that the city’s corporation counsel is weighing whether Bally’s contract interpretations need to be decided by a judge. Bally’s recent pronouncement does deliver on prior threats, but the timing was suspect, looking more like a naked bluff at the poker table. Just days later, Bally’s issued a “going concern” warning, raising serious questions about the company’s ability to pay its future debts. Bally’s certainly knew that warning was imminent when it played its payment-and-construction-halt gambit. And even if it has the funding to complete the Chicago casino complex, the warning still raises a specter of further delays, or, in the worst case, bankruptcy that could choke off the projected casino tax revenue pledged to bolster the city’s gravely underfunded police and fire pension funds.
Now what?
With eight months of the fiscal year behind us, the concern should no longer be the marginal consequences on the 2026 budget. What matters more is what this mess means for the rapidly approaching 2027 budget cycle. The mayor and the council need a shared, coherent, comprehensive approach to gambling and reliable revenue projections before the mayor’s proposed budget is introduced in October.
On the casino front, the City Council should promptly hold hearings to receive testimony from Bally’s, preceded by a demand for immediate, complete disclosure of information related to Bally’s ability to build and operate the permanent Chicago casino complex. In the event that Bally’s refuses to respond with full candor and information, the City Council may need to consider options up to and including suspending the Bally’s license. If Bally’s cannot deliver on its contractual commitment, the City Council needs to immediately begin contingency planning.
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On video gambling, the question of whether VGTs provide meaningful revenue, generally and in relation to casino slots, needs responsible, fact-based public resolution. The Christiansen report should be made public immediately, and its analysis publicly vetted. If that analysis is incomplete, then additional published analysis should be secured and likewise vetted. Any analysis should also include the commercial and revenue relationship of sweepstakes to VGTs. The council will then be positioned to make a holistic, duly informed decision on whether and what scale to implement VGTs and whether to ban, or regulate and tax, sweepstakes machines.
These issues are not going away. VGT and sweepstakes devices both sit in limbo. Gambling tax revenue projections for 2027 remain cloudy at best. The future of Bally’s and the Chicago casino is uncertain. At this point, no outcome will have any legitimacy without full transparency and accountability. It’s time to call the bluffs and show all hands.
Joe Ferguson is president of the Civic Federation.
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