During a session with the Nevada Gaming Control Board (NGCB) on Wednesday, executives from Bally’s (NYSE: BALY) addressed regulators, outlining efforts to address a financing gap of $800 million for its forthcoming permanent Chicago casino.
Out of the estimated $1.1 billion budget allocated for the project, the regional casino operator currently has $300 million secured. Marcus Glover, CFO of Bally’s, informed the NGCB that the company is engaged in discussions with a potential financing partner, though the partner was not disclosed. Glover expressed optimism that a resolution to the funding challenge could be achieved in the coming months.
Furthermore, Glover highlighted that Bally’s has a $500 million credit facility at its disposal. A portion of this facility, amounting to $250 million, has already been utilized for the acquisition of land at the Freedom Center, slated to house the permanent casino.
Critics of Chicago Casino Plan Voice Concerns
Since being granted the exclusive Chicago casino permit by former Mayor Lori Lightfoot (D-Chicago) in May 2022, Bally’s has faced scrutiny from various quarters. Critics have raised questions about the integrity of the bidding process and the suitability of Chicago for a Las Vegas-style integrated resort.
Bally’s Chicago Watch has pointed out discrepancies in the company’s initial pledge of $1.7 billion towards the Chicago project, which has since been revised down to $1.1 billion. These criticisms have been amplified by reports surfacing in December of potential investigations, including federal inquiries, into the permit allocation process.
Bally’s Pursues Alternative Financing Avenues
While Glover refrained from divulging specific alternative financing strategies to bridge the $800 million gap for the Chicago casino, Bally’s possesses viable options should discussions with potential lenders falter.
The company holds significant real estate assets where its other casinos are located, presenting the possibility of asset sales to generate capital. Additionally, the option of selling operational rights to the Tropicana Las Vegas remains on the table, given uncertainties surrounding the fate of the resort amidst discussions regarding a Major League Baseball stadium.
Although options such as issuing corporate debt or selling equity could provide avenues for raising funds, Glover did not address these possibilities during the NGCB session. Both options carry drawbacks, including high-interest rates for bonds and potential dilution of current investors’ equity.
In conclusion, Bally’s remains committed to addressing the financing gap for its Chicago casino project, exploring various avenues to secure the necessary capital and propel the venture towards completion.
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