Bally’s Pauses Construction on Chicago Hotel, Other Amenities Over Video Gambling Dispute With City

Bally’s Chicago is pumping the brakes on construction at its $1.7 billion permanent casino complex in River West, pausing work on nearly every non-gaming amenity as its standoff with City Hall over video gambling terminals escalates. The company notified the Chicago Community Builders Collective, the general contractor overseeing the project, on Saturday that it is “resetting the pace of construction” on the hotel tower, events center, and several planned restaurants.

The move puts roughly 1,500 union construction workers on hiatus as much of the site grinds to a halt. Bally’s says the casino floor itself remains on track for an early 2027 opening, but the surrounding entertainment complex, including a planned hotel with 500 guestrooms and a rooftop bar, is now in limbo until the video gambling terminal dispute is resolved.

What Sparked the Standoff

At the center of the fight is Chicago’s 2026 city budget, a $16.6 billion package passed by the City Council over Mayor Brandon Johnson’s objection, which lifted the city’s long-standing ban on video gambling terminals (VGTs) in bars and restaurants. Bally’s argues that decision breaches its 2022 host community agreement with the city, which included a commitment not to expand other forms of gaming while its casino monopoly was in place.

“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,” the company said in its statement announcing the construction reset.

The dispute isn’t new. At a heated City Council committee hearing in June, a Bally’s senior vice president warned that legalized VGTs could jeopardize as much as a third of the 3,000 permanent jobs the casino is expected to bring to the city. The city’s own finance office has countered that Chicago stands to earn roughly 4.5 times more per dollar from casino slot machines than from terminals scattered across neighborhood bars, arguing the tradeoff still favors keeping the casino contract intact.

Legal Threats and a Withheld Payment

Bally’s has retained outside counsel to explore litigation against the city and has reportedly discussed withholding a $4 million annual host community payment due in September until the VGT issue is resolved. Under the original agreement, the city collected $40 million upfront plus $4 million per year in impact fees in exchange for granting Bally’s exclusive rights to slot machines within city limits — an exclusivity the company says the new budget language now undermines.

Despite the friction, Bally’s maintains it intends to “fully honor its commitments” under the host agreement and says it hopes for “more productive discussions with the Mayor’s Office and City Council” in the weeks ahead. Sources familiar with the matter say construction on the full complex could ramp back up quickly if the city reverses course on the video gambling rollout.

What It Means for Chicago’s Casino Market

For now, the casino itself isn’t in jeopardy — Bally’s has been clear that gaming operations remain on schedule for an early 2027 debut at the former Tribune Freedom Center site. But the pause is a reminder of how much leverage a single anchor tenant can hold over a major municipal gaming deal, and it sets up a tense few months of negotiation before the city’s slot machine exclusivity arrangement with Bally’s gets fully tested. Bettors and Chicago-area gaming fans keeping an eye on new market openings, and the sportsbook casino promos that typically follow them, will want to watch how this dispute plays out before the casino’s grand opening draws closer.