Bally’s faces federal, local scrutiny over how it secured Chicago casino license

The process through which Bally’s secured the coveted Chicago casino license has come under federal and local scrutiny.

One investigation is reportedly led by the U.S. attorney’s office, initiated in response to complaints lodged by unsuccessful bidders in the casino licensing process, Crain’s Chicago reported.

Alderman Brian Hopkins, a consistent critic of former Mayor Lori Lightfoot’s management of the casino proceedings, confirmed the existence of the federal inquiry, the outlet reported.

Simultaneously, a parallel investigation is said to be underway, conducted by Chicago Inspector General Deborah Witzburg. 

Witzburg, adhering to office policy, declined to comment on the matter, and the U.S. attorney’s office did not respond to requests for comment. 

Lightfoot’s spokeswoman, Joanna Klonsky, and her casino bidding process head, then-Deputy Mayor Samir Mayekar, claimed ignorance of any inquiry, attributing talk of an investigation to disgruntled losing bidders spreading false rumors.

Bally’s, the Rhode Island-based gambling company, said it is not aware of any investigation. 

The city’s Law Department has clarified that neither they nor the mayor’s office have been subpoenaed or requested to provide information.

But the inquiries, according to Crain’s, started months ago. 

Bally’s faced controversy earlier when it was allowed to alter the terms of its financial deal with minority investors after inserting a clause that could buy out minority shares at a non-negotiated price post-casino opening. Reports also revealed discrepancies in the fees charged to different bidders and conflicts of interest with city consultants evaluating financial prospects.

Despite these controversies, the casino won City Council approval with a 39-5 vote. 

The project, anticipated to cost $1.7 billion, is set to help alleviate the city’s unfunded public employee pension liabilities. Bally’s opened a temporary casino in September at the former Medinah Temple, with construction on the permanent site expected to commence soon and an opening scheduled for late 2026. 

Chicago officials have kicked around the idea of a casino for decades, with some city leaders viewing such a development as a potential financial savior. The proposition didn’t gain serious traction until 2020.

“This is a big deal. This is something three administrations have been trying to do,” 27th Ward Ald. Walter Burnett, who represents the area the casino will occupy in a nod to Lightfoot, said at the time. “This mayor got it done.”

The gaming company’s path to building Chicago’s first casino hasn’t been smooth, with some aldermen alleging the process lacked transparency and doubting Bally’s ability to pull off the project.

— Ted Glanzer