To Top

Bally’s Chicago Seeks Property Tax Break From City Council

Bally’s Chicago is applying for a Class 7 tax incentive, which would temporarily reduce its property taxes by 60%, gradually increasing back to the normal rate over 12 years.

a stack of coins and a clock next to a sign reading
Photo by Jack_the_sparow/Shutterstock
Tebearau Egbe Avatar
4 mins read
Share Share
Copy link Share on X Share on Facebook Share on Reddit Share via Email

Bally’s Chicago is asking the city council for a temporary reduction on the property tax assessment for its $1.7 billion permanent casino hotel project. 

If councilors and the County Board give the go-ahead to the incentive, Bally’s could save around $150 million over the next five years.

The push for a tax break seems timely, as the Bally’s Chicago is currently facing challenges with guest turnover at its temporary location at Medinah Temple, which is reportedly a result of its limited amenities, including a lack of parking space.

Last year, the facility brought in only $16 million for the city, a far cry from the $35 million that Mayor Brandon Johnson had predicted in his budget.

City officials say ‘no deal’

Bally’s is asking for a “Class 7” tax incentive, which would temporarily lower the caisno’s tax assessment of 10% market value, which is the rate for Chicago homeowners, instead of the 25% rate that businesses pay. From there, the assessment would gradually increase back up to 25% over the course of 12 years.

Bally’s says this tax break is necessary to ensure its Chicago project brings in the $200 million in taxes it has promised each year through a combination of gaming, income, property, and sales taxes.

According to Johnson and Corporation Counsel Mary Richardson-Lowry, the city’s agreement with Bally’s does not include the tax break the company is suddenly clamoring for, basically telling Bally’s to take it or leave it.

The same kind of tax break tug-of-war is playing out in Atlantic City, New Jersey, where the “PILOT” program (Payments in Lieu of Taxes), which lets casinos pay a fixed amount instead of property taxes, is costing Atlantic County taxpayers millions.

The situation is so messy that the state is currently appealing a court ruling that went against the PILOT program. The county is currently getting $18.3 million from the program but could get an additional $14.1 million if the state loses its appeal.

It’s a warning sign for cities like Chicago to tread carefully and make decisions that will not put the state in a deficit.

Bally’s makes case for $1.7 billion development incentive

While a group including city Mayor Johnson strongly opposes the tax break, Ald. Gilbert Villegas (36th), chair of the City Council’s Committee on Economic and Capital Development, is of the opinion that Bally’s should be granted the tax break as the state has a lot to gain from it in the long run.

According to Crain’s Chicago Business publication Villegas said:

This is a $1.7 billion development. They’ve given $40 million up front. We stand to benefit from casino revenue, which ultimately goes to pay for our underfunded police and fire pensions. It’s in our best interest to get this thing going.

“If there’s an incentive that they’re eligible for, then they should apply for it. The fact that there’s even any type of pushback on this doesn’t make sense.”

Bally’s argues that it meets up with the Class 7 tax break which it is requesting and also within the purview of the host agreement.

The Class 7 incentive program spans 12 years, and offers property tax reductions of about 60% for the first 10 years, 40% in the 11th year, and 20% in the final year.

To qualify for a Class 7 tax incentive, projects must meet five key requirements:

  1. The local municipality must designate the area as “blighted.”.
  2. There must be evidence of declining real estate taxes in the target area over the past six years.
  3. The project must be shown to be viable in terms of both scope and timeline.
  4. It must be demonstrated that the project wouldn’t be financially feasible without the incentive.
  5. The project must be expected to increase property tax revenue and create jobs in the long run.

Some people think that cutting taxes for a big company like Bally’s is a bad idea because it could mean that residents and other businesses have to pick up the slack. But others think it’s a good way to get companies to invest in the city and create jobs.

Bally’s is trying to make its case by pointing out all the good things it’s promising to do for the community, including a $40 million payment to support police and fire pensions, as well as partnerships with minority- and women-owned businesses.

The city is still struggling to fund its public pensions, and its credit rating is taking a hit. So, it’s likely that city officials will be eager to find ways to bring in more revenue, and that could make them more willing to listen to Bally’s requests.

Tebearau Egbe Avatar
Written by

Tebearau Egbe has written about gambling for more than four years. She has a Master's degree in philosophy and possesses a unique ability to dissect complex industry developments, distilling them into insightful narratives for readers.

View all posts by Tebearau Egbe

Tebearau Egbe has written about gambling for more than four years. She has a Master's degree in philosophy and possesses a unique ability to dissect complex industry developments, distilling them into insightful narratives for readers.

Sign up to our newsletter to get PlayUSA’s latest hands-on reviews, expert advice, and exclusive offers delivered straight to your inbox.
You are already subscribed to our newsletter. Want to update your preferences data?
Thank you for signing up! You’re all set to receive the latest reviews, expert advice, and exclusive offers straight to your inbox. Stay tuned!
View Offers