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As Bally’s navigates a buyout offer from its largest shareholder, credit downgrades from ratings agencies and an $800 million funding gap to build its planned $1.7 billion Chicago casino, business at the temporary facility continues to ramp up.
Revenue at the Medinah Temple casino grew 12.7% in March to more than $11.1 million in adjusted gross receipts, according to data released Thursday by the Illinois Gaming Board. Bally’s Chicago ranked fourth in revenue among the state’s 15 casinos.
Admissions to Bally’s Chicago increased 11.6% to nearly 118,000 visitors, ranking second behind Rivers Casino Des Plaines, the state’s busiest and top-billing casino.
Rivers welcomed more than 271,000 visitors and generated nearly $47.8 million in adjusted gross receipts in March, according to Gaming Board data.
For the first quarter, Bally’s Chicago generated nearly $30.3 million in adjusted gross receipts and more than $3 million in local tax revenue, according to Gaming Board data.
That is still far off the pace needed to meet Chicago’s revenue target for its first casino. The city has projected Bally’s to generate $243 million in adjusted gross receipts and $35 million in local gaming taxes this year.
“We continue to build momentum month-over-month and we expect it to continue,” said Soo Kim, chairman of Bally’s and founding partner of its largest shareholder, New York hedge fund Standard General.
As Bally’s Chicago gains traction at its temporary River North facility, which opened in September, larger questions swirl around the company and ambitious plans to build its flagship permanent casino in the city.
In February, Bally’s told the Nevada Gaming Control Board the company needed to bridge an $800 million funding gap to cover $1.1 billion in remaining costs to build the casino, hotel and entertainment complex at the Chicago Tribune’s 30-acre River West publishing site.
“We are proud to offer an outstanding experience to our guests in the Medinah Temple and look forward to this summer when construction will begin on our world-class entertainment complex along the Chicago River,” Mark Wong, vice president and general manager of Bally’s Chicago, said in a news release Thursday.
Bally’s is expected to open the permanent casino in 2026.
Both Fitch Ratings and Moody’s Investors Service recently downgraded Bally’s credit rating over concerns that the permanent Chicago casino will leave the company highly leveraged and less stable financially.
Last month, Kim’s Standard General submitted an offer to buy out the rest of the stockholders at $15 per share, valuing the company at about $648 million.
That bid is less than 40% of what Standard General was willing to pay two years ago in an unsuccessful attempt to buy the company. Standard General owns 23% of Bally’s outstanding shares.
The Bally’s board formed a special committee last month and retained Macquarie Capital as its financial adviser to evaluate the offer and explore strategic alternatives to the Standard General proposal.
Kim declined to comment on the buyout offer Thursday.
Earlier this month, minority investor K&F Growth Capital, which owns less than 1% of Bally’s stock, weighed in with a letter urging the board to reject Standard General’s “woefully undervalued proposal.” It also suggested that Bally’s “offload or de-risk the Chicago project” by bringing in a partner to develop and operate the permanent casino.
“We still stand by the plan outlined in our letter,” Dan Fetters, co-managing partner of California-based K&F, said in an email Thursday.
Bally’s stock closed at $13.60 per share Thursday, representing a market cap of $545 million.
rchannick@chicagotribune.com
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Robert Channick , 2024-04-12 00:30:44
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