Gaming & Leisure Stays Bullish On Bally’s Casino Project Despite Delays

Gaming & Leisure Properties executives remain confident that Bally’s highly anticipated Chicago casino project will generate a return on investment despite a recent pause on some construction work.

GLPI provided $940M in construction funding in 2024 for the planned casino and hotel complex along the Chicago River. But the project ran into delays in August amid a dispute between Bally’s and the city over the legalization of video gambling terminals.

“What they’re doing in Chicago to slow down the development of the hotel for political reasons or otherwise doesn’t change how we view the market or how we ultimately think that property will perform,” GLPI President Brandon Moore said on the company’s third-quarter earnings call Friday.

GLPI reported its earnings just days after entering into uncharted territory with its inaugural joint venture, announcing a partnership with Prologis to develop a 3.8M SF industrial park on a former casino site in suburban Joliet.

Wikimedia Commons/AlphaBeta135 Bally’s Chicago

The Bally’s casino project is expected to include a hotel tower, events center and several planned restaurants.

The company still expects the casino component of the mixed-use development to deliver on schedule, said Carlo Santarelli, senior vice president at GLPI. Additional amenities included in the company’s underwriting will be developed, though perhaps at a later timeline than previously expected, he said.

Even an August filing raising questions over Bally’s liquidity and ability to continue operating hasn’t impacted GLPI’s overall view of Bally’s credit risk, Moore said. The company believes Bally’s has tools at its disposal to get cash flow in Chicago, he said.

“Chicago is so far along,” Moore said. “There are several parties who would be interested in Chicago if Bally’s decided that it could not, would not or cannot proceed with that project. So we feel good about the Bally’s assets we have regardless of the fact that they filed this going concern 10-Q.”

On GLPI’s new industrial joint venture, Moore said the company decided to partner with Prologis on the development of the former Hollywood Casino Joliet site because of the potential to generate excess income compared to a standard sale.

Google Maps Hollywood Casino Joliet

GLPI could have sold the ground outright for a “generous price,” GLPI CEO Peter Carlino said on the call.

“We made the conclusion that over time, this is going to be a whole lot more valuable, particularly tied to a partner who is as strong as they are,” Carlino said.

When asked about additional potential pivots outside of the gaming space, Moore said nothing has changed in the company’s overall approach. If it does pursue additional opportunities unrelated to gaming, they would need to be accretive and with “folks that know what they’re doing,” he said.

Moore said Prologis is at “the tip of the spear” when it comes to developing industrial sites.

“I won’t tell you that there’s a huge supply of potential sites on our balance sheet, but I wouldn’t say that there is none,” Moore said. “We’ll continue to see how that relationship expands as we develop it.”

Source: www.bisnow.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.