Bally’s Corporation has hit the jackpot with new funding for its permanent casino in Chicago, thanks to a strategic lease arrangement with Gaming and Leisure Properties (GLPI). This marks a key turning point for Bally’s, ushering in progress for a once financially uncertain project in the Windy City.
In a high-stakes move, an affiliate of Gaming and Leisure Properties agreed to acquire the real estate underpinning the ambitious project and subsequently revise the existing land lease via a fresh master lease agreement (Chicago MLA) with Bally’s Chicago stepping up as the tenant.
The initial starting rent is pegged at $20 million annually, subject to escalation clauses that make this a long-term bet worth watching. Furthermore, the Chicago MLA has the potential to bankroll an additional $940 million for the project’s hard costs through monthly draws—talk about having an ace up your sleeve.
With an initial term set for 15 years and multiple options for renewal, this lease agreement is no flash in the pan but a sustainable play by both parties.
The Deal Includes More than Just Chicago
As part of this all-encompassing deal, GLPI will also have the option to purchase and lease back additional real estate assets tied to Bally’s properties in Kansas City and Shreveport for a cool $395 million. Moreover, Bally’s plans to tweak its Contribution Agreement with GLPI and sell and lease back its Twin River Lincoln for a princely sum of $735 million.
Under the terms dictated by the Chicago MLA, Bally’s Chicago is set to receive a staggering $2.07 billion in financing from GLPI. This not only fortifies the strategic alliance between the two corporations but also showcases GLPI’s reputation for successful casino resort development and construction. Indeed, GLPI is the dealer Bally’s wants at its table, looking to leverage its extensive track record.
The New Property Will Shuffle the Chicago Skyline
Soo Kim, the chairman of Bally’s, can barely conceal his excitement about the deal, emphasizing that it meets Bally’s Chicago’s financing needs.
We are thrilled to continue our strong partnership with GLPI and to utilize its wealth of experience—three decades of developing and constructing successful gaming facilities. It’s a partnership that keeps delivering strong returns for both sides.
Soo Kim, Chairman, Bally’s Corporation
Peter Carlino, GLPI’s Chief Executive Officer and Chairman, didn’t mince words either, lauding the deal as a new milestone in their collaboration with Bally’s. He highlighted that Bally’s Chicago project will be an “iconic addition” to the city’s skyline and expressed gratitude for Bally’s consistent trust in GLPI.
Strategically, this is an opportunity to grow our asset portfolio within the gaming sector we know so intimately, creating value for our shareholders. We have immense confidence in Bally’s team and will be working closely to ensure this project is completed on time and within budget.
Peter Carlino, CEO & Chairman, GLPI
For some context, Bally’s recently rolled out new renderings of its permanent Chicago casino hotel project. Slated for 777 W. Chicago Avenue, the property will boast a sprawling 500-room hotel, a 3,000-seat theater, a 2-acre public park, and a myriad of food and beverage outlets.
The casino itself reads like a gambler’s dream: 3,300 slots, 173 table games, and exclusive VIP gaming areas. It’s a setup that promises to be nothing short of a full house, blending glamour with opulence to offer an unforgettable experience for patrons and stakeholders alike.
