Chicago’s latest fiscal fight centers on whether to finally legalize video gambling in Chicago, a move that could permanently alter how the city collects casino tax revenue and funds its pension promises. The proposal has split City Hall into two camps: those chasing short-term gains and those warning the city is once again playing financial roulette with its own future.
The Proposal That Set the Table on Fire
Alderman Anthony Beale’s ordinance would lift Chicago’s decade-long ban on video gaming terminals (VGTs), allowing up to six machines in roughly 3,500 licensed venues—bars, restaurants, hotels, and bowling alleys. His argument is blunt: the suburbs are already making millions from video gambling, while Chicago pretends it doesn’t exist.
Beale claims the city is losing twice—once in missed tax revenue and again in customers who drive to Cicero, Berwyn, or Orland Park to spend money that could stay local. Legalizing and taxing those same machines could bring in $60–$100 million annually, according to proponents. And Beale, whose South Side ward will also benefit from the Red Line Extension, calls it economic parity for small businesses boxed out of downtown’s prosperity.
Bally’s Says the City Is Betting Against Itself
On the other side stands Bally’s Corporation, operator of Chicago’s first resort casino and signatory of a $4 million-a-year host-city agreement. The company’s official agreement with Chicago includes guaranteed payments and job creation targets that depend on monopoly-level revenue. Bally’s warns that legalizing VGTs would pull gamblers off its high-tax casino floor and into low-tax neighborhood machines, draining as much as $70–$74 million in city revenue every year.
That warning matters. The temporary casino at Medinah Temple—and the planned River West complex, already profiled in our River West entertainment district feature—has been pitched as the fiscal lifeline for pensions and infrastructure. Undermining it before the permanent site opens would confirm what critics always suspected: Chicago can’t resist cashing out early.
The Economics of Cannibalization
The fight isn’t moral; it’s mathematical. Casino slots are taxed at rates approaching 70 percent when city and state cuts combine. VGTs face a 35 percent state tax, and Chicago currently gets none of it. Even if the city negotiated a five-percent local share, every dollar wagered on a bar-top VGT would deliver barely half what a casino slot provides.
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Supporters counter that VGT players aren’t casino patrons to begin with—that neighborhood gaming is a different market entirely. But spending is fungible. The moment thousands of new machines appear across the city, some share of Bally’s customers will decide a bar stool is closer than a blackjack table.
Fiscal Sensitivity Scenarios
| Scenario | Casino Retention | VGT Rollout Revenue | Estimated Net Impact |
|---|---|---|---|
| Limited rollout (≤10k machines, high local tax) | $190 M | $70 M | +$10 M gain |
| Moderate rollout (~20k machines, standard tax) | $180 M | $60 M | Break-even |
| Full rollout (≈25k + machines, low local share) | $170 M | $50 M | –$10 M loss |
Figures derived from Illinois Gaming Board tax structures and city revenue models.
Chicago’s Habit of Wanting It Both Ways
Chicago wants revenue without risk, growth without guardrails. Bally’s deal was sold as the disciplined fix—a predictable, job-creating engine to stabilize pensions. Beale’s plan offers the opposite: a populist shortcut appealing to every tavern owner watching suburban competitors win. It’s a familiar contradiction, echoing the LaSalle Street housing conversions—big visions colliding with political impatience.
Legislative Snapshot: The City Council Timeline
Beale’s ordinance cleared the Licensing Committee by an 8–6 vote before stalling at full Council. Mayor Brandon Johnson has voiced caution, warning that the proposal could destabilize the casino agreement and the city’s pension funding plan. Behind the scenes, negotiators have floated compromises: higher licensing fees, ward-level opt-ins, or phased rollouts capped by zoning.
The ordinance is expected to reappear in the next budget cycle when deficits and pension bills again dominate headlines. In Chicago politics, “tabled” rarely means dead—it usually means “waiting for leverage.”
Lessons From the Rest of Illinois
Beyond city limits, the story has already played out. Suburbs like Cicero, Des Plaines, and Orland Park have hosted VGTs for years. According to Illinois Gaming Board data, the state operates 49,000 plus machines generating over $1 billion in annual tax revenue—now Illinois’s largest gambling-related income source.
But the curve flattened fast. Initial windfalls settled into routine budget filler, while the costs—addiction, zoning disputes, regulatory enforcement—kept climbing. Municipalities soon discovered that gambling money plugs holes; it rarely builds futures.
The Human Cost of Expansion
Critics point to Illinois’s own history as a flashing red light. The Illinois Department of Human Services reported a 22 percent rise in gambling-related helpline calls between 2019 and 2023, much of it tied to easy access from VGTs.
As detailed in ProPublica’s “The Bad Bet” investigation, early optimism masked a long-term social toll: rising bankruptcies, family strain, and local governments hooked on unstable revenue.
Public-health advocates warn that expanding VGTs into thousands of Chicago bars would multiply those pressures in neighborhoods already juggling poverty and addiction challenges. It’s less about profit and more about values: whether the city chooses stability over speed, discipline over dependency.
Regional Perspective: How Other Cities Played the Hand
St. Louis tightened its casino market and banned widespread VGTs; it sacrificed some bar revenue but preserved downtown visitation. Detroit permitted limited expansion but earmarked gambling taxes directly for neighborhood reinvestment, softening backlash. Chicago stands at a midpoint—wealthier than either but burdened by deeper pension debt. The choice it makes will signal whether it intends to emulate stability or chase the next bright machine.
The Politics Underneath the Math
Beale sees his ordinance as populist—a lifeline for local businesses. Bally’s sees sabotage. The mayor sees a headline waiting to explode. Voters see the same old city reflex: a scramble for revenue framed as reform. Chicago’s political culture runs on contradiction—progressives preaching prudence, conservatives promising equity, and lobbyists ensuring neither fully wins.
The irony is that the casino itself was meant to end debates like this—a central, regulated hub for a vice the city could finally tax with purpose. Now that promise is being diluted one neighborhood liquor license at a time.
The Bottom Line: Who Really Pays
So, will video gambling cost Chicago millions? The math suggests it might. A tightly controlled rollout could yield a modest gain; a free-for-all could erode casino revenue and destabilize long-term obligations. The city’s habit of treating every new revenue source as an ATM has never ended well.
Chicago has reinvented itself before—from vacant offices to after-work hotspots—but this reinvention isn’t about creativity; it’s about control. The question isn’t whether video gambling can make money. It’s whether City Hall can finally stop chasing the quick payout long enough to make the numbers work for once.
Key Takeaways
- Chicago’s City Council remains divided over Ald. Beale’s proposal to legalize video gambling terminals across roughly 3,500 venues.
- Bally’s warns legalization could drain $70–$74 million from casino-linked taxes, threatening its host-city agreement.
- Supporters argue the city could gain $60–$100 million annually and level the playing field for local bars and restaurants.
- The Illinois Gaming Board reports more than 49,000 active VGTs statewide, now producing over $1 billion in tax revenue.
- Public-health data show a 22 percent rise in gambling-related helpline calls since VGT expansion, underscoring social-cost concerns.
- Whether Chicago profits or pays depends on restraint: limited rollout, higher local taxes, and strict enforcement could make or break the gamble.
