August 27, 2026 Sam McLain
With the goal of reducing our large budget deficit, Chicago City Council’s 2026 budget legalized video gambling terminals in bars and restaurants. Chicago businesses may now apply to receive a state license to operate video gambling terminals, or VGTs, in their establishment. Several Chicago businesses have already received state permission to operate these VGTs, but Mayor Johnson has pushed to reverse City Council’s decision.
The Bally’s Casino Agreement (And Disagreement)
Bally’s Casino opened their temporary location in 2023, with plans to establish a much larger permanent location in Fall of this year (now delayed to sometime in 2027). Before beginning development, they reached a deal with Chicago under Mayor Lightfoot in 2022 that granted them a monopoly on virtual slot machines within Chicago city limits. In exchange, Bally’s paid $40 million upon signing the agreement and an additional $4 million dollars annually. The casino also agreed to comply with several other hiring practice standards.
Bally’s considers the decision to legalize VGTs in bars and restaurants as a violation of this contract. As a result, Bally’s has threatened to sue the City and revoke any promises of its other commitments, namely the annual $4 million payments. Bally’s also offered to set up VGT lounges at O’Hare and Midway, which they argue would compensate for the $6.8 million that the VGT legalization is projected to generate for the City this year.
The temporary casino generated $16 million in Chicago tax revenue in 2024, well short the $35 million it was anticipated to raise to pay for fireman and police pensions. City CFO Jill Jaworski argued that this shortfall was due to the temporary location lacking the amenities that the permanent location will offer. Many City Council members remain skeptical of these revenue promises.
The Case for VGTs
City Council decided to legalize VGTs in hopes of generating additional tax revenue while giving struggling businesses a source of supplemental income.
Bally’s underperformance has prompted many Aldermen to look toward VGT legalization as a more reliable way to generate revenue. City Council’s Office of Financial Analysis (COFA) projects that in ten years, once licenses have been widely distributed and additional machines have been installed, that VGTs will bring in $67 million annually. This projection does not account for installation costs, loss of revenue from Bally’s, or impacts on Chicago’s workforce. Alderman Anthony Beale further argues that legalizing VGTs will give City Council leverage to ask the State of Illinois to change the gambling tax structure in Chicago’s favor, compounding their future revenue.
Allowing for more decentralized opportunities to gamble would also help Chicago compete for revenue that is currently going to other municipalities. COFA found that Chicago residents are traveling outside of city limits to gamble, and while there, spend additional money on other goods and services like food, drink, and gas. Each dollar spent outside city limits by citizens pursuing opportunities to gamble represents lost revenue for Chicago. Providing local opportunities to gamble brings this money back to the city.
On the issue of boosting businesses, the state of the Chicago restaurant industry is in flux. While full-service restaurant employment in the metro area is currently at it’s highest in the last three years, February of this year was the lowest across the same three-year span. This fact indicates that employment in the industry is increasingly seasonal and short-term. Proponents for the decision to legalize VGTs at restaurants and bars argue that the supplemental revenue could help to stabilize the profits of these businesses and allow them to retain additional employees for longer.
The Case Against VGTs
As discussed above, the city had made a deal with Bally’s Casino to grant them sole rights to operate virtual slot machines, the primary reason for Mayor Johnson’s opposition to the City Council’s decision. The loss of a guaranteed annual $4 million (plus any damages granted to Bally’s following a successful lawsuit) is a major drawback to the decision to legalize VGTs, offsetting most of the immediate $6.8 million revenue projection. Additionally, the city earns less per bet made at a VGT than it does if the same bet was made at Bally’s. This fact is central to Bally’s argument that the legalization of VGTs will harm the City’s profit margins in the long run.
Aside from the dispute surrounding Bally’s Casino, VGTs themselves are controversial. A primary concern is that the installation of VGTs comes with a greatly increased risk of burglaries. In Oak Lawn, Illinois, where video gambling has been legal since 2012, officials say that burglaries of businesses with VGTs are becoming a nightly occurrence. This sort of high-frequency crime strains police department resources, risks creating dangerous armed conflicts, and may financially devastate a business.
Opponents of VGT legalization also emphasize the social harms of the spread of gambling. Gambling addiction is on the rise in Illinois, with Illinoisians losing $6.5 billion in 2025 to casinos, sports betting and VGTs. While this does mean more revenue for the state of Illinois and local municipalities, it raises the ethical question as to how much the city of Chicago should be using an addictive habit as a method of generating revenue. Gambling addictions disproportionately impact poor and minority communities.
A Role of the Dice
Ultimately, the decision to legalize VGTs is one that comes with a high potential for long term gain, but a high risk of negative consequences for the city. As Mayor Johnson and some City Council allies work toward overturning the decision, only time will tell where the chips will fall for the status of virtual gambling in Chicago.