Bally’s Chicago construction halted due to contracting violation

The Illinois Gaming Board served Bally’s Corp. with a work stoppage order Thursday for its $1.7 billion permanent Chicago casino after the company was found to be using an unapproved contractor at the site with previous ties to organised crime.

Reporters from the Chicago Sun-Times notified the IGB that dumpsters from D&P Construction were seen on the Bally’s site. D&P was previously tied to John and Peter DiFronzo, two men believed to be heavily connected to the Chicago mob. Both have now passed away, although Peter’s widow was for years listed as an owner of the company but is no longer, per the Sun-Times.

As a result, the IGB subsequently halted construction and released the following statement:

“The Illinois Gaming Board (IGB) issued an order to cease construction work on the Bally’s Chicago permanent casino in connection with a pending IGB investigation into the use of undisclosed and unapproved vendors at the construction site….IGB staff learned earlier this week that D&P is providing or provided waste removal services at the permanent casino construction site. However, D&P was not disclosed to the IGB and the IGB did not approve D&P.”

This discovery “raises several serious concerns”, the board said, and the matter is now under investigation.

No margin for error

In response, Bally’s said it was “informed by IGB that the contractors working on the Bally’s Chicago site were utilizing an unapproved vendor and were issued a stop work notice”. The company said this “is the process at work”, and asserted it was “working with the IGB to eliminate the possibility of it happening again”.

Spokeswoman Lauren Westerfield also told the Sun-Times that the company is drawing up a new plan for how subcontractors are vetted. Work can resume once the IGB approves the plan, but not before then.

Should the investigation evolve into a significant work stoppage, it could pose serious challenges for Bally’s. Under state law the casino is required to be up and running by September 2026. Even without the stoppage, that timeline was already tight for a project that is still in early stages.

This investigation is the latest hiccup for the project, which has been multiple years in the making. Other hindrances included a substantial redesign after initial plans were denied due to interference with city water lines as well as a significant funding gap, which was eventually filled through a $940 million deal with Gaming and Leisure Properties. The project was also halted for about three weeks in December and January after debris spilled into the nearby Chicago River.

Bally’s since September 2023 has operated a temporary casino in the city, which has generated $29 million in revenue this year. The casino has contributed $3 million in city tax revenue in that span, which puts it behind the $16.5 million projection from the city’s budget for 2025.

D&P involved in Rosemont scandal

The contracting violation and work stoppage may have looked different if D&P was not involved. But the IGB has history with the company, as D&P was also tied to a previous casino scandal from years past.

In 2001, as developers were attempting to build the Emerald Casino in the village of Rosemont, the IGB said in a complaint that the “owner of D&P, Josephine DiFronzo, is married to Peter DiFronzo and is the sister-in-law of John DiFronzo, individuals who have been identified as known members of organized crime. Emerald’s failure to exercise appropriate supervision resulted in work being performed at the site by D&P.”

A 2005 memo from the Federal Bureau of Investigation said D&P “obtained contracts through illegal payoffs or intimidation”, per the Sun-Times. The Rosemont licence was eventually revoked and given to neighbouring Des Plaines, which is where Rivers Casino now operates. Chicago was not in the running for a licence at that time.

Rivers has long been the best-performing casino in the state, posting more than $2 billion in revenue over the last five years.