Bally's "resetting the pace of construction" for Chicago casino amid City Hall dispute

Bally's said it's "resetting the pace of construction" on its permanent Chicago casino amid a dispute with City Hall over video gambling.

In a statement Bally's said it gave notice to the Chicago Community Builders Collective about this pace change, noting it could impact up to 1,500 union workers on the project.

Bally's has threatened to sue the city over the potential expansion of video gambling terminals in the city, which the company said is a breach of its contract.

The legalization and expansion of video gambling terminals in Chicago is part of the $16.6 billion budget written by City Council opponents of Mayor Brandon Johnson, which passed the city council and which the mayor allowed to go into effect without his signature last year. The revenue from video gambling – along with an increase in the city's plastic bag tax, overhauling the tax of off-premise liquor sales and finding new advertising opportunities – were the councilmen's alternative to Johnson's proposed corporate head tax.

"The potential for an uncontrolled proliferation of video gambling terminals (VGTs) is in breach of the City's commitment not to expand gaming in the Host Community Agreement (HCA) and creates uncertainty that could be harmful for Bally's Chicago prospects," Bally's said in its statement Sunday.

The company said the opening for the casino remains set for early next year, writing it "intends to fully honor its commitments under the Host Community Agreement."

"We will continue to assess our options, which we hope will include more productive discussions with the Mayor's Office and City Council," the statement concluded.

CBS News Chicago has reached out to the mayor's office and the Chicago Community Builder's Collective and are waiting to hear back.