A conservative activist group is suing Bally’s, the city and state gambling regulators over a minority investment program in the Chicago casino that allows only women and people of color to get a piece of the action.
The American Alliance for Equal Rights filed the federal lawsuit Wednesday along with two white Texas men who are “excluded from the table solely based on immutable characteristics,” the suit states.
The 2019 state law authorizing a casino for Chicago required the licensee — later named as Bally’s — to prove it “used its best efforts” to ensure a quarter of casino ownership is held by people from diverse backgrounds.
Bally’s went beyond that commitment in its host community agreement with then-Mayor Lori Lightfoot, which requires 25% of project equity to “be owned by minority individuals and minority-owned and controlled businesses.”
The company announced a $250 million initial public offering last month, limited to investors who are women, Black, or from other groups “found by the City of Chicago to be socially disadvantaged by having suffered racial or ethnic prejudice or cultural bias within American society,” according to an investor presentation.
Attorneys for the Alliance — which is tied to the organization that landed the 2023 U.S. Supreme Court decision halting affirmative action in higher education — argue Bally’s and government officials “have stacked the deck against” their white clients.
The Texas men, Richard Fisher and Phillip Aronoff, “are interested in and able, ready, and willing to invest in Bally’s Chicago, Inc., but they cannot because of their race,” the suit says.
“This race-based stock offering is illegal, and this court should declare it as such.”
The suit was filed in U.S. District Court in Chicago two days before a deadline for prospective investors to apply with Bally’s for a stake. The company is named as a defendant along with the city of Chicago and members of the Illinois Gaming Board.
In an email, a Bally’s spokesperson said the company “honors its commitments. The Bally’s Chicago IPO complies with our obligations under the Host Community Agreement with the City of Chicago.”
A Gaming Board spokeswoman declined to comment. City officials didn’t immediately respond to requests for comment.
Proceeds from Bally’s minority IPO were set to help fund the construction of their permanent $1.7 billion casino and resort slated to open in September 2026 at 777 W. Chicago Ave.
In a preliminary prospectus on the offering, Bally’s cautioned that the program “may result in lawsuits against us and the City of Chicago by persons that do not meet” the minority requirement.
“If any person were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the time and attention of our management would be diverted from our business and operations,” Bally’s leaders said.
And if courts rule the program unconstitutional, Bally’s warned it could invalidate the host community agreement with the city, “which could adversely affect our ability to operate our casinos and could materially adversely affect our business, financial condition and results of operations.”
The action against Bally’s comes as President Donald Trump slashes away diversity, equity and inclusion requirements across the federal government.
Dan Lennington, deputy counsel for the Wisconsin Institute for Law & Liberty that’s representing the Alliance, said in a statement that “we will not stop until DEI, affirmative action, and other forms of racial discrimination are eliminated everywhere.”
“With the Trump Administration’s new direction on racial equality at the federal level, the focus will now shift to states, local governments, and private companies that persist in unlawful discrimination,” Lennington said.
Trump’s impact could also be felt on the Chicago casino if he follows through on promises to raise tariffs on imports from Canada and Mexico, jacking up the costs of construction materials, Bally’s warned in its prospectus.
“To the extent we determine our costs to develop our permanent resort and casino are too high, we may suspend, reduce the scope of or permanently abandon the implementation of our plans with respect to our permanent resort and casino, which could have material and adverse effects on our plans and strategic initiatives,” Bally’s officials said.
Shares in the Chicago casino are “highly risky and speculative” and “should be considered only by persons who can afford the loss of their entire investment,” according to the company.
The IPO is expected to wrap up in February. More information is available at ballyschicagoinvest.com.