All bets are off on Bally’s plan to sell $250 million worth of shares in their permanent Chicago casino to investors from minority backgrounds.
Bally’s began refunding would-be investors last week because the U.S. Securities and Exchange Commission hasn’t approved the initial public offering rolled out by the Rhode Island-based corporation in December to help bankroll their $1.7 billion River West entertainment complex.
Bally’s says it’ll take another spin for federal approval of the investment program, which is limited to women and people of color under terms of a host community agreement the company signed with former Mayor Lori Lightfoot’s administration to land the coveted casino license.
In a message sent Friday, the company thanked prospective investors “for your interest and patience” in the public offering that had been expected to close Feb. 7.
“Unfortunately, as of the time of this message, we have not yet received clearance from the U.S. Securities and Exchange Commission to price and close our initial public offering,” Bally’s leaders wrote, offering investors their deposits back “while we continue to work to obtain SEC clearance.”
Bally’s chairman Soo Kim told Crain’s Chicago Business “[w]e’re not canceling the IPO,” adding that “thousands of investors” had signed on before the program fell into limbo.
An SEC spokesperson said the agency doesn’t comment on individual company filings. Mayor Brandon Johnson’s office didn’t respond to a request for comment.
Bally’s offered investment stakes of $250 to $25,000 to investors who are women, Black, Hispanic 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 their city agreement. The deal requires 25% of the casino to be controlled by investors from minority backgrounds.
Those terms have prompted two pending lawsuits against Bally’s and the city from spurned investors who argue the company is discriminating against them as white men.
Lawyers for plaintiffs in one of the suits — backed by the conservative American Alliance for Equal Rights — said “we will not stop until DEI, affirmative action, and other forms of racial discrimination are eliminated everywhere.”
President Donald Trump, who has slashed diversity, equity and inclusion efforts since retaking the White House, installed Mark Uyeda as acting SEC chairman shortly after his inauguration. Trump’s permanent SEC pick, Paul Atkins, hasn’t yet been put up for confirmation.
A federal judge in the second lawsuit against Bally’s rejected a request for an injunction halting the IPO.
Bally’s locked up $940 million in private financing last year to close an $800 million funding gap for construction of the permanent casino at 777 W. Chicago Ave.
The company so far has fallen short of city revenue projections at their temporary casino at the Medinah Temple in River North, which has generated about $20 million for Chicago police and fire pensions since opening in September 2023.
The permanent casino has to open by September 2026 under state gambling law.