With an aim to secure $800 million in funding for the new, permanent and ambitious version of its Chicago casino, Bally’s chairman Soo Kim is looking to take the company private.
According to a report in the Chicago Sun-Times, the casino company “formed a special committee to evaluate a bid from New York hedge fund Standard General, which already owns about a quarter of the company, to buy out shareholders at $15 per share.”
While that’s more than its Friday valuation of $13.32 on the New York Stock Exchange, it’s significantly less than the $38 per share price Kim offered when he previously tried to take the company.
In a letter to shareholders last week, Kim pledged the deal offers them a premium value for their investment, in cash, and “provides stockholders certainty of value for their shares, especially when viewed against the operational risks inherent in the Company’s business and the market risks inherent in remaining a publicly-listed company.”
Bally’s temporary Chicago casino falling short of initial projections
Bally’s opened a casino location in September 2023 — a temporary casino at Medinah Temple in the River North neighborhood with 800 slot machines and 56 table games, making it the only casino operating in Chicago, in a state where Illinois online casino games are still illegal.
But its initial tax revenue generated for its first two months of operation was just under $1.5 million. That came in well under the $12.8 million projected for tax revenue in the last four months of 2023, and well off the $50 million annual amount Kim had projected when the facility opened.
Since then, the casino has expanded to 24-hour operations.
Permanent casino will require significant more investment
Plans call for a permanent casino to open in two years in the Windy City. Kim optimistically predicted that version of Bally’s could bring in more than $200 million in annual tax revenue when the temporary location first opened, but Bally’s needs to raise significant capital just to see if that dream can become a reality.
“Under a host city agreement with then-Mayor Lori Lightfoot … Bally’s is contractually obligated to spend at least $1.34 billion on its temporary casino and its permanent one, which under state law must open by September 2026.”
Plans for the permanent casino, at the Tribune Freedom Center site in the River West neighborhood — a site Bally’s purchased from Nexstar Media Group in November 2022 — include “an exhibition hall, a 500-room hotel, a 3,000-seat theater, 10 restaurants and 4,000 gaming positions.” Bally’s is still aiming to break ground at the site this summer.
