Bally’s has changed the terms on which it’s soliciting investments in its upcoming resort casino in Chicago, possibly in response to a lawsuit challenging the original offer. It had been limiting the offering to investors who self-identified as women and minorities to meet the ownership criteria it agreed to in order to win approval for the project. Bally’s has now opened the floor to all investors but will give preference to residents of Chicago and other parts of Illinois.
To complete the $1.7 billion property, Bally’s Chicago committed to having at least 25% of the project’s equity owned by minority groups. Failure to comply with this specific requirement would result in a breach of contract with the city of Chicago. However, the lawsuit and anti-DEI stance of the current federal administration may make it more difficult for it to do so.
Bally’s still attempting to win over Chicago
This is one of Bally’s toughest hurdles to overcome in getting the project finished, especially the way it had promised. The gambling company has faced opposition from American Alliance for Equal Rights‘ (AAER) Richard Fisher and Philip Aronoff, who filed a lawsuit in February.
Fisher and Aronoff, who are white, are claiming that the stipulations to acquire equity are illegal. Both are seeking to invest in the project.
However, there is a clause in the agreement between Bally’s and the city of Chicago that appears to favor Bally’s. It reads:
“Developer commits that 25% of the Project equity will be owned by Minority individuals and Minority-Owned and Controlled Businesses no later than twelve months following commencement of the Term or such later date as may be determined by the City, and will continue for no less than five years thereafter.“
As long as Bally’s appears to make good-faith attempts at reaching the 25% requirement, the city could extend the timeline. Crain’s Chicago Business believes that is what Bally’s is aiming to do. It said the company is “making a tweak it’s wagering will win over both progressive Chicago officials and a Trump administration hell-bent on crushing diversity requirements,” according to CDC Gaming.
The first initial public offering (IPO), which closed on Jan. 31, drew only $13.2 million shares, well below the desired $250 million. A date for a second IPO has not been announced as of yet.
