Bally's Chicago files amended IPO eliminating gender and minority investor requirement
Casino executives say they are confident the IPO, which was challenged by two federal lawsuits over alleged discrimination against white men, will pass muster with regulators and still meet a 25% minority investment requirement for Bally's Chicago with the city.
"Thousands of qualified minorities have already applied," said Chris Jewett, Bally's senior vice president of corporate development. "We're going to meet the goal."
Bally's Chicago launched the $250 million IPO in January exclusively for women and minorities to buy a 25% equity stake in the casino, looking to fulfill a commitment to the city and raise funds for the construction of its planned $1.7 billion entertainment complex in River West.
Chicago-based Loop Capital Markets serves as the lead placement agent for the IPO, which initially was limited to Blacks, Asian Americans, Hispanics and other "socially disadvantaged" people as defined by city guidelines.
"As the lead placement agent for the Bally's Chicago IPO, we've seen interest from thousands of people who appreciate having access to this unique investment opportunity in a one-of-a-kind casino and resort project in the city of Chicago," Jim Reynolds, CEO of Loop Capital Markets, said in a news release announcing the amended registration.
While the IPO generated applications from thousands of minority investors who opened and funded accounts to buy shares in the city's first casino, the SEC did not declare the registration effective before the prospectus financials lapsed, essentially shutting it down in February.
At the time, Bally's Chairman Soo Kim told the Tribune the company didn't know why the IPO stalled, while an SEC spokesperson said the federal agency does not comment on individual company filings.
But the only substantial change in the amended registration filing was the removal of the minority investor qualifications.
Bally's submitted updated financials and an amended registration statement on April 22, offering 10,000 Class A shares but striking all references to the minority investor requirements. The amended IPO added new language for "preferential allocations" of Class A interests to Chicago and Illinois residents.
"We take pride in having attracted a substantial amount of interest in ownership from women and minority groups," Kim said in the news release. "To make this investment available to even more Chicagoans who make this city so great we are extending our investment opportunities, with a preference for residents of Chicago and other parts of Illinois."
In May 2022, Rhode Island-based Bally's was selected to build the Chicago casino, besting finalists Rivers Casino and Hard Rock with a proposal that includes an exhibition hall, a 500-room hotel, a 3,000-seat theater, 10 restaurants and 4,000 gaming positions.
As part of the winning bid, the city required an equity component of at least 25% minority investment in the proposed casino.
The IPO created 10,000 Class A shares featuring four classes of stock ranging from $250 to $25,000, supplemented by loans from Bally's Chicago to enable "underrepresented communities" to participate. Qualified minorities applied online through Jan. 31, with the IPO initially expected to close Feb. 7.
A private placement sold 1,185 Class A shares to qualified minority investors, as well as 2,141 Class A shares to the Bally's Chicago Holding Company, according to the amended filing.
With thousands of additional minority investors applying for shares and putting down deposits during the initial offering in January, Jewett said the amended IPO will still meet the minority equity goals, even if it opens up to non-minority investors.
Jewett said Bally's is hoping to close the IPO "as soon as possible," pending SEC approval.
A city spokesperson did not immediately respond to a request for comment Monday.
It is unclear how the amended IPO will affect separate lawsuits filed in late January against the city and Bally's by the American Alliance for Equal Rights and Mark Glennon, a Wilmette resident. Both lawsuits, which are ongoing in Chicago federal court, alleged the IPO discriminated against white men by limiting the investment opportunity to women and minorities.
While the minority requirement has been eliminated, Bally's Chicago said in its amended IPO registration it expects to incur "substantial costs" defending the lawsuits, and may face additional litigation over the matter.
Meanwhile Bally's, which has been operating out of a temporary casino at Medinah Temple since September 2023, is making progress in building its permanent facility at the 30-acre site of the former Chicago Tribune printing plant.
After some demolition delays, Bally's began driving foundational caissons into the ground in February, with the permanent casino still targeted for a September 2026 opening.
"The caissons are almost done," Jewett said. "They're going to start pouring concrete in a couple weeks."
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