Bally’s Removes Requirement for Minorities as Temporary Casino Struggles

Bally’s is done with its minority and women requirements for its under-construction Chicago, Illinois casino.

The gaming company was led to scrap its inclusive arrangement after it received lawsuits that called the standard discriminatory against white men and a general lack of guidance from the Securities and Exchange Commission (SEC).

Bally’s last week said it sent a new investment plan that favored Chicago and Illinois residents to the commission.

Constructing a new plan

Bally’s in 2022 was granted the authority to build the first casino in Chicago by then-Mayor Lauri Lightfoot. It received permission against competition from other preeminent gaming companies after the company projected $200 million in annual funding for the city, plus a $40 million upfront donation and $4 million in annual flat fees.

Lightfoot, who was the first Black woman to serve as Chicago’s mayor, ensured that Bally’s attached a requirement to offer 25 percent equity of the $1.7 billion project to women and minorities. 

Bally’s in January released the official details of the plan, which allowed minorities and women to invest $250-25,000 per share of the casino.

The lawsuit by the white men was supported by Loop Capital, the underwriter of the investment proposal, who said it would not check the sex or race of applicants.

Bally’s Chairman Soo Kim told The Real Deal after the company submitted the new plan to the SEC that the minority investment required was dropped “because it’s not working.” 

“With these hard and fast rules, nobody will get any equity,” he added.

An uphill climb

Bally’s conceded in its initial filing that the minority requirement could result in lawsuits against it and Chicago, leading to “substantial costs… and the time and attention of our management.”

The updated plan upheld the 25 percent of shares that are up for grabs. Purchasers may reside in Illinois, New York, Texas, and Florida, and Chicago and Illinois residents will be given preferential treatment. 

Requirements aside, the casino has encountered a variety of issues in its construction. 

Last December, a nearby accident put the casino site’s demolition on pause as debris spilled into the nearby Chicago River. Workers later discovered an underground water pipe beneath the planned site of the hotel, which forced Bally’s to amend its design plans.

The temporary casino that has served locals since September 2023 is also struggling. It reported $160.7 million in earnings and $294.4 million in losses since its grand opening.

Still, the project has marched on and hit a recent milestone with the fixing of the foundational caissons.