Bally’s Chicago IPO Hits SEC Roadblock

Posted on: March 3, 2025, 03:00h. 

Last updated on: March 3, 2025, 10:04h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Minority-only IPO didn’t close as expected
  • Casino operator plans to try again even as legal challenges linger

Bally’s (NYSE: BALY.T) planned $250 million Chicago initial public offering (IPO), reserved exclusively for minority investors, didn’t close as expected in February after the Securities and Exchange Commission (SEC) failed to declare the offering effective.

Bally's Chicago gross gaming revenue
Bally’s temporary Chicago casino at Medinah Temple. The SEC didn’t approve a plan by the operator to sell shares in its permanent casino in the city. (Image: Axios Chicago)

In May 2023, the regional casino operator confidentially filed a Form S-1 with the SEC for the IPO, which would have contributed to funding for the Chicago casino hotel — the company’s most expensive project to date. The offering relates to the Host Community Agreement reached between the gaming company and the city, and provides for stakes in the integrated resort to be sold to select Chicagoans.

The SEC didn’t respond to the filing, and it’s not apparent why. In an interview with The Chicago Tribune, Standard General founder Soo Kim expressed dismay that the commission didn’t consider the filing, nor it did provide a reason for not doing so. He added that Bally’s will resubmit an application for the IPO, but acknowledged the result could be the same.

Standard General is the hedge fund that recently acquired Bally’s. Investors who had already allocated capital to the gaming company for the Chicago offering will have that cash refunded.

Bally’s Chicago IPO Fraught with Controversy

SEC protocol is not to comment on individual filings. Between that and the commission not providing Bally’s with a reason why the filing wasn’t considered, speculation could ensue.

What is clear is that the stock sale is beset by controversy. Bally’s Chicago, Inc. wants to sell up to 25% interest in the integrated resort to women and qualifying minorities. Those include Black, Indian, Asian, Hispanic, Arab, or another group “found by the City of Chicago to be socially disadvantaged from having suffered racial or ethnic prejudice or cultural bias within American society,” according to the company.

Translation: nearly everyone but white men can participate in the Bally’s Chicago IPO — a stipulation that has invited at least one legal challenge. In late January, the Wisconsin Institute for Law & Liberty (WILL) filed a suit against the City of Chicago, the Illinois Gaming Board (IGB), and Bally’s Chicago Casino alleging that the stock offering is discriminatory.

The SEC didn’t say if the controversy was a factor in stalling the offering, which was slated to close on February 7.

Demand Was Strong for Bally’s Chicago IPO

Even against the backdrop of the aforementioned legal spat, demand for Bally’s Chicago IPO appeared to be strong with The Tribune reporting there was interest from “thousands” of minority investors who initiated and allocated capital to accounts for the equity sale.

The gaming company is looking to sell shares in increments of 500 at $250 apiece, 1,000 at $2,500 each, 1,000 at $5,000 per unit, and 7,500 shares for $25K each.

The offering has garnered some criticism because investors who want to participate and cannot meet the minimum $25K investment can take a loan out for the difference, but the interest rate is 11%, and those shareholders wouldn’t be eligible to receive dividends until their loans are paid in full.