Bally’s, Chicago Settle IPO Suit Brought by Excluded White Men

• City, gaming company settle litigation stemming from proposed IPO that barred white men
• Suit was brought by a conservative legal group representing two plaintiffs

Bally’s and the city of Chicago settled litigation stemming from a proposed initial public offering (IPO) that under its original terms, would’ve barred white male investors from participating.

The suit was brought in January by the Wisconsin Institute for Law & Liberty on behalf of the American Alliance for Equal Rights (AAER) and Texans Phillip Aronoff and Richard Fisher. The two white men wanted to participate in Bally’s Chicago IPO, but couldn’t due to what they claimed are “immutable characteristics.” A settlement was reached last Friday in the US District Court for the Northern District of Illinois. Financial terms weren’t disclosed.

Plaintiffs have settled with Bally’s Chicago Inc. and Bally’s Chicago Operating Company, LLC. Pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), it is hereby stipulated and agreed between Plaintiffs American Alliance for Equal Rights, Richard Fisher, and Phillip Aronoff, and Defendants City of Chicago, Bally’s Chicago, Inc., Bally’s Chicago Operating Company, LLC, Sean Brannon, Stephan Ferrara, Dionne Hayden, and Charles Schmadeke, that all of Plaintiffs’ claims in this matter are hereby dismissed with prejudice, with each party to bear its own costs and attorneys’ fees,” according to a legal filing.

News of that settlement arrived five weeks after the Liberty Justice Center, which represented Mark Glennon in his suit against Bally’s affiliates, the city of Chicago, and the Illinois Gaming Board (IGB), said it scored a “significant victory” by forcing the gaming company to update its IPO prospectus, including the elimination of minority/women-only clause.

Update on Bally’s Chicago IPO Plans

As part of the host city agreement (HCA), Bally’s wanted to sell a 25% stake in the first gaming venue in the Chicago city limits, but the offering was originally confined to minorities and women. It gained some traction among those audiences, but also drew the ire of some conservative legal groups and white men that said they wanted to invest.

In March, Bally’s Chicago IPO plan was delayed because the Securities and Exchange Commission (SEC) didn’t declare it effective, prompting speculation the proposal could become a casualty of President Trump’s anti-diversity, equity, and inclusion (DEI) push.

Bally’s has softened its stance, noting it wants the share sale to be open to a broad audience of investors though there’s “a preference for residents of Chicago and other parts of Illinois.” That could help the operator reach the 25% minority ownership clause it has with the city without deploying demographic exclusion tactics that could invite legal challenges.

Bally’s Chicago IPO Details

Previously, the Rhode Island-based gaming company hoped to raise $250 million to go toward its $1.7 billion integrated resort in the third-largest US city. When the operator floated that plan in May 2023, DEI was popular in Corporate America, but some companies across all industries have dialed back their DEI discussions in recent months.

Bally’s has floated the idea of a Bronx IPO should it win a New York City casino license and another contender in that competition has mentioned similar plans, but those proposals don’t feature explicit demographic restrictions.

Should Bally’s proceed with its Chicago IPO under the original financial terms, there would be a $25,000 minimum investment that participants could meet by purchasing 500 shares at $250 apiece, 1,000 at $2,500 each, 1,000 at $5,000 per unit, and 7,500 shares for $25K each.