Bally’s Updates Chicago IPO Prospectus, Warns of Legal Costs

Posted on: April 23, 2025, 06:34h. 

Last updated on: April 24, 2025, 09:42h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

• Bally’s says Chicago IPO legal challenges could result in “substantial costs”
• No mention of allowing white men to participate

Bally’s (NYSE: BALY.T) updated the prospectus for its controversial Chicago casino initial public offering (IPO), telling prospective investors it could face significant legal costs stemming from challenges to the share sale.

As part of the host city agreement (HCA), the regional casino operator wants to sell a 25% interest in its permanent gaming venue in Chicago to people of color and women, but white men aren’t eligible to participate in the offering. That exclusionary tactic has invited legal challenges, which the company warned could consume time and financial resources.

We expect to incur substantial costs defending these lawsuits, and if any person were to bring such a lawsuit against us in the future, we could incur additional substantial costs defending against any additional lawsuits. In addition, the time and attention of our management could be diverted from our business and operations in defense of these lawsuits,” according to a Form S-1 filing with the Securities and Exchange Commission (SEC).

The suits being referenced were filed by the Wisconsin Institute for Law & Liberty (WILL) against the City of Chicago, the Illinois Gaming Board (IGB), and Bally’s Chicago Casino and a complaint filed by Mark Glennon against the city, IGB members, and Bally’s entities.

Not Clear if Bally’s Has Learned its Lesson

It’s been almost two years since Bally’s filed the original S-1 for the Chicago IPO, and in March, the offering was delayed because the SEC didn’t declare it effective.

The commission didn’t elaborate on why that was the case and at that time, Bally’s Chairman Soo Kim said the company would update the prospectus and forge ahead, but acknowledged the outcome could be the same.

“We could be required to seek investors or transferees who do not currently meet the Criteria, or, if this offering has not yet closed, we may be ordered to terminate this offering altogether. Furthermore, the Host Community Agreement could be modified or terminated, which could adversely affect our ability to operate our casinos and could materially adversely affect our business, financial condition and results of operations,” according to the filing.

Bally’s also cautioned that if the HCA is altered or terminated, the gaming company could have its Chicago license revoked.

Bally’s Temporary Chicago Casino Struggling

Adding to the long-running controversy that is the Bally’s/Chicago union, the operator’s temporary casino there is struggling financially. The S-1 indicates the venue posted 2024 earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) of $11.25 million, but that figure doesn’t include $5.2 million in rent and property taxes and $6.9 million in interest obligations.

Those figures, coupled with Bally’s Chicago construction costs and its planned acquisition of Australia’s Star Entertainment, concern some in the Windy City who believed the permanent casino hotel would be a savior for the city’s ailing finances, including massive public pension obligations.