Bally’s bid to raise $250 million in an initial public offering (IPO) for its highly anticipated Chicago casino project has hit a significant roadblock. The setback has delayed the company’s inclusive equity commitments and fundraising goals, further complicating an already ambitious $1.7 billion development plan in River West.
Chicago Mandated at Least a 25% Minority Stake
In May 2022, Bally’s won the tender to build Chicago’s first casino, surpassing competitors such as Rivers Casino and Hard Rock. The mega-project includes a 500-room hotel, a 3,000-seat theater, an exhibition hall, 10 restaurants, and 4,000 gaming positions. A crucial component of the city’s agreement was that at least 25% of the casino’s ownership would be reserved for minority investors.
In January, Bally’s launched an investment program to promote diversity and inclusion in its Chicago casino project. The initiative would offer women and minority investors a 25% stake in the project, meeting the obligations imposed by the city to bring economic benefits to underrepresented groups. However, the Securities and Exchange Commission (SEC) did not approve the IPO in time, effectively shutting down the initiative.
Despite receiving overwhelming interest from thousands of minority investors who opened and funded accounts to participate in the IPO, the SEC’s delay caused the financial statements to become outdated, effectively forcing Bally’s hand to cancel the offering. The operator will refund initial deposits and relaunch the offering after amending its financial disclosures.
Bally’s Will Attempt to Relaunch the IPO
This unexpected hurdle has led to rising concerns that Bally’s may be unable to secure the necessary minority investment partners on time to keep the project on track. The casino’s development is crucial to Chicago’s broader economic policy as the new venue promises to generate significant taxes, bolster surrounding businesses, and create new employment opportunities.
Meanwhile, the SEC has remained silent about why it refused to approve the IPO in time. A spokesperson for the federal agency reportedly stated in a Friday email that the SEC does not comment on individual company filings. Skeptics believe this development could be connected to President Donald Trump’s broader efforts to slash DEI initiatives as he appointed the current acting SEC chairman.
Bally’s now faces the task of revamping its IPO strategy while maintaining investor interest. The company must resubmit its proposal and wait for SEC clearance as it attempts to bring back as many minority investors as possible. Despite these setbacks, the operator remains optimistic regarding the Chicago casino project and will do its best to avoid further delays.
