Bally’s Corporation is reviving the stalled public offering for shares in its Chicago casino project, but without its original pitch aimed at minority and women investors, a shift following mounting pressure from federal regulators under the Trump administration.
The gambling company said this week it has restructured the IPO to give preference to Chicago and Illinois residents rather than explicitly prioritizing women and minority participants, a move its lawyers advised could help avoid delays or rejection by the Securities and Exchange Commission, Crain’s reported.
Bally’s returned deposits earlier this year after lawsuits from white investors and months of inaction from the SEC left the offering in limbo.
The pivot marks a significant change from the company’s earlier approach, which sought to honor a host community agreement with the city of Chicago pledging 25 percent minority ownership of the River West casino and entertainment complex.
Bally’s Chairman Soo Kim said the updated offering still aligns with the spirit of that commitment, even if the language has softened so as not to “offend federal sensibilities.”
“We’re going to drop [minority targeting] in our federal engagement, because it’s not working,” Kim told the outlet. “With these hard and fast rules, nobody will get any equity.”
The shift comes amid growing financial and political pressure on the $1.7 billion project. Earlier this month, Fitch Ratings downgraded Bally’s credit to B-, citing execution risk, rising debt and lower than expected revenue at the temporary Medinah Temple casino, which brought in less than $8.8 million in February, its lowest monthly total in more than a year.
Bally’s landed $940 million in private debt last summer to get demolition and foundation work underway, but the IPO had been a key piece of the company’s equity strategy. Kim said Bally’s will front that capital if needed, though he expects many of the original 1,500 would-be investors to rejoin under the revised offering.
— Judah Duke
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