Dispute Over Exclusion of White Men in IPO Settled Between Bally's and Chicago
Posted on: June 9, 2025, 05:53h.
Last updated on: June 9, 2025, 05:53h.
Todd Shriber @etfgodfather - Read More - Financial - Gaming Business - Mergers and Acquisitions
City, gaming company settle litigation stemming from proposed IPO that barred white menSuit imposed by conservative legal group on behalf of two plaintiffs
After a tumultuous few months, Bally's and the city of Chicago have settled legal action resulting from a proposed IPO with discriminatory conditions that excluded white male investors. The lawsuit, initiated by the Wisconsin Institute for Law & Liberty on behalf of the American Alliance for Equal Rights (AAER) and two individual plaintiffs, sparked controversy over alleged racial discrimination.
The two white men, Phillip Aronoff and Richard Fisher, sought to invest in Bally's Chicago IPO but were prevented due to the offer's initial racially-exclusive criteria. The settlement agreement was reached in the US District Court for the Northern District of Illinois last Friday, with financial terms remaining confidential.
According to a legal filing, all claims in this matter have been dismissed with prejudice, meaning that the plaintiffs will not be able to refile the lawsuit. With both parties bearing their respective costs and legal fees, the case has been put to rest, at least for now.
The Liberty Justice Center, which previously represented Mark Glennon in his suit against Bally's affiliates, the city of Chicago, and the Illinois Gaming Board (IGB), declared a significant victory by compelling the gaming company to update its IPO prospectus, removing the explicit demographic limitations.
The Evolving Scene of Bally's Chicago IPO
Initiated as part of the Host City Agreement (HCA), Bally's aimed to sell a 25% stake in the first gaming venue within Chicago city limits. However, the offer had been restricted to only minority and women investors, generating both support and backlash.
Following public outcry, the Securities and Exchange Commission (SEC) delayed its approval of the IPO in March, leading to speculation over the proposal's survival due to President Trump’s anti-diversity, equity, and inclusion (DEI) agenda.
In April, Bally's updated its prospectus, omitting the minority/women-only clause, acting in response to mounting pressure. Despite indicating a preference for investors from the Chicago and Illinois areas, the operator has avoided implementing demographic exclusion tactics that could invite potential legal challenges.
Bally's has stated its intentions to open the share sale to a broad audience, fostering inclusivity while still targeting local investors, thereby meeting the 25% minority ownership requirement without incurring potential legal issues.
The Nitty-Gritty of Bally's Chicago IPO
Initially aiming to raise $250 million to fund its $1.7 billion integrated resort in the third-largest US city, Bally's had initially planned to float the idea in May 2023. With the DEI initiative gaining traction in Corporate America at the time, Bally's seemed to be in line with prevailing sentiments.
However, in recent months, some companies have downplayed their emphasis on DEI initiatives. Bally's has toyed with the idea of launching an IPO in New York City should it secure a casino license, but none of its proposed deals contain explicit demographic restrictions.
If Bally's were to proceed with its Chicago IPO under its original financial terms, investors would be required to make a minimum investment of $25,000, divisible across 500 shares, 1,000 shares, or larger units, with 7,500 shares maxing out at $250,000, considering the per-share price of $250.
With the IPO still pending SEC approval and immersed in the aftermath of controversial discriminatory practices, Bally's Chicago continues to navigate complex regulatory and investor relations terrain.
- The financial terms of the settlement between Bally's and the city of Chicago, resulting from the lawsuit over the IPO's discriminatory conditions, were kept confidential.
- The legal filing indicated that all claims in the lawsuit, which was initiated by the Wisconsin Institute for Law & Liberty on behalf of the American Alliance for Equal Rights (AAER) and two individual plaintiffs, have been dismissed with prejudice.
- The Liberty Justice Center, which previously represented Mark Glennon in his suit against Bally's affiliates, declared a significant victory by compelling Bally's to update its IPO prospectus, removing the explicit demographic limitations.
- Bally's has stated its intentions to open the share sale to a broad audience, fostering inclusivity while still targeting local investors, thereby meeting the 25% minority ownership requirement without incurring potential legal issues.
- The Midwest business landscape, particularly in the realm of real-estate and finance, is closely watching the evolution of Bally's Chicago IPO, with commercial gaming, investing, and regional news outlets following the developments closely.
