(Next.io)—Bally’s has revised the terms of its public offering associated with a Chicago casino project, leading to the dismissal of a lawsuit targeting the scheme over complaints of discrimination.
Bally’s update, which removed previously mandated race- and gender-based eligibility requirements, was outlined in a new securities filing dated 22 April, with the associated lawsuit being dismissed without prejudice on 1 May.
The lawsuit, filed on behalf of Illinois resident Mark Glennon, alleged that the race- and sex-based investment criteria violated the Equal Protection Clause of the Fourteenth Amendment and federal civil rights laws.
The legal filing, Glennon v. Johnson, argued that the City of Chicago’s policy amounted to unconstitutional discrimination.
Glennon was barred from investing in the offering solely because he did not meet the required racial or gender identity categories.
The revised structure no longer requires that investors be women or racial minorities to participate in the initial public offering (IPO), thereby opening the opportunity to all eligible residents regardless of race or sex.
The public offering in question was tied to Bally’s development of Chicago’s first full-scale casino, a $1.7bn project approved by the city and the Illinois Gaming Board.
As part of a Host Community Agreement (HCA) between Bally’s and the City of Chicago, the original terms of the IPO restricted participation to so-called “minority” investors.
Under that agreement, 25% of the casino’s ownership was to be reserved for women or racial minorities.
This clause was enforced through the offering of 10,000 shares that were made available exclusively to individuals fitting the city’s definition of minority ownership.
Liberty Justice Center steps in
The restrictive offering sparked legal action in January when the Liberty Justice Center, a public interest law firm, filed a federal lawsuit against the scheme.
The suit targeted the City of Chicago, Chicago Mayor Brandon Johnson, Treasurer Melissa Conyears-Irvin, members of the Illinois Gaming Board and Bally’s Chicago Operating Company.
The Liberty Justice Center maintained that the government cannot impose public investment opportunities that are contingent on immutable characteristics such as race or gender, even when the goal is to promote diversity or rectify historic inequities.
The lawsuit emphasised that all residents should have equal access to participate in a public economic opportunity, particularly when it involves a government-approved monopoly like a casino.
The revised offering maintains a preference for residents of Chicago and Illinois, but it no longer includes any specific criteria tied to race or sex.
This effectively nullifies the original quota requirement included in the Host Community Agreement while preserving the broader objective of local investment participation.
Bally’s Chairman Soo Kim, in comments made to Crain’s Chicago Business, stated that the company wanted to continue with the public offering but recognised the legal and policy challenges of enforcing fixed racial and gender quotas.
He acknowledged the original intention behind the HCA’s provisions but noted that the approach had proven untenable.
According to Kim, Bally’s adjusted the offering to comply with federal standards while still encouraging local ownership.
The casino, once constructed, is expected to generate substantial economic activity in Chicago, with projected revenues and tax contributions earmarked for the city’s underfunded pension systems.