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On Monday, the Bally’s Corp. announced that shares in its future permanent Chicago casino are available for certain members of the public to purchase. The offering, which equates to 25% of the interest in the casino’s operations, fulfills part of the agreement between Bally’s and Chicago that helped Bally’s land the sole license to operate a casino in Chicago.
Under the terms of the agreement, qualification for investors will focus on ethnic/racial minorities and women. Investors looking for a quick profit might want to temper their expectations.
Bally’s makes good on stock promise
According to a May 2022 recommendation report from former Chicago mayor Lori Lightfoot, the commitment from Bally’s to prioritize minority ownership of the casino was a deciding factor in her recommending Bally’s to build and operate Chicago’s first and so far only casino. The Dec. 30, 2024 announcement from Bally’s follows the script for that commitment.
Bally’s says that “the monies raised are intended to support the funding for Bally’s planned permanent casino and resort” and points to its promise to provide such investment opportunities. Further information reveals that potential investors “must be a woman or a minority” while entities that wish to invest “must be controlled by women or minorities.”
While Bally’s committed to this offering before actually embarking on its Chicago casino project, this isn’t the first time it has raised capital for the development.
Stock offering follows GLPI partnership
In July, Gaming and Leisure Properties, Inc. (GLPI) essentially became the landlord for the future permanent Bally’s casino in Chicago. Bally’s and GLPI announced a new partnership that involved “all funded improvements” and the land that the casino occupies became property of GLPI and will be leased to Bally’s.
That investment was crucial to begin construction of the facility along the Chicago River and meet the funding commitments that Bally’s made. These new investments take a similar tone but are unique in their details.
Novel method of securing minority investment
Making shares of a specific casino’s operations, rather than an entire gaming company’s business, is unique in the US gambling industry. Securing investments from minority partners is not as uncommon, though.
For example, The Cordish Companies announced in May 2021 that it secured $180 million in investments from people representing minorities in its proposal to build a Live!-branded casino in Richmond, Virginia. That project never came to fruition, however, as Richmond voters defeated local referendums to authorize casino gaming twice.
The unique twist in Bally’s offering is that investors will be able to get a stake in the 25% equity of the Chicago casino for a far lower buy-in than is typically necessary for such holdings. After qualification, investors can pay as little as $250 to take part in the offering.
That low buy-in should reflect expectations for people who participate. Bally’s promised little in the way of returns in its agreement with Chicago.
Forecast for returns on shares in Bally’s Chicago
In the agreement with Chicago, Bally’s stressed that all stakeholders will get votes in matters pertaining to the casino’s operation but also tries to communicate the risk involved in the investment. Bally’s stated that it doesn’t expect to pay any dividends to shareholders until “approximately three to five years after our permanent resort and casino begins operations.” Furthermore, Bally’s specified that it is “permitted, but not required” to pay any dividends at any point.
Bally’s expects this initial offering to last through early February 2025, although that could see an extension based on demand. It’s a rare opportunity for people in Chicago to legitimately claim that they own part of a Bally’s casino.
If the third-most populous city in the United States delivers to Bally’s expectations, that stake could produce dividends for those who are willing to wait.
