The Wisconsin Institute for Law & Liberty (WILL) has initiated legal action against several entities involved in the development of Bally’s Chicago Casino, arguing that the offering of stock solely to minorities and women violates U.S. civil rights laws. Representing the American Alliance for Equal Rights (AAER), WILL contends that the city, the Illinois Gaming Board, and Bally’s Chicago Casino are unlawfully limiting investment opportunities based on race and gender, according to WisPolitics. This lawsuit aims to halt the investment program, which is part of the $1.7 billion casino development in downtown Chicago.

Scheduled to open in 2026, Bally’s Chicago will feature a massive casino complex, including a 500-room hotel, a 3,000-seat theater, and thousands of gaming machines. As part of the city’s Host Community Agreement (HCA), Bally’s is committed to ensuring 25% of the project’s ownership be held by minorities. However, the $250 million initial public offering (IPO) to raise funds for the project is restricted to women and individuals who meet the city’s classification of minorities, such as African Americans, Asian Americans, and Hispanics.

This restriction has sparked legal controversy, as WILL argues in its complaint (pdf) that this practice violates the Civil Rights Act of 1866 and other laws aimed at preventing racial discrimination in business dealings. Two potential investors, Richard Fisher and Phillip Aronoff, are named as plaintiffs in the lawsuit, as they were denied the ability to invest in Bally’s project based on their race. According to WILL Associate Counsel Skylar Croy, the approach taken by Bally’s “threatens the entire development” and calls for an immediate cessation of the race-based investment policy. He stresses that “the same investment should be open to all, regardless of race.”

Concerns Over Legal Ramifications and Investment Viability

Bally’s Chicago, a cornerstone project for the city’s River West neighborhood, is touted as a major boost for local development and job creation. Yet, the lawsuit claims that the city’s decision to impose such restrictions could ultimately undermine the project. WILL Deputy Counsel Dan Lennington highlighted that the current trajectory of racial exclusivity in the investment process, especially when compounded by federal shifts towards racial equality, makes it imperative to challenge such practices at all levels.

The legal ramifications of the lawsuit extend beyond the current controversy surrounding the investment restrictions. As noted in Bally’s Securities and Exchange Commission (SEC) filing, the company’s decision to limit the IPO to certain racial groups could lead to substantial costs if the HCA is found to be unconstitutional. This might not only affect the casino’s ability to operate smoothly but could potentially jeopardize its gaming license.

Political Figures Support Minority Investment Opportunity

Despite the legal battle, some Chicago officials have publicly supported the restricted investment opportunity, describing it as a step toward building “generational wealth” within marginalized communities, according to Fox News. City Treasurer Melissa Conyears-Ervin and members of the Aldermanic Black Caucus have hosted information sessions aimed at promoting the opportunity to local minority and women investors. Attendees of these events, such as those in the city’s largest Black ward, have shown enthusiasm for the chance to participate in the project with as little as $250, thanks to a loan covering the remainder of the $25,000 share price.

While some may see this as an innovative way to offer access to wealth-building opportunities, others argue that it presents a highly risky investment proposition. The shares offered through Bally’s IPO come with extensive restrictions on transferability, and potential investors are warned that they may not see any dividends for several years. According to the offering documents, Bally’s does not expect to have cash available for distribution until approximately 2029. The 11% annual interest on the loans, compounded quarterly, further raises concerns about the speculative nature of the investment.