CHICAGO — Bally’s Chicago is inviting women and people of color to become financial investors in the city’s first permanent casino, promoting the offer as “a chance to build generational wealth.”
But with bids due Jan. 31, financial experts are offering this advice for consumers: Don’t invest more than what you can afford to lose, because if the casino is never built or goes out of business, you’ll lose it all.
Bally’s won Chicago’s casino bid in 2022 after then-Mayor Lori Lightfoot selected the company over several competitors. Bally’s proposal included the highest projected annual payout for the city: nearly $200 million, along with a $40 million upfront payment and $4 million in annual payments.
As part of that deal, Bally’s is required to offer women and people of color a collective 25 percent equity stake in the $1.7 billion casino currently under construction in River West.
Last month, Bally’s announced details of the investment offer. The minority investment stake lets individuals invest anywhere from $250 to $25,000 per share in Bally’s Chicago casino. The timing of payouts will vary, and whether investors will see any return on their investment remains uncertain.
Simply put, it’s a high-risk investment, financial experts told Block Club.
“To say this will guarantee generational wealth building I think is a strong statement,” said William Towns, a professor of social impact at Northwestern University’s Kellogg School of Management and managing director of Chi-Town Impact, a private equity fund. “Could it possibly lead to that? Yes, it could, but there’s some big caveats there.”
Last week, members of the City Council’s Black Caucus and City Treasurer Melissa Conyears-Ervin hosted two informational meetings about the “investment opportunity” on the West and South sides.
“As a resident of Chicago, for a project so massive that is being built, let’s be frank, this project will affect our community, and we ought to have the right to invest in it, if we choose,” Conyears-Ervin told residents at the Jan. 14 meeting at Malcolm X College.
“I must emphasize that this is a private offering, and like all investments, it comes with risk,” Conyears-Ervin said at the meeting. “It’s important that you carefully evaluate this opportunity and ask questions to fully understand the terms and the risk involved.”
Bally’s Investment Fine Print
Bally’s Casino is offering 10,000 Class A shares, which grant investors partial ownership in Bally’s Chicago. Collectively, these investors will own 25 percent of the casino, according to documents filled with the Securities and Exchange Commission.
The investment offer is open to Illinois, New York, Texas and Florida residents. Although specifically earmarked for women and people of color, the company is not exclusively checking if investors are women or people of color, according to officials.
Through the offering, the company plans to raise $250 million to repay loans associated with building the permanent casino in River West. Bally’s has already secured $940 million in private financing for the project, which is set to open September of 2026.
There are four different investment tiers available. Each share is valued at $25,000, with a mix of lower-cost shares available, according to investment documents.
Here’s the breakdown:
- 500 shares are available for $250 each
- 1,000 shares are available for $2,500 each
- 1,000 shares are available for $5,000 each
- 7,500 shares are available for $25,000 each
Bally’s will fund the difference between the $25,000 share value and the investor’s chosen buy-in price through a financial instrument called an “attributable subordinated loan.” The loan will be funded through the $250 million Bally’s intends to raise from investors, and is technically debt that carries an 11 percent interest rate. The loan would be paid off through Bally’s future profits.
Anyone who purchases a share with a loan attached will need to wait until that debt is paid off by Bally’s. People who invest the full value of a share can start to receive dividends when the casino is profitable.
Bally’s has estimated it will take three to five years after opening for the permanent casino to become profitable, according to investment documents.
What Are The Risks?
After reviewing the parameters of the Bally’s investment offer, Towns told Block Club Chicago he didn’t see anything “exotic” about its structure, calling it standard, but he cautioned that the offering is high risk.
“You have an opportunity to lose all of your money,” Towns said. “So one shouldn’t invest more than you’re willing or able to lose.”
Investors will not receive dividends, or payouts, until “approximately three to five years after our permanent resort and casino begins operations,” according to publicly available investment documents.
Once dividends become available, they will be paid quarterly, the documents note. But those payouts “may be significantly reduced or eliminated entirely,” meaning the company can decide to not pay dividends to investors without giving a reason.
Still, Sidney Dillard, partner at Loop Capital and underwriter for the investment, said that Bally’s plans to pay out dividends at least annually. She also confirmed there is no projected timeline for when the subordinated loans connected to the low-cost shares will be paid off — meaning, there is no timeline as to when investors will begin to make money.
“Certainly the less cash that you put in, one could logically conclude that it’ll take a longer period of time for the cash distributions once they start to pay off that loan,” Dillard said.
Additionally, if the casino fails to open or goes out of business, investors lose all the money they put in, according to the community presentation.
“That’s a tall order,” said Brian Thompson, an economics professor at DePaul University. “Should the casino not be built and you would not get your money back … I would assume that that was clearly defined in the discussion, but, boy, that’s a big one.”
The potential profitability for this investment relies solely on the success of the permanent casino, Towns said.
“If it does extremely well after three years, you could get larger dividends,” Towns said. “If they’re not doing well, you could get no dividends. That’s a part of the risk that you’re taking with these sorts of investments.”
Although Bally’s Chicago has not provided official numbers on how much money investors could receive if its casino becomes profitable, a 275-page prospectus provides hypothetical scenarios for how much money the casino could generate.
By Bally’s estimates, the casino could generate between $814 million and $1.2 billion annually in adjusted gross revenue for food and beverage, gaming and the hotel combined. The hypothetical revenues are based on optimal performance and data from nearby comparable casinos, investment documents show.
The document stresses that “actual results may differ materially from the hypothetical scenarios presented.”
The projections in the prospectus are also higher than what the city estimated Bally’s would generate. Lightfoot’s administration projected $638 million in revenue for 2026, $751 million for 2027 and $806 million in 2028 in gaming revenue alone.
Experts stressed that despite these numbers, potential investors should still be cautious, because markets are always subject to change.
“There’s the risk that the casino may never open. There’s the risk that the casino may open but not be successful. There’s the risk that the casino is successful, but it takes a long time before you get your dividends. So there’s just different types of risks,” Thompson said. “You can’t make this investment expecting to get a return on your money in the next couple years, because that’s just not even, in the most optimistic scenario, going to happen.”
The Tax Incentive Wild Card
While Bally’s is pitching to potential investors on the South and West sides, the company is also fighting the city for a tax incentive it says is necessary to open its casino.
Last week the company filed for a lucrative 12-year property tax reduction that, if approved by City Council and Cook County, would lower its property tax rate from 25 percent to 10 percent of its market value, according to Crain’s.
Bally’s construction cannot be completed without the tax incentive, according to the filing. However, Mayor Brandon Johnson and the city’s corporate counsel, Mary Richardson-Lowry, said after last week’s City Council meeting that the tax incentive could not be approved because the host agreement precludes it.
Bally’s is still pursuing the tax incentive despite this response, according to Christopher Jewett, senior vice president of corporate development at Bally’s.
“Any development of this magnitude must consider the economic development tools created and imagined by our elected officials for this exact type of project, such as the incentive recently granted to the quantum campus,” Jewett said in a statement to Block Club. “We, like all developers, have a right to apply.”
Bally’s did not answer questions about the viability of the project without the incentive.
Meanwhile, time is ticking for potential investors.
Anyone interested must submit their bid by Jan. 31. To put in a bid, potential investors must create a profile on Bally’s investment page, then follow the prompts before selecting an investment tier. Investors must have the money ready and on hand.
If the bid is accepted, the money will be withdrawn from the person’s bank account, Dillard said. If the investment tier is not available or is full, the investor might be offered a different tier in its place.
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