Bally’s Corporation settled both federal lawsuits over its Chicago casino investment offering in 2025 after rewriting the deal to remove the race- and gender-based eligibility rules the plaintiffs had challenged. The Bally’s Chicago casino lawsuit settlement in each case was reached on confidential terms, with no publicly disclosed payment to the plaintiffs. The practical result was that the roughly $250 million offering of Class A Interests opened to investors regardless of race or sex, with a preference instead for Chicago and Illinois residents.
What the Lawsuits Challenged
To help satisfy a 25% minority ownership target written into its Host Community Agreement with the City of Chicago, Bally’s structured an initial public offering of Class A Interests in four tiers priced between $250 and $25,000. Participation was limited to people who met “Class A Qualification Criteria” set by the Chicago municipal code: women and members of designated minority groups, including African Americans, Hispanic Americans, Asian Americans, and American Indians.1U.S. Securities and Exchange Commission. Bally’s Chicago Inc. Form S-1/A White men who did not fall into any of these categories could not invest.
The offering was filed with the SEC but stalled there for months, in part because of the litigation and what Bally’s described in later SEC filings as the potential for “substantial costs defending these lawsuits.”2Chicago Sun-Times. Bally’s Minority Investor Casino Lawsuit Chicago Settled
The Two Federal Suits
Both cases were filed in late January 2025 in the U.S. District Court for the Northern District of Illinois, one day apart.
American Alliance for Equal Rights v. City of Chicago
On January 29, 2025, the Wisconsin Institute for Law and Liberty sued on behalf of the American Alliance for Equal Rights and two of its members, Richard Fisher and Phillip Aronoff, both white men from Texas. Fisher had applied the day before and was told he was “unwelcome”; Aronoff did not apply, calling it futile.3Wisconsin Institute for Law & Liberty. AAER v. City of Chicago, Complaint The complaint alleged violations of 42 U.S.C. §§ 1981, 1982, 1983, and 1985 and the Fourteenth Amendment’s Equal Protection Clause. The defendants included the City of Chicago, Bally’s Chicago Inc., Bally’s Chicago Operating Company, and members of the Illinois Gaming Board.4Bloomberg Law. American Alliance for Equal Rights v. City of Chicago, Complaint
Glennon v. Johnson
The next day, January 30, the Liberty Justice Center filed a separate suit on behalf of Mark Glennon, an Illinois resident and founder of the policy site Wirepoints. Glennon, a white man with a venture capital law background, had applied on January 25 and been denied. His complaint, No. 1:25-cv-1057, named Mayor Brandon Johnson, City Treasurer Melissa Conyears-Ervin, the city, Bally’s Chicago Operating Company, and members of the Illinois Gaming Board, and raised claims under 42 U.S.C. §§ 1981, 1982, and 1983.5U.S. District Court, Northern District of Illinois. Glennon v. Johnson, Order on TRO Glennon sought a temporary restraining order to stop the IPO from closing on its scheduled February 7, 2025 date.
The Court Refused to Block the Offering
On February 6, 2025, Judge Franklin U. Valderrama denied Glennon’s motion for a temporary restraining order and preliminary injunction. The ruling turned largely on state action. The judge found that while the city had required 25% minority ownership through the Host Community Agreement, Bally’s independently chose to use a race-restricted IPO as its mechanism. The agreement “provided Bally’s with significant flexibility in determining a strategy,” the judge wrote, and “Bally’s—and Bally’s alone—chose a strategy that excluded Glennon.”6Liberty Justice Center. Order Denying Motion for Temporary Restraining Order, Glennon v. Johnson
The court also rejected the argument that the alleged constitutional violation was itself irreparable harm, distinguishing the situation from First Amendment cases where such harm is presumed, and held that the City of Chicago was not a proper party for injunctive relief because it was not the entity issuing the IPO. The underlying claims survived the denial, and both suits kept moving.
Bally’s Rewrote the Offering
On April 22, 2025, Bally’s filed an amended registration statement with the SEC that stripped all race and gender eligibility requirements. The revised prospectus said the company would give “preferential allocations of Class A Interests to City of Chicago residents and Illinois residents” and dropped any racial or gender criteria.7U.S. Securities and Exchange Commission. Bally’s Chicago Inc. Form S-1/A, Amendment No. 7
Bally’s Chairman Soo Kim framed the decision as a practical one. “We’re saying to the state of Illinois and Chicago that we understand what the policy goals were for these hard and fast rules, but we’re going to drop that in our federal engagement, because it’s not working,” Kim told reporters. “With these hard and fast rules, nobody will get any equity.”8Block Club Chicago. Bally’s Casino Nixes Controversial Minority Investment Offer The change came as the Trump administration had taken a broader stance against diversity, equity, and inclusion initiatives.2Chicago Sun-Times. Bally’s Minority Investor Casino Lawsuit Chicago Settled
How Each Case Ended
The Liberty Justice Center dismissed the Glennon case on May 1, 2025, calling the outcome a “significant victory” and a “win for equal opportunity.” Senior Counsel Reilly Stephens said: “No one should be excluded from participating in our economy on the basis of their race or sex.”9Liberty Justice Center. Major Win for Equal Opportunity: Bally’s Overhauls Casino IPO, Drops Race and Sex Requirements
The AAER case was resolved by a confidential settlement, with a stipulation of dismissal filed in Chicago federal court on June 6, 2025. The financial terms were not disclosed. WILL deputy counsel Dan Lennington said “Bally’s illegal and divisive investment plan is dead,” and Edward Blum, who leads the American Alliance for Equal Rights, said the group would continue to challenge similar programs elsewhere.10Wisconsin Institute for Law & Liberty. WILL Announces Settlement in Lawsuit Challenging Chicago Casino’s Minority-Only Investment Program
No public information indicates either settlement involved a monetary payment to the plaintiffs. The concrete outcome was the elimination of the race- and gender-based investment restrictions.
What the Settlement Did Not Change
The settlements ended the IPO’s eligibility criteria, not Bally’s underlying contractual obligations. Under the Host Community Agreement approved by the Chicago City Council in May 2022, Bally’s is still required to use best efforts to achieve 25% minority ownership of the casino, 40% minority representation on its board, and commercially reasonable efforts toward a workforce that is at least 60% minority.11Liberty Justice Center. Glennon v. Johnson Those targets echo the Illinois Gambling Act, 230 ILCS 10/6(a-5)(9), which directs casino license applicants to show “best efforts to reach a goal of 25% ownership representation by minority persons and 5% ownership representation by women.”12Illinois General Assembly. 230 ILCS 10/6 Bally’s remains contractually bound to work toward 25% minority ownership of the project.2Chicago Sun-Times. Bally’s Minority Investor Casino Lawsuit Chicago Settled
What Happened to the IPO
Once the rewritten offering cleared the SEC, the IPO moved forward and drew nearly 1,800 investors. Shares were priced between $250 and $25,000, and the pool included 1,573 Illinois shareholders, 1,007 of them from Chicago. Bally’s described the roughly $250 million raised as the first in a planned series of placements to finance the permanent casino.13Chicago Sun-Times. Bally’s Chicago Casino IPO SEC Minority Investment
Where This Fits in the Broader Legal Picture
Both suits were part of a wave of litigation that followed the Supreme Court’s 2023 ruling in Students for Fair Admissions v. Harvard, which struck down race-conscious college admissions. Although that decision was limited to higher education, its reasoning on the Equal Protection Clause has been invoked against race-conscious programs in business, government contracting, and philanthropy.14NPR. Affirmative Action Supreme Court Decision Legal scholars have described a pattern of institutional retreat from diversity programs driven by litigation risk rather than final court rulings declaring the programs unlawful.15Duke Center for Law and Public Policy. DEI Under Scrutiny: Doctrinal Shifts, Litigation Risk, and Emerging Threats to Civil Rights Law After SFFA Bally’s followed that pattern: the company abandoned the minority-only offering not because a court held it unconstitutional, but because the lawsuits, the SEC delays, and the political environment together made the original structure unworkable.