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Bally’s Corp. said it has settled a lawsuit brought by two white men and a conservative legal group that challenged a $1.7 billion Chicago casino project that offered ownership stakes only to women and people of color.
The settlement comes after Bally’s revised the share-sale terms in April by opening it up to other investors. No terms were disclosed Friday in a federal court filing, which said all parties in the case had agreed to a dismissal of the case. The men sued the company and the city of Chicago in January alleging discrimination.
Bally’s initially offered a 25% stake in the project to only women and minority investors as part of the company’s bid to win the casino license from the city in 2022. It was part of a broader effort to create wealth among disenfranchised communities that historically don’t reap the benefits of Chicago’s biggest developments.
But shortly after Bally’s filed an initial offering with the US Securities and Exchange Commission in December, Richard Fisher and Phillip Aronoff filed suit, along with the conservative legal group American Alliance for Equal Rights. They claimed Fisher and Aronoff’s civil rights had been violated, arguing they were unable to purchase shares because they were White men.
“We are very happy with the resolution and Bally’s decision not to use race in this investment,” Dan Lennington, an attorney for the men and the AAER, said in a statement. “This case should serve as a warning to other companies that hope to dole out investment opportunities based on race. It is illegal and we’ll fight it wherever we can.”
Lennington declined to comment on whether Fisher and Aronoff had purchased any shares of the offering since it had been opened up to other investors.
Read More: Chicago Casino Seeks Minority Investors Willing to Borrow at 11%
Bally’s didn’t immediately respond to requests for comment. The city of Chicago declined to comment, as did the Illinois Gaming Board, which was also a defendant in the case.
Diversity, equity and inclusion initiatives have been targeted by President Donald Trump during his second term, threatening to withhold federal funding and filing lawsuits claiming such programs are discriminatory. AAER says it focuses on DEI initiatives and “distinctions made on the basis of race and ethnicity.” The organization was founded by conservative legal activist Edward Blum.
In an April SEC filing, Bally’s said more lawsuits were possible and that they could threaten the project.
“The Host Community Agreement could be modified or terminated, which could adversely affect our ability to operate our casinos and could materially adversely affect our business, financial condition and results of operations,” Bally’s said in the filing.
The case is American Alliance for Equal Rights v. Chicago, 25-cv-01017, US District Court, Northern District of Illinois (Chicago).
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