Mayor Lori Lightfoot has rightfully pushed to ensure that Chicago’s very first casino includes minority investors, and for more than two decades, Illinois law has mandated minority ownership. Emil Jones Jr., the state’s first African American Illinois Senate president, was a guiding force in making the state’s minority ownership requirement a reality.
With a billion-dollar casino coming to our city, we have an incredible opportunity to create multigenerational wealth for minority investors who live in communities that have been neglected for far too long.
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I know this firsthand, having been an investor in the Rivers Des Plaines casino. Back in 2011 — when I was an employee of Rush Street Gaming, the owner and operator of Rivers Des Plaines — I was able to invest in the casino under the same terms as Rush Street. Years later, as part of a partial sale of the casino, I had the opportunity to sell at the exact same valuation as the other investors, including institutional investors, or continue holding my investment under the same terms, just as Rush Street did. Put simply, I was treated just like every other investor — and it has changed my life for the better.
But that’s not how all companies bidding for the Chicago casino are apparently treating their minority investors. According to Crain’s, the hedge fund-owned Bally’s Corp., based in Rhode Island, offered lesser terms to minority investors, with Bally’s agreement allowing them to diminish and potentially erase any profits that minority investors would make compared to the rest of the ownership. It did so in three ways.
First, Bally’s would be able to force minority investors to sell their investment back to the corporation six years after the casino opened. A minority investor would have no choice but to sell, even if they wanted to hold onto their investment.
Second, Bally’s deal would not allow its minority investors to realize the full market value of their investment. Bally’s deal says that when it has the right to buy the minority investors out, the valuation for minority investors is capped at eight times the casino’s annual earnings, even though industry standards run to 11-12 times earnings for a property like this.
Finally, Bally’s is offering to finance minority investors’ stake at a predatory interest rate of 11%, compounding quarterly if not kept current with cash payments. It’s entirely possible that a minority investor’s equity investment could be wiped out and Bally’s able to buy it back for nothing.
To me, it’s three strikes and you’re out. If the terms are as reported, Bally’s has already shown who they are; they view minority investors as second-class citizens. Therefore, Bally’s should be disqualified from operating Chicago’s first casino.
Tanyala Rodgers-Coe, Bronzeville
CPS and its dysfunction
Another example of Chicago Public School’s dysfunction: an entire high school closes for instruction when the juniors take the required SAT exam in school. The freshmen, sophomores and seniors (75% of the school) stay home and have no school because one class is taking a three-hour exam. Then next week, when the freshmen and sophomores take the PSAT, school is again cancelled for the juniors and seniors. Essentially, it’s two days of missed instruction because CPS can’t juggle simple logistics.
Once upon a time educators had a can-do attitude and embraced rigor. Today we have a can’t-do attitude and embrace mediocrity. But remember, and just repeat, as CPS and the union says, “It’s all about the kids.”
William Choslovsky, Sheffield Neighbors
