S-1/A 1 tm2310971-13_s1a.htm S-1/A tm2310971-13_s1a - block - 35.9791029s
As filed with the Securities and Exchange Commission on December 27, 2024
Registration No. 333-283772
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO .2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Bally’s Chicago, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
7011
(Primary Standard Industrial
Classification Code Number)
88-2870098
(I.R.S. Employer
Identification No.)
100 Westminster Street
Providence, RI 02903
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Ameet Patel
640 N LaSalle, Suite 460
Chicago, IL 60654
(401) 475-8474
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Sony Ben-Moshe, Esq.
Senet Bischoff, Esq.
John Slater, Esq.
Latham & Watkins LLP
1271 Avenue of the Americas
New York, NY 10020
(212) 906-1200
Oscar David, Esq.
Timothy Kincaid, Esq.
Michael Blankenship, Esq.
Winston & Strawn LLP
35 W. Wacker Drive
Chicago, IL 60601
(312) 558-5600
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 27, 2024
PRELIMINARY PROSPECTUS
[MISSING IMAGE: lg_ballys-pn.jpg]
$195,125,000
Bally’s Chicago, Inc.
500 Class A-1 Interests at $250 per share, with a par value of $0.001 per share
1,000 Class A-2 Interests at $2,500 per share, with a par value of $0.001 per share
1,000 Class A-3 Interests at $5,000 per share, with a par value of $0.001 per share
7,500 Class A-4 Interests at $25,000 per share, with a par value of $0.001 per share
This is the initial public offering of Bally’s Chicago, Inc., a Delaware corporation and indirect subsidiary of Bally’s Corporation, a Delaware corporation. Unless the context otherwise requires, the terms “the Company,” “we,” “us” or “our” in this prospectus refer to Bally’s Chicago, Inc. and its wholly-owned, consolidated subsidiaries, including Bally’s Chicago Operating Company, LLC, a Delaware limited liability company (“Bally’s Chicago OpCo”), and the terms “Bally’s Corporation” or “Bally’s” refer to Bally’s Corporation.
We are offering on a best efforts basis up to 10,000 in aggregate Class A Interests, allocated among 500 shares of Class A-1 common stock (the “Class A-1 Interests”) at $250 per share, 1,000 shares of Class A-2 common stock (the “Class A-2 Interests”) at $2,500 per share, 1,000 shares of Class A-3 common stock (the “Class A-3 Interests”) at $5,000 per share and 7,500 shares of Class A-4 common stock (the “Class A-4 Interests” and, together with the Class A-1 Interests, the Class A-2 Interests and the Class A-3 Interests, the “Class A Interests”) at $25,000 per share of Bally’s Chicago, Inc. The Company has not made any arrangements to place the proceeds from this offering in an escrow or trust account. There are no minimum purchase requirements for each investor. There is no minimum number of Class A Interests to be sold or minimum aggregate offering proceeds for this offering to close.
Certain investors (the “private placement investors”) have entered into agreements with us pursuant to which they have agreed to purchase            Class A-1 Interests,            Class A-2 Interests,            Class A-3 Interests and            Class A-4 Interests, respectively, in a private placement (the “concurrent private placements”) at a price per share equal to the initial public offering. Our agreements with the private placement investors are contingent upon, and are scheduled to close immediately subsequent to, the closing of this offering as well as the satisfaction of certain conditions to closing as further described in “Concurrent Private Placements.”
Following the closing of this offering and the consummation of the Transactions (as defined herein), we will have five classes of stock: Class A-1 Interests, Class A-2 Interests, Class A-3 Interests, Class A-4 Interests and Class B Interests (the “Class B Interests”). Class B Interests are not being offered hereby, and will be held exclusively by Bally’s Chicago Holding Company, LLC (“Bally’s Chicago HoldCo”), our direct parent and a wholly-owned subsidiary of Bally’s Corporation. The rights of the holders of Class A Interests and Class B Interests will be identical, except with respect to the impact of the Subordinated Loans attributable to Class A-1 Interests, Class A-2 Interests and Class A-3 Interests described below, the rights to distributions as summarized below and that Class B Interests have no economic interest in Bally’s Chicago, Inc. Each Class A Interest and each Class B Interest is entitled to one vote per share on all matters submitted to a vote of stockholders. Following the closing of this offering and the concurrent private placements and the consummation of the Transactions, as the sole holder of our Class B Interests, Bally’s Chicago HoldCo will hold 75% of the voting power and no economic interest in Bally’s Chicago, Inc.

Following the closing of this offering and the concurrent private placements and the applications of proceeds therefrom and the consummation of the Transactions, we will be a holding company. Our principal asset will consist of the limited liability company interests (the “LLC Interests”) of Bally’s Chicago OpCo that we purchase directly from Bally’s Chicago OpCo with the net proceeds from this offering, the concurrent private placement and the Subordinated Loans (as defined herein), collectively representing an aggregate 25% economic interest in Bally’s Chicago OpCo. The remaining 75% economic interest in Bally’s Chicago OpCo will be owned by Bally’s Chicago HoldCo through its ownership of LLC Interests.
We will be the sole managing member of Bally’s Chicago OpCo. We will conduct our business through Bally’s Chicago OpCo.
In connection with this offering and the concurrent private placements, we intend to enter into a subordinated loan agreement with Bally’s Chicago OpCo pursuant to which Bally’s Chicago OpCo, as lender, will make subordinated loans to us, as borrower, in various tranches and in varying amounts based on the total number of Class A-1 Interests, Class A-2 Interests and Class A-3 Interests sold in this offering and the concurrent private placements. None of the new investors purchasing Class A Interests in this offering and the concurrent private placements will be a party to the subordinated loan agreement, or a borrower or lender under the Subordinated Loans (as defined herein). For each Class A-1 Interest sold in this offering and the concurrent private placements, we will incur $24,750 of subordinated loans from Bally’s Chicago OpCo (such loans, the “Class A-1 Subordinated Loans”). For each Class A-2 Interest sold in this offering and the concurrent private placements, we will incur $22,500 of subordinated loans from Bally’s Chicago OpCo (such loans, the “Class A-2 Subordinated Loans”). For each Class A-3 Interest sold in this offering and the concurrent private placements, we will incur $20,000 of subordinated loans from Bally’s Chicago OpCo (such loans, the “Class A-3 Subordinated Loans” and, together with the Class A-1 Subordinated Loans and Class A-2 Subordinated Loans, the “Subordinated Loans”). In connection with the consummation of the Transactions, Bally’s Chicago OpCo intends to assign the Subordinated Loans to Bally’s Chicago HoldCo in exchange for the cancellation of certain indebtedness owed by Bally’s Chicago OpCo to Bally’s Chicago HoldCo. We will not incur any Subordinated Loans or other debt in connection with the issuance of the Class A-4 Interests or the Class B Interests to be held by Bally’s Chicago HoldCo. Pursuant to the terms of our amended and restated certificate of incorporation to be in effect prior to the closing of this offering, so long as there are Subordinated Loans outstanding that are attributable to each of our various Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, any cash available for distribution that would otherwise be paid to holders of our Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, as applicable, will be required to be used for the repayment of principal and accrued interest on the corresponding Subordinated Loans owed by us. The Subordinated Loans will bear interest at a rate equal to 11.0% per annum, compounding quarterly. The Subordinated Loans will be non-recourse to the holders of our Class A Interests. See “Subordinated Loans.”
While we do not currently intend to issue any additional securities in the future, we may be required to do so from time to time in order to continue to fund our operations. To the extent we decide to issue additional Class A Interests in the future, we may be required to offer you an opportunity to participate pro rata in the offering in order for such offering not to dilute the ownership of individuals meeting the Class A Qualification Criteria below the minimum 25% requirement under the Host Community Agreement (as defined herein). However, to the extent that you determine that you either do not want to participate or cannot participate in any such offering, you will suffer immediate dilution to the extent such offering is completed without your participation. Additionally, we cannot guarantee that we will offer financing options similar to the Subordinated Loans in the future, which would significantly increase the costs of any future investment.
Neither our Class A Interests nor our Class B Interests will be listed on any national securities exchange or on any other stock exchange, regulated trading facility or automated dealer quotation system in the United States or internationally. There is no trading market for our Class A Interests and, due to certain transferability restrictions described below and elsewhere in this prospectus, an active market for our Class A Interests will not likely develop in the future. As such, our Class A Interests will have limited liquidity and holders of our Class A Interests may not be able to monetize their full investment in our Class A Interests, if at all. See “Description of Capital Stock” and “Shares Eligible for Future Sale.”
This offering is only being made to individuals and entities that satisfy the Class A Qualification Criteria (as defined herein). Our Host Community Agreement with the City of Chicago requires that 25% of Bally’s Chicago OpCo’s equity must be owned by persons that have satisfied the Class A Qualification Criteria. The Class A Qualification Criteria include, among other criteria, that the person:


if an individual, must be a woman;

if an individual, must be a Minority, as defined by MCC 2-92-670(n) (see below); or

if an entity, must be controlled by women or Minorities.
MCC 2-92-670(n), in turn, defines Minority as:

any individual in the following racial or ethnic groups:

African-Americans or Blacks (including persons having origins in any of the Black racial groups of Africa);

American Indians (including persons having origins in any of the original peoples of North and South America (including Central America) and who maintain tribal affiliation or community attachment);

Asian-Americans (including persons whose origins are in any of the original peoples of the Far East, Southeast Asia, the islands of the Pacific or the Northern Marianas or the Indian Subcontinent);

Hispanics (including persons of Spanish culture with origins in Mexico, South or Central America or the Caribbean Islands, regardless of race); and

individual members of other groups, including but not limited to Arab-Americans, found by the City of Chicago to be socially disadvantaged by having suffered racial or ethnic prejudice or cultural bias within American society, without regard to individual qualities, resulting in decreased opportunities to compete in Chicago area markets or to do business with the City of Chicago. Qualification under this clause is determined on a case-by-case basis and there is no exhaustive or definitive list of groups or individuals that the City of Chicago has determined to qualify as Minority under this clause. However, in the event the City of Chicago identifies any additional groups or individuals as falling under this clause in the future, members of such groups would satisfy the Class A Qualification Criteria.
If there are any changes to the groups included in MCC 2-92-670(n), and consequently to the Class A Qualification Criteria, prior to the closing of this offering, we will communicate such changes by filing an amendment to this prospectus with the Securities and Exchange Commission (the “SEC”).
Our Class A Interests are subject to restrictions on transferability and redemption provisions, each of which will individually and in the aggregate materially impact the ability of holders of our Class A Interests to transfer their shares following the closing of this offering. Our Class A Interests can only be transferred without our consent to Permitted Transferees (as defined herein). Additionally, our Class A Interests can only be transferred with our consent to individuals or entities that have satisfied the Class A Qualification Criteria and, in the case of Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, only after the Subordinated Loan attributable to such Interest has been paid in full and such Interests are converted to Class A-4 Interests. See “Description of Capital Stock” and “Shares Eligible for Future Sale.” Class A Interests also cannot be transferred to employee benefit plans, IRAs and other Plans (as defined herein). See “Certain ERISA Considerations.”
Moreover, as part of the qualification process, investors will be required to provide certain information described in this prospectus in order to invest in this offering. The method for submitting investment commitments and a more detailed description of this offering process are included in “Plan of Distribution — Offering Process.”
SeeShares Eligible for Future Salebeginning on page 179 for a definition of the Class A Qualification Criteria and “Prospectus Summary — Our Relationship with Chicago” beginning on page 15 for additional requirements under the Host Community Agreement.
As a result of the terms of this offering, this offering is highly speculative and the securities involve a high degree of risk. Investing in our Class A Interests should be considered only by persons who can afford the loss of their entire investment. See “Risk Factors” beginning on page 47.
We made a number of assumptions to determine the price of our Class A Interests. If any of our assumptions are incorrect, including our assumptions regarding the total enterprise value of the Company, then the Class A Interests will be worth less than the price stated in this prospectus. In such case, the return on investment or rate of return on an investment in our Class A Interests could be significantly below an investor’s expectation.

We are an “emerging growth company” and a “smaller reporting company” under the federal securities laws, and, as such, are subject to reduced public company reporting requirements. See “Prospectus Summary —Implications of Being an Emerging Growth Company and a Smaller Reporting Company.”
Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Per Class A-1 Interest
Total
Number of shares sold
Initial public offering price
$ 250 $       
Subordinated loan(1)
$ 24,750 $       
Placement agent fees(2)
$ $       
Proceeds to us, before expenses
$ $       
Per Class A-2 Interest
Total
Number of shares sold
Initial public offering price
$ 2,500 $       
Subordinated loan(1)
$ 22,500 $       
Placement agent fees(2)
$ $       
Proceeds to us, before expenses
$ $       
Per Class A-3 Interest
Total
Number of shares sold
Initial public offering price
$ 5,000 $       
Subordinated loan(1)
$ 20,000 $       
Placement agent fees(2)
$ $       
Proceeds to us, before expenses
$ $       
Per Class A-4 Interest
Total
Number of shares sold
Initial public offering price
$ 25,000 $       
Subordinated loan(1)
$ 0 $       
Placement agent fees(2)
$ $       
Proceeds to us, before expenses
$ $       
(1)
Includes amount of Subordinated Loans attributable to each Class A Interest sold in this offering. Purchasers of Class A Interests will not be borrowers or lenders under the Subordinated Loans.
(2)
See “Plan of Distribution.”
The placement agents are deemed to be underwriters within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”), and any fees received by them will be deemed to be underwriting discounts or commissions under the Securities Act. See “Plan of Distribution.”
This offering will terminate upon the earlier to occur of (i) 30 days after the registration statement of which this prospectus forms a part becomes effective with the SEC or (ii) the date on which all Class A Interests offered hereby have been sold.
Loop Capital Markets
The date of this prospectus is            , 2025.

 
TABLE OF CONTENTS
iii
1
31
37
47
88
91
94
95
97
99
100
108
126
149
155
157
161
165
167
171
173
178
179
185
188
190
190
190
F-1
We have not, and the placement agents have not, authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus may only be used where it is legal to offer and sell our Class A Interests. The information in this prospectus is complete and accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of our Class A Interests. Our business, financial condition, results of operations and prospects may have changed since that date. We are not, and the placement agents are not, making an offer of these securities in any jurisdiction where the offer is not permitted.
This prospectus has been prepared by Bally’s Chicago, Inc. and may be used by our placement agents in connection with offers and sales of these securities in primary market transactions in these securities.
 
i

 
Neither we nor the placement agents have undertaken any efforts to qualify this offering for offers to investors in any jurisdiction outside of the states of Illinois, Florida, New York and Texas. Investors must have a U.S. social security number and/or a U.S. tax identification number to be eligible to participate in this offering.
 
ii

 
INDUSTRY AND MARKET DATA
This prospectus includes estimates regarding market and industry data. Unless otherwise indicated, information concerning our industry and the markets in which we operate, including our general expectations, market position, market opportunity and market size, are based on our management’s knowledge and experience in the markets in which we operate, together with currently available information obtained from various sources, including publicly available information, industry reports and publications, trade and business organizations, and other contacts in the markets in which we operate. Certain information is based on management estimates, which have been derived from third-party sources, as well as data from our internal research, and are based on certain assumptions that we believe to be reasonable.
In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets in which we operate. While we believe the estimated market and industry data included in this prospectus are generally reliable, such information, which is derived in part from management’s estimates and beliefs, is inherently uncertain and imprecise, and you are cautioned not to give undue weight to such estimates. Market and industry data are subject to change and may be limited by the availability of raw data, the voluntary nature of the data gathering process and other limitations inherent in any statistical survey of such data. In addition, projections, assumptions and estimates of the future performance of the markets in which we operate are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us. Accordingly, you are cautioned not to place undue reliance on such market and industry data or any other such estimates. The content of, or accessibility through, the sources and websites identified herein, except to the extent specifically set forth in this prospectus, does not constitute a portion of this prospectus and is not incorporated herein and any websites are an inactive textual reference only.
KEY PERFORMANCE INDICATORS
The key performance indicators used in managing our business is Income (loss) from operations for our Permanent Casino reportable segment and Adjusted EBITDAR, for our Temporary Casino reportable segment. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Operating Structure” for more information about our reportable segments. Temporary Casino Adjusted EBITDAR is defined as earnings, or loss, for the Temporary Casino before interest expense, net of interest income, provision (benefit) for income taxes, depreciation and amortization, non-operating (income) expense, expansion costs, management fees to Bally’s Corporation, rent expense from triple net operating leases, and certain other gains or losses.
We use Temporary Casino Adjusted EBITDAR to analyze the performance of our business and it is used as a determining factor for performance-based compensation for members of our management team. We use these measures when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items, within the Temporary Casino reportable segment, is necessary to provide a more fulsome understanding of our core operating results and as a means to evaluate period-to-period performance. Also, we present Temporary Casino Adjusted EBITDAR because it is used by regulators in reference to our Host Community Agreement, as well as some investors and creditors as indicators of the strength and performance of ongoing business operations, including our ability to service debt, and to fund capital expenditures and operations. This calculation is commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare operating performance and value companies within our industry. Temporary Casino Adjusted EBITDAR information is presented because management believes that it is commonly used measures of performance in the gaming industry and that it is considered by many to be key indicators of our operating results.
Temporary Casino Adjusted EBITDAR as used by us may not be defined in the same manner as other companies in our industry, and, as a result, may not be comparable to similarly titled financial measures of other companies. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Key Performance Indicators.”
 
iii

 
PROSPECTUS SUMMARY
The following summary highlights information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. You should read and carefully consider the following summary together with the entire prospectus, including our financial statements and the related notes thereto appearing elsewhere in this prospectus, before deciding to invest in our Class A Interests. Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements and Industry Data.” Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in “Risk Factors” and other sections of this prospectus.
Our Mission
Our mission is to design, build and operate a world-class entertainment destination resort, befitting Chicago’s status as a world-class city.
Our Company
We are a gaming, hospitality and entertainment company with the singular focus of building and operating a world-class entertainment destination resort in Chicago, Illinois. We intend to provide both Chicago residents and business and leisure travelers visiting Chicago with physical and interactive entertainment and gaming experiences.
We intend to build a destination casino, hotel and entertainment venue (our “permanent resort and casino”) that will showcase “The Best of Chicago” arts and culture, food and sports, and curated dining and entertainment experiences. Our permanent resort and casino in Chicago will be located on the 30-acre property which previously hosted the Chicago Tribune Publishing Center, at the intersection of Chicago Avenue and Halsted Street in downtown Chicago, and will look to transform this currently underutilized site into a major economic driver for the city. Our permanent resort and casino will be in close proximity to a wide range of hotels, theaters, bars, restaurants, major shopping districts and the McCormick Place Convention Center, the proximity to which will help drive traffic to our permanent resort and casino, primarily due to our differentiated gaming attractions in comparison to other offerings in this geographic location.
In developing the entertainment destination resort, we intend to adhere to Bally’s community-first policy, which is a fundamental and defining element of who we are as a company. We believe that in every community in which Bally’s operates, it has built strong, lasting partnerships with local residents and businesses. Chicago will be no different. With this project, we are committed to ensuring that our permanent resort and casino generates significant economic stimulus and creates a wealth of employment opportunities for the greater Chicago community.
Among other features and amenities, once finalized, our permanent resort and casino is being designed to include approximately:

3,400 slot machines;

173 table games;

10 food and beverage venues;

a hotel tower with 500 rooms and a rooftop bar;

a 3,000-person mixed use entertainment and event center;

3,300 parking spaces; and

outdoor green space, including an expansive public riverwalk with a water taxi stop.
On May 5, 2022, the City of Chicago selected us as the preferred bidder in Chicago’s request for proposal process (the “RFP process”) to construct and operate a world-class casino resort in downtown Chicago. We worked cooperatively with city officials and community leaders throughout the RFP process to
 
1

 
develop a project that embraced Chicago as a global gateway city, incorporating its vibrant cultural scene and highly diversified economy. Chicago selected us on the basis that they believe our plan provides the most economic value to Chicago and its taxpayers, including an upfront payment of $40.0 million and annual payments to the City totaling $4.0 million.
The gaming taxes on our gaming revenue will be paid to the state of Illinois and the City of Chicago, with the City of Chicago taxes applied to pay a portion of the City’s obligations toward its fire and police union pensions. Additionally, our permanent resort and casino is projected to create approximately 12,250 design, development and construction jobs and approximately 3,000 permanent jobs upon the opening of our permanent resort and casino.
Bally’s Corporation
Our ultimate parent, Bally’s Corporation, is a global gaming, hospitality and entertainment company with a portfolio of casinos and resorts and online gaming businesses. Bally’s Corporation provides its customers with physical and interactive entertainment and gaming experiences, including traditional casino offerings, iGaming, online bingo, sportsbook and free to play games (“F2P”).
As of September 30, 2024, Bally’s Corporation owns and manages 15 land-based casinos in ten states across the United States, one golf course in New York, and one horse racetrack in Colorado operating under Bally’s brand. Its land-based casino operations include approximately 14,800 slot machines, 500 table games and 3,800 hotel rooms, along with various restaurants, entertainment venues and other amenities. Certain of its properties are leased under a master lease agreement with GLP Capital, L.P. (“GLP”), a subsidiary of Gaming and Leisure Properties, Inc. (“GLPI”), a publicly traded gaming-focused real estate investment trust (“REIT”). With its acquisition of London-based Gamesys Group, Plc. (“Gamesys”) on October 1, 2021, Bally’s Corporation expanded its geographical and product footprints to include an iGaming business with well-known brands providing iCasino and online bingo experiences to its global online customer base with concentrations in Europe and a growing presence in North America. Bally’s Corporation’s iCasino and online bingo platforms and games content, sportsbook and F2P games are provided on a business-to-business (“B2B”) as well as a business-to-consumer (“B2C”) basis. Its revenues are primarily generated by these gaming and entertainment offerings. Bally’s Corporation owns and operates its proprietary software and technology stack designed to allow it to provide consumers with differentiated offerings and exclusive content.
In July 2024, Bally’s Corporation entered into a definitive merger agreement (as amended in August 2024 and further amended in September 2024), pursuant to which The Casino Queen & Entertainment Inc. (“Casino Queen”), a corporation majority-owned by funds managed by Standard General L.P., Bally’s Corporation’s largest common stockholder, will merge with Bally’s Corporation. Pursuant to the agreement, Bally’s stockholders will receive cash merger consideration of $18.25 per share, unless such stockholders elect the rollover election to forego the cash consideration in order to remain invested in the combined company. In connection with the foregoing transactions, Bally’s will combine with Casino Queen, a regional casino operator and owner of a significant minority stake in global lottery operator Intralot S.A. Bally’s stockholders approved the merger agreement on November 19, 2024. Closing of the transactions contemplated by the merger agreement is anticipated to occur in the first half of 2025 and remain subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions.
Our Location
We have leased a 30-acre property on the banks of the Chicago River, which previously hosted the Chicago Tribune Publishing Center. The proposed site for our permanent resort and casino is at the intersection of Chicago Avenue and Halsted Street in downtown Chicago, which we believe will be an optimal location for our permanent resort and casino. We will look to transform this currently underutilized site into a major economic driver for the city. The proposed site for our permanent resort and casino is also near major shopping and cultural attractions along Michigan Avenue, as well as a wide selection of hotels and restaurants at various price points and that are popular among local residents and tourists.
The proposed site is less than five minutes away from a major highway exit, making it easily accessible by car. We also intend to build a new water taxi stop and a new pedestrian bridge across the Chicago River
 
2

 
to make the proposed site even more accessible to Chicago residents and tourists in the downtown area. Our permanent resort and casino will be the only casino in the City of Chicago. The next closest casino is 16 miles outside of the city and not easily accessible via public transportation.
Once fully developed and operational, it will take a commuter approximately:

15 minutes on average to reach our permanent resort and casino from Chicago Loop via public transportation;

10 minutes on average to reach our permanent resort and casino from Magnificent Mile via public transportation;

45 minutes on average to reach our permanent resort and casino from Chicago O’Hare International Airport via public transportation; and

50 minutes on average to reach our permanent resort and casino from Midway Airport via public transportation.
In addition, our permanent resort and casino will have approximately 2,000 feet of contiguous river walk, public parks and docks. Additionally, it will include riverfront restaurants and other amenities, including locations for scenic views.
 
3

 
[MISSING IMAGE: mp_permresort-4clr.jpg]
For illustrative purposes, subject to change, see “Risk Factors — Development and Construction Risks”
Design & Construction
Demolition for construction of our permanent casino, performance center, resort, food and beverage offerings and hotel began on July 5, 2024, and our permanent resort and casino is expected to open to the public in September 2026. Our plan is to build in phases with demolition, site prep, parking and access to be followed by the construction of the permanent casino, performance center, and hotel tower, and would target that key elements of the project to be ready and prepared to serve patrons by the third quarter of 2026. However, there can be no assurances that we will be successful in doing so. Additionally, based upon our joint assessment with GLPI at the time that we entered into the GLP Term Sheet (as defined herein), we expect to incur expenses amounting to at least approximately $1.4 billion in the design, development and construction of our permanent resort and casino. However, this estimate is subject to change based on numerous factors outside of our control, which could cause the actual construction costs to increase. Any increased construction costs could materially and adversely affect the return on our investments. For additional discussion of these factors, please see “Risk Factors — Development and Construction Risks.
 
4

 
[MISSING IMAGE: pht_resort1-4c.jpg]
[MISSING IMAGE: pht_resort2-4c.jpg]
Permanent resort and casino renderings (November 2024)
Illustrative design, subject to change, see “Risk Factors — Development and Construction Risks”
In connection with the development and construction of our permanent resort and casino, we intend to contract or achieve:

46% or more of the funds earmarked for construction and development will be disbursed to businesses with a certification as Minority or women-owned businesses;

50% or more total hours spent on construction and development by City of Chicago residents;

LEED Gold certification from Green Building Council; and

125 points under the Chicago Sustainable Development Policy.
In addition, we are in discussion with the Illinois Gaming Board and Midway International Airport to install slot machines at Midway International Airport.
 
5

 
In November 2022, we entered into the Oak Street Lease Agreement (as defined herein) to lease the proposed site on which we plan to develop our permanent resort and casino. The Oak Street Lease Agreement commenced on November 18, 2022 and has a 99-year term. In connection with the Oak Street Lease Agreement, we recorded a long-term financing obligation (the “Financing Obligation”) of $200.0 million. All lease payments were recorded as interest expense and there is no reduction to the Financing Obligation over the term of the Oak Street Lease Agreement.
On July 11, 2024, Bally’s entered into a binding term sheet (the “GLP Term Sheet”) with GLP for a strategic construction and financing arrangement, including up to $940.0 million of funding for the construction of our permanent resort and casino. In connection therewith, GLP acquired the fee interest in the proposed site on which we plan to develop our permanent resort and casino from the Oak Street Landlord (as defined herein) and succeeded to the Oak Street Landlord’s interest as landlord under the Oak Street Lease Agreement. We and GLP are negotiating the GLP Lease Agreement (as defined herein) pursuant to which GLP will lease the site back to us, and the Oak Street Lease Agreement will be terminated. The GLP Lease Agreement will have a 15-year term followed by multiple renewal terms to be agreed between us and GLP. We expect to consummate the GLP Lease Agreement and terminate the Oak Street Lease Agreement in the first quarter of 2025.
Permanent Resort and Casino Run-Rate Performance
We expect our permanent resort and casino to open to the public in September 2026. Based on current design specifications and projected square footage, our planned permanent resort and casino is expected to feature, among other things, approximately 3,400 slot machines, 173 table games, 10 food and beverage (“F&B”) venues, a hotel tower with 500 rooms and a rooftop bar. This gaming, hospitality and F&B capacity has been strategically determined to optimize revenue potential and guest experience while aligning with anticipated market demand and regulatory requirements. The final number and mix of gaming, hospitality and F&B offerings may be subject to adjustment based on ongoing market analysis, regulatory approvals, and construction developments. See “Risk Factors — Business Operational Risks — Actual operating results may differ significantly from our hypothetical examples.”
For illustrative purposes only, the table below reflects an example of hypothetical outcomes based on various Win Per Unit Per Day (“WPUPD”), which is the average revenue a single gaming unit generates daily, and Adjusted Gross Revenue (“AGR”), which is the WPUPD on an annualized basis, scenarios based on the anticipated 3,400 slot machines, 173 table games, 10 food and beverage venues, a hotel tower with 500 rooms and a rooftop bar we currently expect to feature in our permanent resort and casino. Changes in the number of slot machines and table games would have a corresponding impact on the illustration set forth below. For comparative context, we have included WPUPD and AGR data, slot machine counts, and table game counts as of and for the year ended December 31, 2023 for select gaming properties. This information has been derived from public filings of the respective casino operators. The properties included are the MGM National Harbor Casino and Encore Boston Harbor Casino, which are casino resorts in a campus environment that operate in or near similar major metropolitan areas, as well as Hard Rock Northern Indiana Casino, Rivers Casino, Ameristar East Chicago, Grand Victoria Casino, Harrah’s Joliet Casino & Hotel, Hollywood Casino Aurora, Hollywood Casino Joliet, and Horseshoe Hammond, which are casinos located near the Chicago metropolitan area and in Northern Indiana. We have identified these properties as potentially comparable to our proposed permanent resort and casino based on certain factors, including location in metropolitan areas with similar demographic profiles, comparable economic characteristics of the surrounding regions, and proximity to the City of Chicago. Investors should be aware that these comparisons have limitations and may not be directly applicable to our proposed operations due to various factors, including but not limited to differences in local market conditions, variations in regulatory environments, property-specific operational strategies, and unique competitive landscapes in each market. The information provided is intended solely to offer context and does not constitute a projection or forecast of our future performance. Actual results may differ materially from the hypothetical scenarios presented.
 
6

 
($ in MM)
Scenario
#1
Scenario
#2
Scenario
#3
Scenario
#4
Slot Machines
3,400 3,400 3,400 3,400
Slots WPUPD
$ 350 $ 400 $ 450 $ 500
Slots AGR
$ 434 $ 496 $ 558 $ 621
Table Games
173 173 173 173
Table Games WPUPD
$ 3,500 $ 4,000 $ 4,500 $ 4,500
Table Games AGR
$ 221 $ 253 $ 284 $ 284
Gaming AGR
$ 655 $ 749 $ 843 $ 905
Hotel ADR
250 300 350 400
Rooms
500 500 500 500
Occupancy
65.0% 70.0% 75.0% 80.0%
Hotel Room Revenue
$ 30 $ 38 $ 48 $ 58
AGR Pull-through(1)
$ 47 $ 51 $ 55 $ 58
Hospitality AGR
$ 77 $ 89 $ 103 $ 117
Percentage of Gaming AGR
12.5% 15.0% 17.5% 20.0%
F&B AGR
$ 82 $ 112 $ 147 $ 181
Total AGR
$ 814 $ 951 $ 1,093 $ 1,202
(1)
AGR pull-through is the average additional revenue generated per occupied room daily.
Comparable Properties for 2023(2)
($ in MM)
MGM
National
Harbor
Encore
Boston
Hard Rock
Northern
Indiana
Rivers
Casino
Illinois
Slot Machines
2,265 2,550 1,743 1,516
WPUPD
$ 589 $ 448 $ 486 $ 598
Table Games
209 191 76 120
WPUPD
$ 4,572 $ 4,848 $ 4,202 $ 4,744
Total Gaming AGR
$ 834 $ 755 $ 426 $ 539
Illinois and Northern Indiana Slots
2023(2)
# Slots
Admissions
AGR
WPU
Ameristar East Chicago
1,162 N/A $ 154 $ 362
Grand Victoria Casino
762 943 $ 119 $ 427
Hard Rock Northern Indiana
1,743
N/A
$
309
$
486
Harrah’s Joliet Casino & Hotel
777 738 $ 113 $ 400
Hollywood Casino Aurora
832 852 $ 77 $ 255
Hollywood Casino Joliet
937 683 $ 80 $ 233
Horseshoe Hammond
1,688 N/A $ 235 $ 381
Rivers Casino Des Plaines
1,516
3,088
$
331
$
598
Average 1,177 1,261 $ 177 $ 393
Median 1,050 852 $ 136 $ 390
Top Performers – Averages
 
7

 
2023(2)
# Slots
Admissions
AGR
WPU
Top Performer Average
1,705
2,230
$
316
$
519
Illinois and Northern Indiana Table Games
2023(2)
# Tables
Admissions
AGR
WPU
Ameristar East Chicago
44 N/A $ 35 $ 2,168
Grand Victoria Casino
45 943 $ 31 $ 1,896
Hard Rock Northern Indiana
76
N/A
$
117
$
4,202
Harrah’s Joliet Casino & Hotel
21 738 $ 18 $ 2,344
Hollywood Casino Aurora
34 852 $ 20 $ 1,616
Hollywood Casino Joliet
13 683 $ 12 $ 2,367
Horseshoe Hammond
81 N/A $ 68 $ 2,289
Rivers Casino Des Plaines
120
3,088
$
208
$
4,744
Average 54 1,261 $ 64 $ 2,703
Median 45 852 $ 33 $ 2,316
Top Performers – Averages
Top Performer Average
93
2,230
$
144
$
4,365
(2)
Based on publicly available information. All figures are as of and for the year ended December 31, 2023.
These illustrative comparisons are only for purposes of illustrating the publicly reported WPUPD per slot machine and table game, and the associated AGR for nearby casino properties in Illinois and Northern Indiana. These illustrative comparisons are not projections, goals or targets but reflect the actual reported results of these casino properties as reported by the Illinois and Indiana state gaming commissions for the relevant periods.
The illustrative comparisons set forth above were not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information. Such illustrative examples have been prepared by, and is the responsibility of, our management. Neither the Company’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the illustrative example information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.
This prospectus does not include a reconciliation of estimated Total AGR to estimated GAAP revenue because we are unable, without making unreasonable efforts, to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items which could be significant to our results.
Hospitality Industry in Chicago
The hospitality industry in Chicago is showing strong signs of recovery and growth, driven by a combination of increasing tourism, business travel and a dynamic local culture. Occupancy rates are steadily climbing as travelers return to the city for its world-class dining, vibrant arts scene and high-profile events like conventions and festivals. Hotels are adapting to evolving guest expectations by modernizing amenities, prioritizing sustainability, and enhancing the overall guest experience. The city’s strong marketing efforts and investment in infrastructure, such as O’Hare’s expansion, have also boosted its appeal as a global destination. With these improvements, Chicago’s hospitality sector has positioned itself as a leader in urban tourism and accommodation.
 
8

 
In 2023, the Chicago hospitality industry exceeded the expectations, booking over 2,100 future meetings and events, representing 2.45 million hotel room nights, which exceeded 2022 levels by 43%. This was driven primarily by a steady influx of visitors exploring Chicago’s vibrant neighborhoods, iconic landmarks and world-class cultural offerings. The City saw 52 million visitors — over 3 million more than 2022 — and filled 11 million hotel rooms.
2023 Hotel Occupancy Rates
[MISSING IMAGE: tb_hottelaccu-bwlr.jpg]
2023 Hotel Rooms Occupied (Millions)
[MISSING IMAGE: tb_hottelrooms-bwlr.jpg]
2023 Hotel Revenue and Taxes
[MISSING IMAGE: tb_hottelrevenue-bwlr.jpg]
Temporary Casino
While we work to construct our permanent resort and casino on the banks of the Chicago River, we built a temporary casino in downtown Chicago (our “temporary casino” and, together with our permanent resort and casino, our “resort and casino”). However, as the name implies, our temporary casino is expected to close once we open our Permanent Casino, as our license to operate our temporary casino would cease in order to open our permanent resort and casino in the third quarter of 2026.
Our temporary casino is situated in the former location of the Medinah Temple, which acted as a community and social center in Chicago from its construction in 1912. Our temporary casino began operations on September 9, 2023. Our temporary casino includes approximately 1,000 gaming positions and two food and beverage venues.
 
9

 
[MISSING IMAGE: mp_ballysmedihah-4c.jpg]
Our new work for our temporary casino respects and maintains the existing landmarked items identified by the City of Chicago in the Medinah Temple, including the exterior façade. While we performed minor improvements on the façade, such work was focused on the replacement of signage in the same locations utilized by previous tenants. Within the Medinah Temple, we preserved the stained glass windows, stage proscenium, column capitals and third floor ceiling, including the four domes. As of September 30, 2024, we have incurred approximately $70.0 million in costs in connection with the design and development of our temporary casino.
Timeline of Key Milestones(1)
Date
Key Milestone
September 9, 2023
Grand opening of our temporary casino
July 5, 2024
Tribune surrenders and vacates proposed site of our permanent resort and casino
July 5, 2024
Decommission and demolition of building on site of our permanent resort and casino
Q1 2025
Commencement of construction of our permanent resort and casino
Q3 2026
Grand opening of our permanent resort and casino(2)
(1)
This timeline reflects our current business strategy. However, our ability to implement our business strategy is subject to numerous risks and uncertainties. We face many risks inherent in our business generally. You should carefully consider all of the information set forth in this prospectus and, in particular, the information under the heading “Risk Factors.” These risks include various construction and development risks in connection with our permanent resort and casino. See “Risk Factors — Development and Construction Risks.”
(2)
The Host Community Agreement with the City of Chicago provides for significant liquidated damages in the event that we do not meet the milestones specified as to our temporary casino and our permanent resort and casino. See “— Our Relationship with Chicago — Host Community Agreement with the City of Chicago” for more information on these milestones. Also see “Risk
 
10

 
Factors — Development and Construction Risks” for more information on various construction and development risks in connection with our permanent resort and casino.
Competitive Strengths
Fully integrated destination resort focused on the attractive mainstream market segment
Our permanent resort and casino is focused on the mainstream market segment. We believe this segment provides attractive long-term growth opportunities and the mainstream market gaming segment has relatively high margins in comparison to other gaming segments.
Our permanent resort and casino is being designed to feature a hotel tower including 500 rooms and a rooftop bar. Our dining and beverage options are also designed for broad market appeal and include a range of restaurants, cafes, bars and lounges. Our location, in the heart of the City of Chicago, offers an immersive entertainment environment in street and riverscape surroundings inspired by iconic shopping in the Magnificent Mile district. Our permanent resort and casino will also feature a new landscaped riverwalk with activation elements such as artwork, walking paths and a dog park. It will also include a new park along the river, terraced steps and outdoor seating for restaurants, cafes, bars and lounges. The park will be accessible to the public during the hours typical of Chicago public parks. We believe that our combination of entertainment and leisure activities, differentiated gaming attractions in comparison to other offerings in this geographic location and outdoor space, including being the only casino in the City of Chicago, delivered in an easily accessible location, will provide a customer experience that is hard to replicate without having to visit multiple destinations.
Strategic location with strong and improving accessibility
The following map illustrates the centralized location of our permanent resort and casino in Chicago:
[MISSING IMAGE: mp_permanresort-4clr.jpg]
Our permanent resort and casino will be strategically located in the heart of the City of Chicago, as the only casino located directly adjacent to the Chicago River, with easy access to the blue transit line as well as
 
11

 
to multiple bus stops. The City of Chicago is the third most populous city in the United States, with 2.7 million residents in 2023 according to the United States Census Bureau. According to Forbes and Business Insider, tourism to the City of Chicago reached approximately 55 million visitors prior to the COVID-19 pandemic and is expected to fully rebound by the end of 2024.
We believe we can also leverage the traffic flow from nearby hotels, theaters, bars, restaurants, shopping districts and McCormick Place Convention Center to drive significant traffic to our permanent resort and casino, primarily due to our differentiated gaming and entertainment attractions in comparison to other offerings in this geographic location. Our close proximity to the Chicago River, which is a top tourist attraction in Chicago, will allow us to drive marketing promotions to tourists and drive further traffic to our permanent resort and casino. We intend to build a new water taxi stop and a new pedestrian bridge across the Chicago River to capitalize on traffic flow and make the proposed site even more accessible to Chicago residents and tourists in the downtown area. We also expect to be a natural and popular first stop for a large number of visitors to Chicago due to our close proximity to the River West, Fulton River District, River North and West Loop entertainment districts.
Backed by an established operator with a leading and diversified national gaming footprint
We are backed by Bally’s Corporation, an established operator in our resort and casino industry that is capable of providing expertise, know-how and support across the entire gaming spectrum, ranging from generation and advertising technology to the collection, processing and extrapolation of data and odds, to visualization solutions, risk management and platform services.
The deep understanding of our public company parent of the gaming industry, customer needs and preferences, regulatory processes and the evolving competitive landscape offers us a significant competitive advantage over our competitors. Upon the closing of this offering, we will continue to benefit from our relationship with Bally’s Corporation through the scale of Bally’s operations, including the centralization of shared services and support functions such as legal, information technology, human resources, supply chain logistics, warehousing, strategic sourcing and transportation. We will also continue to benefit from Bally’s Corporation’s extensive customer and sales network, as well as its well-developed and recognized customer loyalty programs, which we will continue to leverage to further drive visitation.
After its contemplated merger with Casino Queen, Bally’s Corporation’s casino offerings will stretch across eleven states across the United States. We believe the breadth of their offerings and reach gives us a competitive advantage in launching operations in a new city or state, as we are able to leverage their considerable resources and know-how to deliver the best offerings to potential customers.
Powerful network effects accelerate our value proposition
Under the Bally’s brand, we are able to benefit from powerful network effects, which further accelerate our value proposition. As a national participant in the gaming industry, Bally’s Corporation has casinos resorts spread across numerous major cities and has hosted tens of millions of customers since all of its casino resorts and online gaming operations commenced operations. We believe that, by operating under the Bally’s brand, we will be able to attract existing and new customers to our new resort and casino, as we will not be required to gain their trust upon launching our operation.
Experienced and Dedicated Management Team
Our management team has extensive experience in the gaming and hospitality industries. Management team members have prior tenures at other large-scale casino and entertainment companies, such as PENN Entertainment, Delaware North Companies, International Game Technology and Northstar Lottery Group. Our management team has an average of more than 11 years of experience in the gaming and hospitality industries. In addition, as of September 30, 2024, Bally’s had approximately 10,500 employees who are dedicated to Bally’s national and international operations to ensure exceptional customer experiences. We will also receive certain centralized corporate and management services from Bally’s Corporation, including shared service staff who will devote a portion of their time to our operations. We intend to continue to capitalize on the deep industry expertise, management skills and strong execution capabilities of our
 
12

 
management team to successfully formulate and implement our strategies, and continue to streamline our operations by utilizing the services provided by our affiliates.
Our Business and Growth Strategies
Continue to focus on the mainstream market segment
We intend to focus on mainstream market gaming due to its attractive growth opportunities and higher margin profile. We are designing our non-gaming attractions to complement the mainstream market focus of our permanent resort and casino by delivering experiences that appeal to mainstream market players. We aim to leverage our differentiated entertainment, retail, food and beverage and hotel amenities to drive visitation, longer stays and greater spending by our patrons. Under our current plan, our permanent resort and casino is being designed to include approximately 3,400 slot machines and 173 table games. In addition, we currently envision outdoor green space, including an expansive public riverwalk with a water taxi stop. Other non-gaming attractions expected to be part of our permanent resort and casino include a hotel tower with 500 rooms, a rooftop bar, a 3,000-person mixed use entertainment and event center, as well as retail and food and beverage outlets. We expect our current plan for our permanent resort and casino to diversify our offerings and create long-term shareholder value.
Continue to drive visitation and revenue growth through innovative non-gaming attractions
We intend to enhance and diversify our differentiated non-gaming amenities and service offerings with the goal to drive further visitation to our resort and casino by both residents of Chicago and tourists visiting Chicago, and deliver long-term growth and high margins. We believe our permanent resort and casino will be different from existing resorts and casinos in Illinois and neighboring states because of our strategic location along the Chicago River, as well as our innovative and interactive entertainment attractions, which are intended to appeal to both individuals and groups interested in gaming and those not interested in gaming alike. We intend to leverage Bally’s Corporation’s existing attractions to provide superior entertainment experiences. For example, we intend to host premier concerts and events over time to increase our brand recognition locally, which we believe we can do using our nationwide access to premier talent. We also intend to enhance existing attractions and update them over time, and to optimize our mix of retail and food and beverage offerings that appeal to our target customers.
Continue to pursue strategic marketing initiatives and differentiate the “Bally’s” brand
We plan to continue to build the “Bally’s” brand to increase awareness among potential customers, particularly in Chicago and the Midwest. We intend to continue to pursue innovative promotions, including engaging influencers and celebrities to promote our resort and casino’s themes and entertainment facilities, and to host special events. We also plan to enhance our advertising activities, including through a variety of social media, print, television, online, outdoor, onsite and other means. In addition, we intend to leverage our relationship with Bally’s Corporation to promote our resort and casino through complementary and cost-effective cross-marketing and sales campaigns.
Prudently manage our capital structure
We commenced operations in June 2022, and we intend to develop a capital structure to match and support the on-going ramp-up of our operations. We intend to strengthen our balance sheet by focusing on optimizing our leverage, maintaining a competitive cost of capital and improving balance sheet flexibility. We intend to use all of the net proceeds from this offering, together with the proceeds from the concurrent private placements, the Subordinated Loans and the IPO Expenses Note (as defined herein), to purchase 10,000 LLC Interests directly from Bally’s Chicago OpCo at a price per unit equal to the stated value of $25,000 per Class A Interest, which is equal to the amount paid by investors in this offering plus the corresponding amount of Subordinated Loans attributable to each Class A Interest.
Bally’s Chicago OpCo intends to use the proceeds it receives from the sale of LLC Interests to Bally’s Chicago, Inc. to repay $250.0 million outstanding aggregate amount under the Pre-IPO Intercompany Notes.
 
13

 
In turn, we believe we will be sufficiently capitalized through the fourth quarter of 2027. We intend to prudently manage our capital structure as we continue to grow our operations.
Our Relationship with Bally’s Corporation
Permanent Services Agreement
We intend to benefit from Bally’s Corporation’s significant experience and knowledge in the U.S. gaming market. In January 2023, Bally’s Chicago OpCo and certain subsidiaries of Bally’s Corporation entered into a services agreement (the “Permanent Services Agreement”) with Bally’s Management Group, LLC (f/k/a Twin River Management Group, Inc.) (“BMG”), a subsidiary of Bally’s Corporation. Pursuant to the Permanent Services Agreement, BMG agreed to provide us and certain subsidiaries of Bally’s Corporation with general business support services, including services relating to external reporting obligations, internal audit, regulatory filings, design and construction, business development, human resources, tax, accounting, treasury and capital related, risk management, legal, finance and marketing upon the opening of our permanent resort and casino. Pursuant to the Permanent Services Agreement, we agreed to pay BMG an annual fee equal to the salaries, burden, overhead and other operating costs for providing such services based on our share of those costs calculated by reference to an appropriate common-size metric plus 6%, which fee may be reviewed and adjusted by the parties from time to time to reflect current market rates for such services and as required by the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The initial term of the agreement is one year, beginning upon the opening of our permanent resort and casino, and will be automatically renewed for successive one-year terms, unless either party serves on the other a written notice of termination. We believe the support provided by Bally’s Corporation increases our competitive advantage and will contribute to the success of our business. See “Transactions with Related Persons — Permanent Services Agreement.
Temporary Services Agreement
In August 2023, Bally’s Chicago OpCo entered into a services agreement (the “Temporary Services Agreement”) with BMG, a subsidiary of Bally’s Corporation. Pursuant to the Temporary Services Agreement, BMG agreed to provide us with general business support services, including services relating to external reporting obligations, internal audit, regulatory filings, design and construction, business development, human resources, tax, accounting, treasury and capital related, risk management, legal, finance and marketing related to our temporary casino. Pursuant to the Temporary Services Agreement, we agreed to pay BMG a monthly fee equal to $5.0 million, which fee may be reviewed and adjusted by the parties from time to time to reflect current market rates for such services and as required by the Code. The initial term of the agreement is two years, beginning August 30, 2023, and will be automatically renewed for successive one-year terms for as long as our temporary casino is licensed to continue operations, unless BMG serves on Bally’s Chicago OpCo a written notice of termination. The Temporary Services Agreement shall automatically terminate when our temporary casino permanently closes and our permanent resort and casino opens to the public. See “Transactions with Related Persons — Temporary Services Agreement.
Guarantee of Bally’s Corporation’s Indebtedness
We and Bally’s Chicago HoldCo, our direct parent and the entity that will hold all of our Class B Interests after the closing of this offering, as well as all other current and future direct unrestricted subsidiaries of Bally’s Corporation under its credit facilities and bond indentures, will guarantee Bally’s Chicago OpCo’s obligations under the GLP Lease Agreement and GLP Development Agreement; provided, however, that at such time as Bally’s Chicago OpCo becomes a restricted subsidiary under Bally’s Corporation’s credit facilities and bond indentures, (i) Bally’s Corporation (or its Parent Company (as defined in Bally’s Corporation’s existing master lease agreement with GLP), if any, following a Control Transaction (as defined in the GLP Term Sheet)) will be required to guarantee the GLP Lease Agreement and GLP Development Agreement and (ii) following the delivery of such guarantee, the guarantees of the GLP Lease Agreement and GLP Development Agreement provided by Bally’s Chicago HoldCo and such other unrestricted subsidiaries of Bally’s Corporation shall terminate.
In connection with Bally’s Chicago HoldCo’s commitment to guarantee the GLP Lease Agreement and GLP Development Agreement, and in partial consideration for certain investments by Bally’s Corporation
 
14

 
and its subsidiaries into Bally’s Chicago OpCo, we and Bally’s Chicago OpCo intend to guarantee all of Bally’s Corporation’s indebtedness upon Bally’s Corporation’s (or its Parent Company’s (as defined in Bally’s Corporation’s existing master lease agreement with GLP), if any, following a Control Transaction (as defined in the GLP Term Sheet)) guaranteeing the GLP Lease Agreement and the GLP Development Agreement or upon request from Bally’s Corporation; provided that, at any time after such guarantee by Bally’s Corporation (or its Parent Company) or such request from Bally’s Corporation, upon request of Bally’s Chicago OpCo, Bally’s Corporation will guarantee Bally’s Chicago OpCo’s obligations under any lease obligations outstanding at such time, including any obligations under the Oak Street Lease Agreement or, if entered into, the GLP Lease Agreement and the GLP Development Agreement, to the maximum extent permitted under the instruments governing Bally’s Corporation’s indebtedness (assuming full borrowing of all outstanding commitments under Bally’s Corporation’s revolving credit facilities outstanding at such time). Furthermore, we and Bally’s Chicago OpCo intend to enter into an agreement (the “Guarantee Agreement”) with Bally’s Corporation, pursuant to which, at any time in the future, upon request from Bally’s Corporation, we and Bally’s Chicago OpCo will guarantee, and cause each of our wholly-owned subsidiaries to guarantee, any additional indebtedness that Bally’s Corporation enters into at any time in the future. See “Transactions with Related Persons — Guarantee of Bally’s Corporation’s Indebtedness.
Stockholders Agreement
In connection with this offering and the Transactions, we and Bally’s Chicago HoldCo intend to enter into a stockholders agreement (the “Stockholders Agreement”), pursuant to which for so long as Bally’s Chicago HoldCo beneficially owns at least 50% of the aggregate number of our stock outstanding, certain actions by us or any of our subsidiaries, including Bally’s Chicago OpCo, will require the prior written consent of Bally’s Chicago HoldCo. The actions that will require prior written consent include: (i) change in control transactions of our company or any of our subsidiaries, including Bally’s Chicago OpCo, (ii) acquiring or disposing of assets or any business enterprise or division thereof for consideration in excess of $50.0 million in any single transaction or series of transactions, (iii) increasing or decreasing the size of our board of directors, (iv) initiating any liquidation, dissolution, bankruptcy, or other insolvency proceeding involving us or any of our subsidiaries, including Bally’s Chicago OpCo, and (v) any transfer, issue, sale, or disposition by us of any shares of stock, other equity securities, equity-linked securities, or securities that are convertible into equity securities of us or our subsidiaries to any person or entity that is a non-strategic financial investor in a private placement transaction or series of transactions.
Support Letter
In March, 2024, we obtained a letter of support from Bally’s Corporation, pursuant to which Bally’s Corporation commits to fund all of our operating, investing, and financing activities through at least December 31, 2025 and further commits not to make any decision or action that would reasonably be expected to negatively affect our ability to continue as a going concern through at least December 31, 2025.
Our Relationship with Chicago
We are designing, developing and constructing a world-class entertainment destination resort in partnership with the City of Chicago. In connection with this partnership, we have entered into various agreements and development programs as set forth below.
Host Community Agreement with the City of Chicago
On June 9, 2022, we signed a host community agreement with the City of Chicago to develop our destination resort and casino in downtown Chicago (the “Host Community Agreement”). The Host Community Agreement provides us with the exclusive right to operate a permanent casino and a temporary casino for up to three years while our permanent resort and casino is constructed.
Pursuant to the Host Community Agreement, our permanent resort and casino is being designed to feature:

approximately 150 permanent gaming tables, including 20 poker tables;

in-person and mobile sports wagering facilities;
 
15

 

a 5-star quality high-end luxury hotel with 100 rooms initially, as well as amenities such as a rooftop bar, a fitness center, subject to expansion to up to 500 rooms within approximately five years of the opening of our permanent resort and casino;

approximately 65,000 square feet of entertainment and event space, including a flexible theater space with approximately 2.4 acres of greenspace that can be used to host outdoor events;

six restaurants/cafes and a food hall, including a three-meal diner with capacity for approximately 150 seats, a Bally’s Sports Bar with capacity for approximately 200 seats, a food hall with capacity for approximately 175 seats, an Asian restaurant with capacity for approximately 50 seats, a steakhouse with capacity for approximately 150 seats, an Italian restaurant with capacity for approximately 200 seats and a grab-and-go coffee bar with capacity for approximately 20 seats;

four bars and lounges, including a casino bar, a cocktail lounge with capacity for over 50 seats, a VIP lounge with capacity for over 60 seats and a rooftop bar with capacity for over 100 seats (including two hidden speakeasies that patrons can visit);

approximately 3,000 square feet of ancillary retail space, including sundries and souvenir shops;

a garage or parking facility with approximately 3,300 parking spaces, including approximately 2,200 patron spaces, approximately 600 employee spaces and approximately 500 valet spaces;

a visitor center for tourists and business travelers visiting Chicago, including a concierge service operated in coordination with Choose Chicago, a nonprofit organization that specializes in Chicago travel options; and

an approximately 23,000 square foot museum, with exhibits presenting Chicago sports and history and other rotating exhibitions.
In furtherance of these obligations, the Host Community Agreement establishes a minimum capital investment of $1.34 billion on the design, construction and equipping of our temporary casino and our permanent resort and casino. As of September 30, 2024, approximately $1.10 billion of this commitment remains. The actual cost of the development may exceed this minimum capital investment amount. In addition, land acquisition costs and financing costs, among other types of costs, are not counted toward meeting this minimum capital investment amount.
Additionally, as part of the design, development and construction of our temporary casino and our permanent resort and casino, the Host Community Agreement requires us to employ approximately:

2,900 individuals in the construction of our temporary casino;

3,000 individuals in the construction of our permanent resort and casino; and

2,500 individuals in the construction of the hotel tower.
Once operational, the Host Community Agreement requires us to employ:

approximately 550 individuals in our temporary casino; and

approximately 3,000 individuals in our permanent resort and casino.
In connection with the entry into the Host Community Agreement with the City of Chicago, we were required to make a one-time payment to the City of Chicago equal to $40.0 million, and are required to make ongoing payments of $4.0 million per year beginning on September 9, 2023, the date that our temporary casino opened to the general public. Additionally, in connection with the Host Community Agreement, Bally’s Corporation was required to provide the City of Chicago with a guaranty whereby the Company is required to have and maintain available financial resources in an amount reasonably sufficient to fund all amounts necessary to allow us to meet our obligations under the Host Community Agreement and, to the extent we fail to perform any obligations thereunder, assume full responsibility for and perform our obligations in accordance with the terms, covenants and conditions set forth in the Host Community Agreement. The guaranty also required that we indemnify and hold the City of Chicago harmless from and against any and all loss, cost, damage, injury, liability, claim or reasonable and documented expense the City of Chicago may suffer or incur by reason of any nonpayment or nonperformance of any of our obligations.
 
16

 
Our Host Community Agreement with the City of Chicago requires that 25% of Bally’s Chicago OpCo’s equity must be owned by persons that have satisfied the Class A Qualification Criteria. The Class A Qualification Criteria include, among other criteria, that the person:

if an individual, must be a woman;

if an individual, must be a Minority, as defined by MCC 2-92-670(n) (see below); or

if an entity, must be controlled by women or Minorities.
MCC 2-92-670(n), in turn, defines Minority as:

any individual in the following racial or ethnic groups:

African-Americans or Blacks (including persons having origins in any of the Black racial groups of Africa);

American Indians (including persons having origins in any of the original peoples of North and South America (including Central America) and who maintain tribal affiliation or community attachment);

Asian-Americans (including persons whose origins are in any of the original peoples of the Far East, Southeast Asia, the islands of the Pacific or the Northern Marianas or the Indian Subcontinent);

Hispanics (including persons of Spanish culture with origins in Mexico, South or Central America or the Caribbean Islands, regardless of race); and

individual members of other groups, including but not limited to Arab-Americans, found by the City of Chicago to be socially disadvantaged by having suffered racial or ethnic prejudice or cultural bias within American society, without regard to individual qualities, resulting in decreased opportunities to compete in Chicago area markets or to do business with the City of Chicago. Qualification under this clause is determined on a case-by-case basis and there is no exhaustive or definitive list of groups or individuals that the City of Chicago has determined to qualify as Minority under this clause. However, in the event the City of Chicago identifies any additional groups or individuals as falling under this clause in the future, members of such groups would satisfy the Class A Qualification Criteria.
If there are any changes to the groups included in MCC 2-92-670(n), and consequently to the Class A Qualification Criteria, prior to the closing of this offering, we will communicate such changes by filing an amendment to this prospectus with the SEC.
In addition, the Host Community Agreement requires that 40% of seats on our board of directors (our “Board”) be reserved for Minorities or women.
The Host Community Agreement provides that in the event that 75% of the gaming area of our permanent resort and casino is not open to the general public by September 10, 2026 (the “Completion Deadline”), subject to any extensions as a result of Force Majeure Periods (as defined in the Host Community Agreement), we must pay the City of Chicago an amount, calculated on a daily basis, equal to the product of (i) 85% of the projected local tax revenue multiplied by (ii) the number of days since the Completion Deadline, until 75% of the gaming area of our permanent resort and casino opens to the general public; provided that any local tax revenue actually received for such period shall not subtracted from any amounts due to the City of Chicago.
In addition, the Host Community Agreement also provides that in the event that 90%, taken as a whole, of our permanent resort and casino is not completed (as evidenced by the issuance of a temporary certificate of occupancy by the City of Chicago’s Department of Buildings) by the Completion Deadline, subject to any extensions as a result of Force Majeure Periods (as defined in the Host Community Agreement), we must pay the City of Chicago an amount, calculated on a daily basis, equal to the product of (i) 10% of the projected local tax revenue multiplied by (ii) the number of days since the Completion Deadline, until 90%, taken as a whole, of our permanent resort and casino is completed (as evidenced by the issuance of a temporary certificate of occupancy by the City of Chicago’s Department of Buildings).
 
17

 
If we show we timely commenced and have been diligently pursuing the construction of our permanent resort and casino, the City of Chicago may consent up to two three-month extensions of the Completion Deadline, followed by one two-month extension of the Completion Deadline, for a possible total extension of eight months. The first extension shall be consented to automatically by the City of Chicago and any subsequent consent shall not be unreasonably withheld, conditioned or delayed.
Gaming License
In order to operate our resort and casino, we will be required to obtain and hold licenses issued by the Illinois Gaming Board. The Host Community Agreement provides us with the exclusive recommendation for licensing to the Illinois Gaming Board for the City of Chicago casino license. On October 26, 2023, we obtained a four-year owners license from the Illinois Gaming Board. This license will expire on October 25, 2027 and may be renewed for subsequent four-year terms. The license issued to casino operators is referred to as an “owners license” and is issued by the Illinois Gaming Board for a period of up to four years. The owners license may then be renewed for subsequent four-year terms. On October 26, 2023, the Illinois Gaming Board also approved extending the operation of our temporary casino until September 9, 2026. The fee for the issuance or renewal of the owners license is $250,000. The license obligates the recipient to adhere to the standards and requirements set forth in the Illinois Gaming Act and the Illinois Gaming Board Rules. The Illinois Gaming Board has the authority to limit the term of the license at issuance or any renewal and may dictate additional restrictions upon the license.
Community Investment Program
We have agreed with the City of Chicago that we will commit to hiring residents of Chicago with various workforce development organizations in both the construction of our temporary casino and our permanent resort and casino, but also with respect to employment once our casinos are operational.
We are committed to the following hiring targets:

we are required to provide preference to Chicago-based businesses, if possible;

in the hiring of contractors for the construction of our temporary casino and our permanent resort and casino:

a minimum of 36% of funds need to go towards Minority-owned businesses;

a minimum of 10% of funds need to go towards women-owned businesses;

in the hiring of workers to build our temporary casino and our permanent resort and casino:

a minimum of 50% of total hours on our permanent resort and casino must be performed by Chicago residents;

a minimum of 15.5% of construction work must be performed by residents of socially and economically disadvantaged areas;

in the sourcing of goods and services and other vendor spending in connection with our temporary casino and our permanent resort and casino:

a minimum of 26% of funds need to go towards Minority-owned businesses;

a minimum of 10% of funds need to go towards women-owned businesses;

a minimum of 2% of funds need to go towards disadvantaged businesses, including businesses by owners that have historically been disadvantaged; and

a minimum of 3% of funds need to go towards veteran- or service-disabled veteran-owned businesses;

a target goal of 60% Minority hiring in the operation of our casino.
Under the community investment program, we intend on reducing the disparities that exist in the initial procurement process of goods and services by requiring that all contracts and bids in excess of $10,000 be issued via a competitive bidding process. Additionally, we intend to list all employment and procurement
 
18

 
opportunities on our website. We intend on hosting an annual diversity vendor fair on the premises of our permanent resort and casino, and intend on hiring a third-party diversity, equity and inclusion expert in sourcing and contracting vendors to leverage their network of vendors, suppliers and individuals seeking jobs to push notifications, recruit bidders and support us in the process.
We have also agreed with the City of Chicago that we will commit to providing training opportunities for various roles in our resort and casino, including for table game dealers and food and beverage workers, and work to set up job fairs in order to attract potential applicants to employment opportunities in our resort and casino.
Our Community First Programs
As a member of the Bally’s organization, we intend to adhere to the Bally’s community-first policy, which is a fundamental and defining element of who we are as a company. We intend to build strong, lasting partnerships with local residents and businesses in Chicago.
As part of our community-first policy, we intend to implement programs to provide individuals with gaming addiction with support services, both offsite and onsite, including treatment of compulsive behavior disorders. We also intend to take extraordinary precautions to ensure that minors are prohibited from participating in any of the gaming activities at our resort and casino. Additionally, we intend to take precautions to ensure that our marketing practices do not disproportionately target disadvantaged communities, and will work to provide best-in-class social programs geared towards addressing gambling addiction throughout the Chicago area.
Corporate Structure
The below depicts our organizational structure upon the closing of this offering and the concurrent private placements and the consummation of the Transactions.
[MISSING IMAGE: fc_corporatestruc-bw.jpg]
 
19

 
Conflicts of Interest
Services Agreements
Bally’s Chicago OpCo and certain subsidiaries of Bally’s Corporation entered into the Permanent Services Agreement and the Temporary Services Agreement with BMG, a subsidiary of Bally’s Corporation, in January 2023 and in August 2023, respectively. See “— Our Relationship with Bally’s Corporation,” “Transactions with Related Persons — Permanent Services Agreement” and “Transactions with Related Persons — Temporary Services Agreement” for more information.
Other Conflicts of Interest
We are currently dependent on Bally’s for a majority of our working capital and financing requirements. As of September 30, 2024, Bally’s Chicago OpCo owes $631.0 million in promissory notes (the “Pre-IPO Intercompany Notes”) to Bally’s and various of its subsidiaries. The Pre-IPO Intercompany Notes have borne and bear interest at a rate equal to 0.0% per annum and are scheduled to mature on December 31, 2025, but all portions that remain outstanding are expected to be extinguished and contribute towards Bally’s commitment to purchase 30,000 LLC Interests for $750.0 million representing 75.0% of the economic interest in Bally’s Chicago OpCo.
In connection with the closing of this offering, we intend to pay the placement agent fees and offering and private placement expenses payable by us with the proceeds we receive from Class A investors in this offering and the concurrent private placements. In turn, we intend to issue Bally’s Chicago OpCo a promissory note (the “IPO Expenses Note”) in an amount equal to $     , which is equal to the placement agent fees and offering and private placement expenses payable by us, to cover the difference in the amount we will owe Bally’s Chicago OpCo in connection with the purchase of the LLC Interests. Bally’s Chicago OpCo intends to assign the IPO Expenses Note to Bally’s Chicago HoldCo in exchange for the cancellation of certain indebtedness owed by Bally’s Chicago OpCo to Bally’s Chicago HoldCo. The IPO Expenses Note will bear interest at a rate equal to 11.0% per annum and will mature on        .
We intend to use all of the net proceeds from this offering, together with the proceeds from the concurrent private placements, the Subordinated Loans and the IPO Expenses Note, to purchase 10,000 LLC Interests directly from Bally’s Chicago OpCo at a price per unit equal to the stated value of $25,000 per Class A Interest, which is equal to the amount paid by investors in this offering plus the corresponding amount of Subordinated Loans attributable to each Class A Interest. The 10,000 LLC Interests we purchase will represent 25.0% of the economic interest in Bally’s Chicago OpCo and the Class A Interests will represent 25.0% of the voting power and 100.0% of the economic interest in Bally’s Chicago, Inc.
Bally’s Chicago OpCo intends to use the proceeds it receives from the sale of LLC Interests to us to repay $250.0 million outstanding aggregate amount under the Pre-IPO Intercompany Notes. In addition, Bally’s Chicago OpCo intends to issue 30,000 LLC Interests to Bally’s Chicago HoldCo, at a price per LLC Interest equal to the stated value of $25,000 per Class A Interest, which is equal to the amount paid by investors in this offering plus the corresponding amount of Subordinated Loans attributable to each Class A Interest, in satisfaction of $381.0 million of indebtedness under the Pre-IPO Intercompany Notes (the “Intercompany Notes Cancellation”) and the commitment by Bally’s Chicago HoldCo to provide to Bally’s Chicago OpCo up to $369.0 million in additional funding (the “Post-IPO Capital Commitment”). Upon the closing of this offering, we intend to effect the Common Stock Reclassification and issue an additional 29,900 Class B Interests to Bally’s Chicago HoldCo at $0.001 per Class B Interest. The 30,000 LLC Interests issued by Bally’s Chicago OpCo to Bally’s Chicago HoldCo from the Intercompany Notes Cancellation and the Post-IPO Capital Commitment, will represent 75.0% of the economic interest in Bally’s Chicago OpCo and the 30,000 Class B Interests that will be held by Bally’s Chicago HoldCo will represent 75.0% of the voting power and no economic interest in Bally’s Chicago, Inc.
No compensation of any kind, including finder’s and consulting fees, will be paid by us to Bally’s officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the closing of this offering. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with their work on this offering. Our Board will review on a quarterly basis all payments that were made to Bally’s, our officers, directors or our or their affiliates.
 
20

 
Guarantee of Bally’s Corporation’s Indebtedness
We and Bally’s Chicago HoldCo, our direct parent and the entity that will hold all of our Class B Interests after the closing of this offering, as well as all other current and future direct unrestricted subsidiaries of Bally’s Corporation under its credit facilities and bond indentures, will guarantee Bally’s Chicago OpCo’s obligations under the GLP Lease Agreement and GLP Development Agreement; provided, however, that at such time as Bally’s Chicago OpCo becomes a restricted subsidiary under Bally’s Corporation’s credit facilities and bond indentures, (i) Bally’s Corporation (or its Parent Company (as defined in Bally’s Corporation’s existing master lease agreement with GLP), if any, following a Control Transaction (as defined in the GLP Term Sheet)) will be required to guarantee the GLP Lease Agreement and GLP Development Agreement and (ii) following the delivery of such guarantee, the guarantees of the GLP Lease Agreement and GLP Development Agreement provided by Bally’s Chicago HoldCo and such other unrestricted subsidiaries of Bally’s Corporation shall terminate.
In connection with Bally’s Chicago HoldCo’s commitment to guarantee the GLP Lease Agreement and GLP Development Agreement, and in partial consideration for certain investments by Bally’s Corporation and its subsidiaries into Bally’s Chicago OpCo, we and Bally’s Chicago OpCo intend to guarantee all of Bally’s Corporation’s indebtedness upon Bally’s Corporation’s (or its Parent Company’s (as defined in Bally’s Corporation’s existing master lease agreement with GLP), if any, following a Control Transaction (as defined in the GLP Term Sheet)) guaranteeing the GLP Lease Agreement and the GLP Development Agreement or upon request from Bally’s Corporation; provided that, at any time after such guarantee by Bally’s Corporation (or its Parent Company) or such request from Bally’s Corporation, upon request of Bally’s Chicago OpCo, Bally’s Corporation will guarantee Bally’s Chicago OpCo’s obligations under any lease obligations outstanding at such time, including any obligations under the Oak Street Lease Agreement or, if entered into, the GLP Lease Agreement and the GLP Development Agreement, to the maximum extent permitted under the instruments governing Bally’s Corporation’s indebtedness (assuming full borrowing of all outstanding commitments under Bally’s Corporation’s revolving credit facilities outstanding at such time). Furthermore, we and Bally’s Chicago OpCo intend to enter into the Guarantee Agreement with Bally’s Corporation, pursuant to which, at any time in the future, upon request from Bally’s Corporation, we and Bally’s Chicago OpCo will guarantee, and cause each of our wholly-owned subsidiaries to guarantee, any additional indebtedness that Bally’s Corporation enters into at any time in the future. See “Transactions with Related Persons — Guarantee of Bally’s Corporation’s Indebtedness.
Bally’s Chicago OpCo Amended and Restated Limited Liability Company Agreement
As a result of this offering and the concurrent private placements, Bally’s Chicago, Inc. will hold LLC Interests in Bally’s Chicago OpCo and will be the sole managing member of Bally’s Chicago OpCo. Accordingly, Bally’s Chicago, Inc. will have the obligation to absorb losses and receive benefits from Bally’s Chicago OpCo, and consolidate the financial results of Bally’s Chicago OpCo and, through Bally’s Chicago OpCo and its operating entity subsidiaries, conduct our business.
Pursuant to the amended and restated limited liability company agreement of Bally’s Chicago OpCo as it will be in effect at the time of this offering, Bally’s Chicago, Inc. will have the right to determine when distributions will be made to holders of LLC Interests and the amount of any such distributions, taken into consideration any applicable limitations and restrictions. See “Dividend Policy.” If a distribution is authorized, such distribution will be made to the holders of LLC Interests pro rata in accordance with the percentages of their respective LLC Interests held. See “Transactions with Related Persons — Bally’s Chicago OpCo Amended and Restated Limited Liability Company Agreement.
Stockholders Agreement
In connection with this offering and the Transactions, we and Bally’s Chicago HoldCo intend to enter into the Stockholders Agreement, pursuant to which for so long as Bally’s Chicago HoldCo beneficially owns at least 50% of the aggregate number of our stock outstanding, certain actions by us or any of our subsidiaries, including Bally’s Chicago OpCo, will require the prior written consent of Bally’s Chicago HoldCo. See “— Our Relationship with Bally’s Corporation” and “Transactions with Related Persons — Stockholders Agreement” for more information.
 
21

 
Support Letter
In March, 2024, we obtained a letter of support from Bally’s Corporation, pursuant to which Bally’s Corporation commits to fund all of our operating, investing, and financing activities through at least December 31, 2025 and further commits not to make any decision or action that would reasonably be expected to negatively affect our ability to continue as a going concern through at least December 31, 2025.
Distributions and Repayment of Subordinated Loans
Upon the closing of this offering and the concurrent private placements and the consummation of the Transactions, we will be a holding company, and our principal asset will be the LLC Interests we purchase from Bally’s Chicago OpCo. If we decide to make a distribution in the future, we would need to cause Bally’s Chicago OpCo to make distributions to us in an amount sufficient to cover the repayment of the IPO Expense Note, future borrowings plus such distribution. If Bally’s Chicago OpCo makes such distributions to us, the other holders of LLC Interests will be entitled to receive pro rata distributions.
In addition, Bally’s Chicago OpCo will report as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, any taxable income of Bally’s Chicago OpCo will be allocated to holders of LLC Interests, including us. Accordingly, we will incur income taxes on our allocable share of any net taxable income of Bally’s Chicago OpCo. Under the terms of the Bally’s Chicago OpCo LLC Agreement, Bally’s Chicago OpCo will be obligated to make tax distributions to holders of LLC Interests, including us, to the extent it has distributable cash. In addition to tax expenses, we will also incur expenses related to our operations, which we expect could be significant. We intend, as its managing member, to cause Bally’s Chicago OpCo to make cash distributions to the owners of LLC Interests in an amount sufficient to (1) fund all or part of their tax obligations in respect of taxable income allocated to them and (2) cover our operating expenses. However, Bally’s Chicago OpCo’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which Bally’s Chicago OpCo is then a party, including any debt or financing agreements, or any applicable law, or that would have the effect of rendering Bally’s Chicago OpCo insolvent. If we do not have sufficient funds to pay tax or other liabilities or to fund our operations, we may have to borrow funds, including potentially from Bally’s and its affiliates if available, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. See “Risk Factors — Risks related to our organizational structure — Our principal asset after the completion of this offering and the concurrent private placements will be our interest in Bally’s Chicago OpCo, and, as a result, we will depend on distributions from Bally’s Chicago OpCo to pay our taxes and expenses. Bally’s Chicago OpCo’s ability to make such distributions may be subject to various limitations and restrictions.
Furthermore, we intend, as its managing member, to cause Bally’s Chicago OpCo to make distributions of OpCo cash available for distribution on a quarterly basis. We define OpCo cash available for distribution as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock-based compensation, gain or loss on asset disposals or impairment, and certain other unusual or non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in the fair value of derivatives, if applicable, less payments made on senior indebtedness, capital expenditures, cash taxes, rent without duplication and changes in working capital and cash used for acquisitions and dispositions. We do not expect any such distributions until after the permanent resort and casino is fully operational and generates cash flow.
In turn, we intend to distribute cash available for distribution to the holders of our Class A Interests (subject to certain requirements discussed below). Holders of our Class B Interests will not be entitled to participate in distributions declared by our Board. We define cash available for distribution as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock-based compensation, gain or loss on asset disposals or impairment, and certain other unusual or non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in the fair value of derivatives, if applicable, less payments made on senior indebtedness, capital expenditures, cash taxes, rent without duplication and changes in working capital and cash used for acquisitions and dispositions. Cash that is distributed to holders of our Class A Interests will be distributed pro rata according to the number of Class A-1 Interests, Class A-2 Interests, Class A-3 Interests and Class A-4 Interests outstanding at the time of such distribution.
 
22

 
Given the capital intensity of developing, constructing, opening and operating a casino resort project of this scale, we currently expect that Bally’s Chicago OpCo will not have any OpCo cash available for distribution until approximately three to five years after our permanent resort and casino begins operations. However, this may fluctuate depending on Bally’s Chicago OpCo’s ability to generate cash from operations and its cash flow needs, which, among other things, may be impacted by debt service payments on its senior indebtedness, capital expenditures, potential expansion opportunities and the availability of financing alternatives, the need to service any future indebtedness or other liquidity needs and general industry and business conditions, including the pace of the construction and development of our permanent resort and casino in Chicago. Pursuant to the terms of our amended and restated certificate of incorporation to be in effect prior to the closing of this offering, so long as there are Subordinated Loans outstanding that are attributable to each of our various Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, any cash available for distribution that would otherwise be paid to holders of our Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, as applicable, will be required to be used for the repayment of principal and accrued interest on the corresponding Subordinated Loans owed by us. The Subordinated Loans will bear interest at a rate equal to 11.0% per annum, compounding quarterly, will be pre-payable at any time without a premium or penalty at a prepayment price equal to the principal amount thereof plus accrued interest, and will have no maturity date. See “Subordinated Loans” for more information on the Subordinated Loans.
If the principal and interest of any of the Subordinated Loans have been paid in full, by distributions from Bally’s Chicago OpCo or any other means, we intend to distribute to holders of the corresponding Class A Interests with respect to any such Subordinated Loan an amount equal to 100% of the applicable distribution specified above in the form of a direct cash dividend.
While we intend, as its managing member, to cause Bally’s Chicago OpCo to make distributions on a quarterly basis once it is able to generate OpCo cash available for distribution approximately three to five years after our permanent resort and casino begins operations, we and Bally’s Chicago OpCo have not adopted a formal written dividend or distribution policy to pay a fixed amount of cash regularly or to pay any particular amount based on the achievement of, or derivable from, any specific financial metrics, including OpCo cash available for distribution. Further, we and Bally’s Chicago OpCo are not contractually obligated to pay any dividends or make any distributions and do not have any required minimum quarterly dividend or distribution, except for tax-related distributions described above. Our and Bally’s Chicago OpCo’s distributions may vary from quarter to quarter, may be significantly reduced or may be eliminated entirely. While we and Bally’s Chicago OpCo intend to make distributions equal to 100% of the cash available for distribution and OpCo cash available for distribution, respectively, on a quarterly basis, the actual amount of any distributions may fluctuate depending on our and Bally’s Chicago OpCo’s ability to generate cash from operations and our and Bally’s Chicago OpCo’s cash flow needs, which, among other things, may be impacted by debt service payments on our or Bally’s Chicago OpCo’s senior indebtedness, capital expenditures, potential expansion opportunities and the availability of financing alternatives, the need to service any future indebtedness or other liquidity needs and general industry and business conditions, including the pace of the construction and development of our permanent resort and casino in Chicago. Our Board will have full discretion on how to deploy cash available for distribution, including the payment of dividends. Any debt we or Bally’s Chicago OpCo may incur in the future is likely to restrict our and Bally’s Chicago OpCo ability to pay dividends or distributions, and such restriction may prohibit us and Bally’s Chicago OpCo from making distributions, or reduce the amount of cash available for distribution and OpCo cash available for distribution. In addition, Delaware law imposes requirements that may restrict our ability to pay dividends to holders of our shares. See “Risk Factors — Risks Related to this Offering and Ownership of our Class A Interests — You may not receive dividends or other distributions on the Class A Interests” and “Dividend Policy.”
Illustrative Examples
For illustrative purposes, below are examples of the following:

how we intend to initially make quarterly distributions of cash available for distributions;

how the compounding interest will affect the attributable value of the Subordinated Loans depending on the amount of distributions made on a quarterly basis; and
 
23

 

how, in the event of a sale of Bally’s Chicago OpCo, the amount paid in connection with such sale would be distributed per Class A Interest outstanding at the time of such sale.
These illustrative examples are only for purposes of illustrating how the effects of the Subordinated Loans would apply in such specific example. These illustrative examples are not projections, goals or targets. Nothing in these illustrative examples should be regarded as a representation by any person that these are projections, goals or targets. The cash available for distribution that is distributed to holders of our Class A Interests will be distributed pro rata according to the number of Class A-1 Interests, Class A-2 Interests, Class A-3 Interests and Class A-4 Interests outstanding at the time of such distribution. The examples below assume an equal number of Class A-1 Interests, Class A-2 Interests, Class A-3 Interests and Class A-4 Interests outstanding.
Given the capital intensity of developing, constructing, opening and operating a casino resort project of this scale, we currently expect that Bally’s Chicago OpCo will not have any OpCo cash available for distribution until approximately three to five years after our permanent resort and casino begins operations. However, this may fluctuate depending on Bally’s Chicago OpCo’s ability to generate cash from operations and its cash flow needs, which, among other things, may be impacted by debt service payments on Bally’s Chicago OpCo’s senior indebtedness, capital expenditures, potential expansion opportunities and the availability of financing alternatives, the need to service any future indebtedness or other liquidity needs and general industry and business conditions, including the pace of the construction and development of our permanent resort and casino in Chicago. See “Risk Factors — Risks Related to this Offering and Ownership of our Class A Interests — You may not receive dividends or other distributions on the Class A Interests” and “Dividend Policy.”
The following illustrative example illustrates how we intend to initially make quarterly distributions of cash available for distributions once Bally’s Chicago OpCo is able to generate OpCo cash available for distribution assuming an aggregate number of 10,000 Class A Interests outstanding, distributed as 500 Class A-1 Interests, 1,000 Class A-2 Interests, 1,000 Class A-3 Interests and 7,500 Class A-4 Interests outstanding.
For example, if Bally’s Chicago OpCo has $100,000,000 of OpCo cash available for distribution in a year, or $25,000,000 of OpCo cash available for distribution in a quarter, and in turn we have $25,000,000 of cash available for distribution in a year, or $6,250,000 of cash available for distribution in a quarter, we would intend to distribute such cash available for distribution as follows:
Initially, when none of the Subordinated Loans have been fully repaid(1):

$1,250,000 per year, or $312,500 per quarter, towards the servicing of accrued interest and principal on the Class A-1 Subordinated Loan;

$2,500,000 per year, or $625,000 per quarter, towards the servicing of accrued interest and principal on the Class A-2 Subordinated Loan;

$2,500,000 per year, or $625,000 per quarter, towards the servicing of accrued interest and principal on the Class A-3 Subordinated Loan; and

$18,750,000 per year, or $4,687,500 per quarter, dividend to the holders of our Class A-4 Interests.
(1)
This illustrative example assumes an aggregate number of 10,000 Class A Interests outstanding, distributed as 500 Class A-1 Interests, 1,000 Class A-2 Interests, 1,000 Class A-3 Interests and 7,500 Class A-4 Interests outstanding. However, in the event that there are different amounts of Class A-1 Interests, Class A-2 Interests, Class A-3 Interests or Class A-4 Interests outstanding, the cash available for distribution that is distributed to holders of our Class A Interests will be distributed pro rata according to the number of Class A-1 Interests, Class A-2 Interests, Class A-3 Interests and Class A-4 Interests outstanding at the time of such distribution. Under this illustrative example, each 1% increase (decrease) in the number of Class A-1, A-2, A-3 or A-4 Interests outstanding as a percentage of our total outstanding shares, would increase (decrease) the cash available for distribution to such class of Class A Interests by approximately $25,000 on annual basis or $6,250 on a quarterly basis.
 
24

 
Once the Subordinated Loans for a particular class have been fully repaid, such class would receive the same amount as a dividend. Once all Subordinated Loans have been fully repaid, we would distribute the $25,000,000 of cash available for distribution per year, or the $6,250,000 of cash available for distribution per quarter, to all Class A Interests on a pro rata basis as a dividend, which would amount to $2,500 per year per Class A Interest or $625 per quarter per Class A Interest.
The following tables include illustrative mathematical examples that illustrate how the compounding interest will affect the attributable value of the Subordinated Loans depending on the amount of distributions made on a quarterly basis:
Class of
Interests
Assumed
Aggregate
Class A
Distributions
per Year,
beginning in
Year 3(1)
Balance of
corresponding
Subordinated
Loans
Interest as of
the Closing of
this Offering
Illustrative Mathematical Examples, taking into
account compounding interest and assumed distribution amounts:
Resulting Balance of Subordinated Loans per
corresponding share at the End of Fiscal Year(1)(2)
Assumed
Payoff date
taking into
account
compounding
interest and
assumed
distribution
amounts:
Year 1(1)
Year 2(1)
Year 3
Year 4
Year 5
Year 6
Year 7
A-1
$ 0
$24,750
$27,587
$30,749
$ 34,273 $ 38,202 $ 42,581 $ 47,461 $ 52,901
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
$ 31,668 $ 32,693 $ 33,836 $ 35,109 $ 36,528
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
$ 30,105 $ 29,388 $ 28,588 $ 27,697 $ 26,704
Year 19
A-2
$ 0
$22,500
$25,079
$27,954
$ 31,158 $ 34,729 $ 38,710 $ 43,147 $ 48,092
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
$ 28,553 $ 29,220 $ 29,965 $ 30,794 $ 31,719
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
$ 26,990 $ 25,915 $ 24,718 $ 23,383 $ 21,895
Year 16
A-3
$ 0
$20,000
$22,292
$24,848
$ 27,696 $ 30,870 $ 34,409 $ 38,353 $ 42,749
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
$ 25,091 $ 25,362 $ 25,663 $ 26,000 $ 26,375
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
$ 23,528 $ 22,056 $ 20,416 $ 18,589 $ 16,551
Year 12
(1)
All assumptions assume no cash distributions until end of the first quarter of Year 3 after our permanent resort and casino begins operations.
(2)
The Subordinated Loans will bear interest at a rate equal to 11.0% per annum, compounding quarterly.
(3)
This assumed aggregate amount of distributions would result in payments on Subordinated Loans, or distributions, of approximately $2,500 per Class A Interest per year or $625 per Class A Interest per quarter.
(4)
This assumed aggregate amount of distributions would result in payments on Subordinated Loans, or distributions, of approximately $4,000 per Class A Interest per year or $1,000 per Class A Interest per quarter.
Class of Interests
Assumed
Aggregate
Class A
Distributions
per Year,
beginning in
Year 4(1)
Balance of
corresponding
Subordinated
Loans
Interest as of
the Closing of
this Offering
Illustrative Mathematical Examples, taking into
account compounding interest and assumed distribution amounts:
Resulting Balance of Subordinated Loans per
corresponding share at the End of Fiscal Year(1)(2)
Assumed
Payoff date
taking into
account
compounding
interest and
assumed
distribution
amounts:
Year 1(1)
Year 2(1)
Year 3
Year 4
Year 5
Year 6
Year 7
A-1
$ 0
$24,750
$27,587
$30,749
$34,273
$ 38,202 $ 42,581 $ 47,461 $ 52,901
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
Same as above
$ 35,597 $ 37,072 $ 38,716 $ 40,549
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
Same as above
$ 34,034 $ 33,767 $ 33,469 $ 33,137
Year 32
A-2
$ 0
$22,500
$25,079
$27,954
$31,158
$ 34,729 $ 38,710 $ 43,147 $ 48,092
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
Same as above
$ 32,124 $ 33,201 $ 34,402 $ 35,740
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
Same as above
$ 30,561 $ 29,896 $ 29,154 $ 28,328
Year 20
A-3
$ 0
$20,000
$22,292
$24,848
$27,696
$ 30,870 $ 34,409 $ 38,353 $ 42,749
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
Same as above
$ 28,265 $ 28,900 $ 29,607 $ 30,396
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
Same as above
$ 26,702 $ 25,595 $ 24,360 $ 22,985
Year 16
(1)
All assumptions assume no cash distributions until end of the first quarter of Year 4 after our permanent resort and casino begins operations.
 
25

 
(2)
The Subordinated Loans will bear interest at a rate equal to 11.0% per annum, compounding quarterly.
(3)
This assumed aggregate amount of distributions would result in payments on Subordinated Loans, or distributions, of approximately $2,500 per Class A Interest per year or $625 per Class A Interest per quarter.
(4)
This assumed aggregate amount of distributions would result in payments on Subordinated Loans, or distributions, of approximately $4,000 per Class A Interest per year or $1,000 per Class A Interest per quarter.
Class of
Interests
Assumed
Aggregate
Class A
Distributions
per Year,
beginning in
Year 5(1)
Balance of
corresponding
Subordinated
Loans
Interest as of
the Closing of
this Offering
Illustrative Mathematical Examples, taking into
account compounding interest and assumed distribution amounts:
Resulting Balance of Subordinated Loans per
corresponding share at the End of Fiscal Year(1)(2)
Assumed
Payoff date
taking into
account
compounding
interest and
assumed
distribution
amounts:
Year 1(1)
Year 2(1)
Year 3
Year 4
Year 5
Year 6
Year 7
A-1
$ 0
$24,750
$27,587
$30,749
$34,273
$38,202
$ 42,581 $ 47,461 $ 52,901
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
Same as above
Same as above
$ 39,976 $ 41,953 $ 44,156
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
Same as above
Same as above
$ 38,413 $ 38,647 $ 38,909
N/A
A-2
$ 0
$22,500
$25,079
$27,954
$31,158
$34,729
$ 38,710 $ 43,147 $ 48,092
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
Same as above
Same as above
$ 36,105 $ 37,638 $ 39,347
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
Same as above
Same as above
$ 34,542 $ 34,333 $ 34,100
Year 31
A-3
$ 0
$20,000
$22,292
$24,848
$27,696
$30,870
$ 34,409 $ 38,353 $ 42,749
N/A
$ 25,000,000(3)
Same as above
Same as above
Same as above
Same as above
Same as above
$ 31,804 $ 32,844 $ 34,003
N/A
$ 40,000,000(4)
Same as above
Same as above
Same as above
Same as above
Same as above
$ 30,241 $ 29,539 $ 28,756
Year 21
(1)
All assumptions assume no cash distributions until end of the first quarter of Year 5 after our permanent resort and casino begins operations.
(2)
The Subordinated Loans will bear interest at a rate equal to 11.0% per annum, compounding quarterly.
(3)
This assumed aggregate amount of distributions would result in payments on Subordinated Loans, or distributions, of approximately $2,500 per Class A Interest per year or $625 per Class A Interest per quarter.
(4)
This assumed aggregate amount of distributions would result in payments on Subordinated Loans, or distributions, of approximately $4,000 per Class A Interest per year or $1,000 per Class A Interest per quarter.
The following table includes illustrative mathematical examples that illustrate how, in the event of a sale of Bally’s Chicago OpCo at the end of Year 7 after our permanent resort and casino begins operations, the amount paid in connection with such sale would be distributed per share outstanding at the time of such sale, taking into account the illustrative mathematical examples in each of the tables above:
Illustrative Mathematical Examples, taking into account assumed total senior indebtedness, compounding interest and
assumed distribution amounts beginning Year 3 after our permanent resort and casino begins operations:
Assumed
Aggregate
Class A
Distributions
per Year,
beginning
in Year 3
Assumed Price
Paid in
Connection with
the Sale of the
Company(1)
Assumed Total
Senior
Indebtedness
Outstanding of
Bally’s Chicago
OpCo at
the Time of the
Sale of the
Company
Amount
Remaining After
Payment of
Senior
Indebtedness
Outstanding of
Bally’s Chicago
OpCo
Amount
Distributed
to Bally’s
Chicago, Inc.(2)
Assumed Total
Subordinated
Loans
Outstanding at
the Time
of the
Sale of the
Company(2)
Amount
Remaining
After
Payment of
Subordinated
Loans
Outstanding
Amount
Distributed to
Class A
Interests
Average
Amount
Distributed per
Class A
Interest(1)
$         0
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 117,291,297 $ 182,708,703 $ 182,708,703 $ 18,271
$25,000,000
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 76,357,863 $ 223,642,137 $ 223,642,137 $ 22,364
$40,000,000
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 51,797,803 $ 248,202,197 $ 248,202,197 $ 24,820
(1)
In the event of a sale of Bally’s Chicago OpCo, after payment or provision for payment of Bally’s Chicago OpCo’s debt and liabilities, including any amounts due under Bally’s Chicago OpCo’s senior indebtedness, each LLC Interest will be entitled to receive a proportionate interest in the net assets of
 
26

 
Bally’s Chicago OpCo. In turn, the interests in the net assets of Bally’s Chicago OpCo received by Bally’s Chicago, Inc. will be used to pay Bally’s Chicago, Inc.’s debts and liabilities, including any amounts under any senior indebtedness and the Subordinated Loans owed to Bally’s at the time of such sale. Each Class A Interest will be entitled to receive a proportionate interest in the net assets remaining for distribution to holders of Class A Interests as adjusted for any amount of Subordinated Loans attributable to such class that remained outstanding at the time of the sale of Bally’s Chicago OpCo. Under this illustrative example, the holders of Class A-4 Interests would be entitled to receive $30,000 and the holders of Class A-1, A-2 and A-3 Interests would be entitled to receive any remaining assets after the Subordinated Loans attributable to their respective classes have been repaid. Class B Interests hold no economic interest in Bally’s Chicago, Inc.
(2)
Calculated based on the resulting balance of Subordinated Loans per corresponding share at the end of Year 7 after our permanent resort and casino begins operations multiplied by the number of the corresponding Class A Interests then outstanding.
Illustrative Mathematical Examples, taking into account assumed total senior indebtedness, compounding interest and
assumed distribution amounts beginning Year 4 after our permanent resort and casino begins operations:
Assumed
Aggregate
Class A
Distributions
per Year,
beginning
in Year 4
Assumed Price
Paid in
Connection with
the Sale of the
Company(1)
Assumed Total
Senior
Indebtedness
Outstanding of
Bally’s Chicago
OpCo at
the Time of the
Sale of the
Company
Amount
Remaining After
Payment of
Senior
Indebtedness
Outstanding of
Bally’s Chicago
OpCo
Amount
Distributed to
Bally’s
Chicago, Inc.(2)
Assumed Total
Subordinated
Loans
Outstanding at
the Time of the
Sale of the
Company(2)
Amount
Remaining After
Payment of
Subordinated
Loans
Outstanding
Amount
Distributed to
Class A Interests
Average
Amount
Distributed per
Class A
Interest(1)
$         0
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 117,291,297 $ 182,708,703 $ 182,708,703 $ 18,271
$25,000,000
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 86,410,079 $ 213,589,921 $ 213,589,921 $ 21,359
$40,000,000
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 67,881,348 $ 232,118,652 $ 232,118,652 $ 23,212
(1)
In the event of a sale of Bally’s Chicago OpCo, after payment or provision for payment of Bally’s Chicago OpCo’s debt and liabilities, including any amounts due under Bally’s Chicago OpCo’s senior indebtedness, each LLC Interest will be entitled to receive a proportionate interest in the net assets of Bally’s Chicago OpCo. In turn, the interests in the net assets of Bally’s Chicago OpCo received by Bally’s Chicago, Inc. will be used to pay Bally’s Chicago, Inc.’s debts and liabilities, including any amounts under any senior indebtedness and the Subordinated Loans owed to Bally’s at the time of such sale. Each Class A Interest will be entitled to receive a proportionate interest in the net assets remaining for distribution to holders of Class A Interests as adjusted for any amount of Subordinated Loans attributable to such class that remained outstanding at the time of the sale of Bally’s Chicago OpCo. Under this illustrative example, the holders of Class A-4 Interests would be entitled to receive $30,000 and the holders of Class A-1, A-2 and A-3 Interests would be entitled to receive any remaining assets after the Subordinated Loans attributable to their respective classes have been repaid. Class B Interests hold no economic interest in Bally’s Chicago, Inc.
(2)
Calculated based on the resulting balance of Subordinated Loans per corresponding share at the end of Year 7 after our permanent resort and casino begins operations multiplied by the number of the corresponding Class A Interests then outstanding.
Illustrative Mathematical Examples, taking into account assumed total senior indebtedness, compounding interest and
assumed distribution amounts beginning Year 5 after our permanent resort and casino begins operations::
Assumed
Aggregate
Class A
Distributions
per Year,
beginning
in Year 5
Assumed Price
Paid in
Connection with
the Sale of the
Company(1)
Assumed Total
Senior
Indebtedness
Outstanding of
Bally’s Chicago
OpCo at
the Time of the
Sale of the
Company
Amount
Remaining After
Payment of
Senior
Indebtedness
Outstanding of
Bally’s Chicago
OpCo
Amount
Distributed to
Bally’s
Chicago, Inc.(2)
Assumed Total
Subordinated
Loans
Outstanding at
the Time of the
Sale of the
Company(2)
Amount
Remaining After
Payment of
Subordinated
Loans
Outstanding
Amount
Distributed to
Class A Interests
Average
Amount
Distributed per
Class A
Interest(1)
$         0
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 117,291,297 $ 182,708,703 $ 182,708,703 $ 18,271
$25,000,000
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 95,428,582 $ 204,571,418 $ 204,571,418 $ 20,457
$40,000,000
$ 1,200,000,000 $ 0 $ 1,200,000,000 $ 300,000,000 $ 82,310,954 $ 217,689,046 $ 217,689,046 $ 21,769
(1)
In the event of a sale of Bally’s Chicago OpCo, after payment or provision for payment of Bally’s Chicago OpCo’s debt and liabilities, including any amounts due under Bally’s Chicago OpCo’s senior indebtedness, each LLC Interest will be entitled to receive a proportionate interest in the net assets of
 
27

 
Bally’s Chicago OpCo. In turn, the interests in the net assets of Bally’s Chicago OpCo received by Bally’s Chicago, Inc. will be used to pay Bally’s Chicago, Inc.’s debts and liabilities, including any amounts under any senior indebtedness and the Subordinated Loans owed to Bally’s at the time of such sale. Each Class A Interest will be entitled to receive a proportionate interest in the net assets remaining for distribution to holders of Class A Interests as adjusted for any amount of Subordinated Loans attributable to such class that remained outstanding at the time of the sale of Bally’s Chicago OpCo. Under this illustrative example, the holders of Class A-4 Interests would be entitled to receive $30,000 and the holders of Class A-1, A-2 and A-3 Interests would be entitled to receive any remaining assets after the Subordinated Loans attributable to their respective classes have been repaid. Class B Interests hold no economic interest in Bally’s Chicago, Inc.
(2)
Calculated based on the resulting balance of Subordinated Loans per corresponding share at the end of Year 7 after our permanent resort and casino begins operations multiplied by the number of the corresponding Class A Interests then outstanding.
Summary of Risk Factors
Our ability to implement our business strategy is subject to numerous risks and uncertainties. We face many risks inherent in our business generally. You should carefully consider all of the information set forth in this prospectus and, in particular, the information under the heading “Risk Factors,” prior to making an investment in our Class A Interests. These risks include, among others, the following:

We are subject to various construction and development risks in connection with our permanent resort and casino in Chicago;

Any delay between the closing of our temporary casino and the opening of our permanent resort and casino could have a material adverse effect on our financial condition and results of operations;

The casino, hotel and hospitality industry is capital intensive and we may not be able to finance development, expansion and renovation projects, which could put us at a competitive disadvantage;

Both our temporary casino site and permanent resort and casino site are leased and could experience risks associated with leased properties, including risks relating to lease termination, inability to obtain satisfactory lease extensions, consents and approvals, charges and our relationship with landlords, which could have a material adverse effect on our business, financial position or results of operations;

Our proposed lines of business are highly sensitive to reductions in discretionary consumer spending;

The gaming industry, including retail casinos, iGaming and sports wagering, is highly competitive and increased competition, including through legislative legalization or expansion of gaming by states in or near Illinois or through Native American gaming facilities, could adversely affect our financial results;

We will be subject to extensive state and local regulation and licensing, and gaming authorities have significant control over our operations, which could have an adverse effect on our business;

Our business will be subject to a variety of laws in the United States and in Illinois, many of which are unsettled and still developing, and which could subject us to claims or otherwise harm our business. Any change in existing regulations or their interpretation, or the regulatory or prosecutorial climate applicable to the products and services we offer in our temporary casino and intend to offer in our permanent resort and casino, or changes in gaming tax rates, tax rules and regulations or interpretation thereof related to such products and services, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations;

We will be reliant on effective payment processing services from a limited number of providers;

Our profitability will be dependent, in part, on return to players;

We will extend credit to a portion of our customers, and we may not be able to collect gaming receivables from our credit customers;
 
28

 

Declining popularity of games and changes in device preferences of players could have a negative effect on our business;

We may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate acquired businesses into the Company or otherwise manage the growth associated with multiple acquisitions;

Our results of operations and financial condition could be adversely affected by the occurrence of natural disasters, such as blizzards, floods, tornadoes, fires, or other catastrophic events, including war, terrorism and public health crises such as the COVID-19 pandemic;

Failure to comply with the community investment program commitments specified in the Host Community Agreement could have a material adverse effect on our financial condition and results of operations;

Bally’s interests may conflict with our interests and the interests of the other holders of our stock. Conflicts of interest between Bally’s and us could be resolved in a manner unfavorable to us and the other holders of our stock;

We rely on information technology and other systems and platforms, and any failures, errors, defects or disruptions in our systems or platforms could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our operating results and growth prospects;

Our business may be harmed from cybersecurity incidents and we may be subject to legal claims if there is loss, disclosure or misappropriation of or access to our customers’, business partners’ or our own information or other breaches of information security;

Servicing our indebtedness and funding our other obligations requires a significant amount of cash, and our ability to generate sufficient cash depends on many factors, some of which will be beyond our control;

Our Class A Interests will not have an active trading market, and you may find it difficult to sell your Class A Interests;

You may not receive dividends or other distributions on the Class A Interests; and

Pursuant to the terms of our amended and restated certificate of incorporation to be in effect prior to the closing of this offering, so long as there are Subordinated Loans outstanding that are attributable to each of our various Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, any cash available for distribution that would otherwise be paid to holders of our Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, as applicable, will be required to be used for the repayment of principal and accrued interest on the corresponding Subordinated Loans owed by us until such time as such Subordinated Loans are fully paid and discharged, which means you may never directly receive a cash dividend on your Class A-1 Interests, Class A-2 Interests and Class A-3 Interests.
Corporate Information
Our principal executive offices are located at 640 N LaSalle, Suite 460, Chicago, IL 60654, and our telephone number is (401) 475-8474. Our website address is https://casinos.ballys.com/chicago/. The information contained on our website is not being incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus.
Our logo and the other “Bally’s” trademarks and service marks of Bally’s Corporation appearing in this prospectus are the property of BMG, a subsidiary of Bally’s Corporation. This prospectus contains additional trade names, trademarks and service marks of other companies. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply relationships with, or endorsement or sponsorship of us by, these other companies. Subsequent use of such trademarks and service marks in this prospectus and prospectus supplements may occur without their respective superscript symbols (TM or SM) in order to facilitate readability and does not constitute a waiver of any rights that might be associated with the respective trademarks or service marks.
 
29

 
Implications of Being an Emerging Growth Company and a Smaller Reporting Company
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of certain reduced disclosure and other requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”);

not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, unless the SEC determines the new rules are necessary for protecting the public;

reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We will remain an emerging growth company until the earliest to occur of: (i) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion; (ii) the date that we become a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates as of the end of the second quarter of that fiscal year; (iii) the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the first fiscal year ending after the fifth anniversary of the closing of this offering. Given that there will not be an active trading market for our equity securities, we expect to value the equity securities held by non-affiliates for purposes of determining our qualification as an “emerging growth company” by relying on a stated value of $25,000 per Class A Interest, which is equal to the amount paid by investors in this offering plus the corresponding amount of Subordinated Loans attributable to each Class A Interest. As of the closing of this offering and the concurrent private placements, we expect approximately $250.0 million of equity securities to be held by non-affiliates based on the valuation criteria described above.
We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide may be different than the information you receive from other public companies in which you hold stock.
Emerging growth companies can also take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to use this extended transition period. As a result, our consolidated financial statements are comparable to the financial statements of companies that comply with new or revised accounting pronouncements as of public company effective dates.
We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting shares of stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting shares of stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
 
30

 
THE OFFERING
Aggregate number of securities offered
10,000 Class A Interests (divided into Class A-1 Interests, Class A-2 Interests, Class A-3 Interests and Class A-4 Interests).
Securities offered
500 Class A-1 Interests, par value $0.001 per share;
1,000 Class A-2 Interests, par value $0.001 per share;
1,000 Class A-3 Interests, par value $0.001 per share; and
7,500 Class A-4 Interests, par value $0.001 per share.
Class A Interests to be sold in the concurrent private
placements
Immediately subsequent to the closing of this offering, and subject to certain conditions of closing as described in “Concurrent Private Placements,” the private placement investors will purchase         Class A-1 Interests,         Class A-2 Interests,         Class A-3 Interests, and         Class A-4 Interests, respectively, in the concurrent private placements at a price per share equal to the initial public offering. The sale of the Class A Interests in the private placements is contingent upon the completion of this offering. We refer to these private placements as the concurrent private placements.
Class A Interests to be outstanding after this offering and the concurrent private
placements
10,000 Class A Interests (divided into Class A-1 Interests, Class A-2 Interests, Class A-3 Interests and Class A-4 Interests) representing 25% of the voting power and 100% of the economic interest in Bally’s Chicago, Inc.
Class B Interests to be outstanding after this offering and the concurrent private
placements
30,000 Class B Interests representing 75% of the voting power and no economic interest in Bally’s Chicago, Inc.
Offering type
This offering is being conducted on a best efforts basis. There is no minimum number of Class A Interests to be sold (or minimum number of Class A Interests to be sold of each class) or minimum aggregate offering proceeds for this offering to close.
Use of proceeds
We estimate that the net proceeds we will receive from the sale of Class A Interests in this offering will be approximately $195.1 million and, together with the net proceeds from the concurrent private placements, the Subordinated Loans and the IPO Expenses Note, will total approximately $250.0 million, in each case assuming the sale of Class A Interests at the public offering prices set forth on the cover of this prospectus, after deducting the placement agent fees and offering and private placement expenses payable by us.
We intend to use all of the net proceeds from this offering, together with the proceeds from the concurrent private placements, the Subordinated Loans and the IPO Expenses Note, to purchase 10,000 LLC Interests directly from Bally’s Chicago OpCo at a price per unit equal to the stated value of $25,000 per Class A Interest, which is equal to the amount paid by investors in this offering plus the corresponding amount of Subordinated Loans attributable to each Class A Interest.
 
31

 
Bally’s Chicago OpCo intends to use the proceeds it receives from the sale of LLC Interests to Bally’s Chicago, Inc. to repay $250.0 million outstanding aggregate amount under the Pre-IPO Intercompany Notes. See “Use of Proceeds.”
Investor qualification
Prospective investors cannot be employee benefit plans (e.g., 401(k) plans), IRAs, or other Plans (as defined herein). In accordance with the Host Community Agreement, we are also focused on cultivating an investor community that reflects diversity in social identity, including in race, ethnicity, class, gender, ability and national origin, among others. As such, in accordance with the Host Community Agreement, when allocating shares to potential investors in connection with this offering, we intend to only sell to investors that meet the Class A Qualification Criteria. See “Plan of Distribution — Offering Process.”
Voting rights
Each Class A Interest and each Class B Interest is entitled to one vote per share on all matters submitted to a vote of stockholders.
Following the closing of this offering and the concurrent private placements and the consummation of the Transactions, Bally’s Chicago HoldCo will be the sole holder of our Class B Interests, and thus will hold 75% of the voting power of our stock. See “Description of Capital Stock.”
Dividends
Upon the closing of this offering and the concurrent private placements and the consummation of the Transactions, we will be a holding company, and our principal asset will be the LLC Interests we purchase from Bally’s Chicago OpCo. If we decide to make a distribution in the future, we would need to cause Bally’s Chicago OpCo to make distributions to us in an amount sufficient to cover the repayment of the IPO Expense Note, future borrowings plus such distribution. If Bally’s Chicago OpCo makes such distributions to us, the other holders of LLC Interests will be entitled to receive pro rata distributions.
In addition, Bally’s Chicago OpCo will report as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, any taxable income of Bally’s Chicago OpCo will be allocated to holders of LLC Interests, including us. Accordingly, we will incur income taxes on our allocable share of any net taxable income of Bally’s Chicago OpCo. Under the terms of the Bally’s Chicago OpCo LLC Agreement, Bally’s Chicago OpCo will be obligated to make tax distributions to holders of LLC Interests, including us, to the extent it has distributable cash. In addition to tax expenses, we will also incur expenses related to our operations, which we expect could be significant. We intend, as its managing member, to cause Bally’s Chicago OpCo to make cash distributions to the owners of LLC Interests in an amount sufficient to (1) fund all or part of their tax obligations in respect of taxable income allocated to them and (2) cover our operating expenses. However, Bally’s Chicago OpCo’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which Bally’s Chicago OpCo is then a party, including any debt or financing agreements, or any applicable law, or that would have the effect of rendering Bally’s Chicago OpCo insolvent. If we do not have
 
32

 
sufficient funds to pay tax or other liabilities or to fund our operations, we may have to borrow funds, including potentially from Bally’s and its affiliates if available, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. See “Risk Factors — Risks related to our organizational structure — Our principal asset after the completion of this offering and the concurrent private placements will be our interest in Bally’s Chicago OpCo, and, as a result, we will depend on distributions from Bally’s Chicago OpCo to pay our taxes and expenses. Bally’s Chicago OpCo’s ability to make such distributions may be subject to various limitations and restrictions.
Furthermore, we intend, as its managing member, to cause Bally’s Chicago OpCo to make distributions of OpCo cash available for distribution on a quarterly basis. We define OpCo cash available for distribution as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock-based compensation, gain or loss on asset disposals or impairment, and certain other unusual or non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in the fair value of derivatives, if applicable, less payments made on senior indebtedness, capital expenditures, cash taxes, rent without duplication and changes in working capital and cash used for acquisitions and dispositions. We do not expect any such distributions until after the permanent resort and casino is fully operational and generates cash flow.
In turn, we intend to distribute cash available for distribution to the holders of our Class A Interests (subject to certain requirements discussed below). Holders of our Class B Interests will not be entitled to participate in distributions declared by our Board. We define cash available for distribution as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock-based compensation, gain or loss on asset disposals or impairment, and certain other unusual or non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in the fair value of derivatives, if applicable, less payments made on senior indebtedness, capital expenditures, cash taxes, rent without duplication and changes in working capital and cash used for acquisitions and dispositions. Cash that is distributed to holders of our Class A Interests will be distributed pro rata according to the number of Class A-1 Interests, Class A-2 Interests, Class A-3 Interests and Class A-4 Interests outstanding at the time of such distribution. Given the capital intensity of developing, constructing, opening and operating a casino resort project of this scale, we currently expect that Bally’s Chicago OpCo will not have any OpCo cash available for distribution until approximately three to five years after our permanent resort and casino begins operations. However, this may fluctuate depending on Bally’s Chicago OpCo’s ability to generate cash from operations and its cash flow needs, which, among other things, may be impacted by debt service payments on its senior indebtedness, capital expenditures, potential expansion opportunities and the availability of financing alternatives, the need to service any future indebtedness or other liquidity needs and general industry and business conditions, including the pace of the construction and development of our permanent resort and
 
33

 
casino in Chicago. Pursuant to the terms of our amended and restated certificate of incorporation to be in effect prior to the closing of this offering, so long as there are Subordinated Loans outstanding that are attributable to each of our various Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, any cash available for distribution that would otherwise be paid to holders of our Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, as applicable, will be required to be used for the repayment of principal and accrued interest on the corresponding Subordinated Loans owed by us. The Subordinated Loans will bear interest at a rate equal to 11.0% per annum, compounding quarterly, will be pre-payable at any time without a premium or penalty at a prepayment price equal to the principal amount thereof plus accrued interest, and will have no maturity date. See “Subordinated Loans” for more information on the Subordinated Loans.
If the principal and interest of any of the Subordinated Loans have been paid in full, by distributions from Bally’s Chicago OpCo or any other means, we intend to distribute to holders of the corresponding Class A Interests with respect to any such Subordinated Loan an amount equal to 100% of the applicable distribution specified above in the form of a direct cash dividend.
While we intend, as its managing member, to cause Bally’s Chicago OpCo to make distributions on a quarterly basis once it is able to generate OpCo cash available for distribution approximately three to five years after our permanent resort and casino begins operations, we and Bally’s Chicago OpCo have not adopted a formal written dividend or distribution policy to pay a fixed amount of cash regularly or to pay any particular amount based on the achievement of, or derivable from, any specific financial metrics, including OpCo cash available for distribution. Further, we and Bally’s Chicago OpCo are not contractually obligated to pay any dividends or make any distributions and do not have any required minimum quarterly dividend or distribution, except for tax-related distributions described above. Our and Bally’s Chicago OpCo’s distributions may vary from quarter to quarter, may be significantly reduced or may be eliminated entirely. While we and Bally’s Chicago OpCo intend to make distributions equal to 100% of the cash available for distribution and OpCo cash available for distribution, respectively, on a quarterly basis, the actual amount of any distributions may fluctuate depending on our and Bally’s Chicago OpCo’s ability to generate cash from operations and our and Bally’s Chicago OpCo’s cash flow needs, which, among other things, may be impacted by debt service payments on our or Bally’s Chicago OpCo’s senior indebtedness, capital expenditures, potential expansion opportunities and the availability of financing alternatives, the need to service any future indebtedness or other liquidity needs and general industry and business conditions, including the pace of the construction and development of our permanent resort and casino in Chicago. Our Board will have full discretion on how to deploy cash available for distribution, including the payment of dividends. Any debt we or Bally’s Chicago OpCo may incur in the future is likely to restrict our and Bally’s Chicago OpCo ability to pay dividends or distributions, and such restriction may prohibit us and Bally’s Chicago OpCo from making distributions, or reduce the amount of cash available for distribution and OpCo cash available for
 
34

 
distribution. In addition, Delaware law imposes requirements that may restrict our ability to pay dividends to holders of our shares. See “Risk Factors — Risks Related to this Offering and Ownership of our Class A Interests — You may not receive dividends or other distributions on the Class A Interests” and “Dividend Policy.
Electronic form and trading market
The Class A Interests will be issued in electronic form only, and will not be available in physical form. Our Class A Interests are new securities; there are currently none issued and there is currently no established market for such shares.
Our Class A Interests will not be listed on any national securities exchange or on any other stock exchange, regulated trading facility or automated dealer quotation system in the United States or internationally. Additionally, there is no trading market for our Class A Interests and, due to transferability restrictions, an active market for our Class A Interests will not likely develop in the future. As such, our Class A Interests will have limited liquidity and holders of our Class A Interests may not be able to monetize their full investment in our Class A Interests, if at all. Furthermore, Class A-1 Interests, Class A-2 Interests and Class A-3 Interests can be transferred only after the Subordinated Loan attributable to such Interest has been paid in full and such interest has been converted to an A-4 Interest.
Transfer Restrictions
Our Class A Interests are subject to restrictions on transferability and redemption provisions, which will materially impact the ability of holders of our Class A Interests to transfer their shares.
These restrictions include, among others:

Our Class A Interests cannot be sold in open market transactions;

Our Class A Interests cannot be marketed or listed on any secondary market for purchase;

Our Class A Interests can only be transferred without our consent to Permitted Transferees;

Our Class A Interests can only be transferred with our consent to individuals or entities that have satisfied the Class A Qualification Criteria, and, in the case of Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, only after the Subordinated Loan attributable to such Interest has been paid in full and such Interests are converted to Class A-4 Interests; and

Our Class A Interests cannot be transferred to employee benefit plans, IRAs or Plans (as defined herein).
See “Shares Eligible for Future Sale” beginning on page 179 for additional information related to the transfer restrictions imposed on our Class A Interests.
U.S. federal income tax
consequences to
U.S. Holders
For a description of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of the
 
35

 
Class A Interests to U.S. Holders, please see “Material U.S. Federal Income Tax Consequences to U.S. Holders” herein.
Certain ERISA Considerations
See “Certain ERISA Considerations” for information relating to the purchase and transfer restrictions on employee benefit plans, IRAs and other Plans (as defined therein).
Maximum Investment Limits and Financial Suitability
An investment in Class A Interests is subject to certain maximum investment limits, some of which are based on financial suitability. See “Plan of Distribution — Offering Process — Maximum Investment Limits and Financial Suitability.”
Risk factors
You should read “Risk Factors” for a discussion of factors you should carefully consider before deciding to invest in our Class A Interests.
Order/Investment Commitment submission deadline
Prospective investors must have submitted their qualification application to us by the submission deadline, which is currently January 31, 2025, but may be sooner at our sole discretion depending upon market conditions.
Liquidation
In the event of a sale, liquidation, dissolution or winding up of Bally’s Chicago OpCo, including a change of control, after payment or provision for payment of Bally’s Chicago OpCo’s debt and liabilities, including any amounts due under Bally’s Chicago OpCo’s senior indebtedness, each LLC Interest will be entitled to receive a proportionate interest in the net assets of Bally’s Chicago OpCo. In turn, the interests in the net assets of Bally’s Chicago OpCo received by Bally’s Chicago, Inc. will be used to pay Bally’s Chicago, Inc.’s debts and liabilities, including any amounts under any senior indebtedness and the Subordinated Loans owed by us at the time of such liquidation. Each Class A Interest will be entitled to receive a proportionate interest in the net assets remaining for distribution to holders of Class A Interests. Class B Interests hold no economic interest in Bally’s Chicago, Inc. See “Description of Capital Stock.”
The number of our shares of stock to be outstanding after this offering and the concurrent private placements is based on 100 common stock outstanding as of September 30, 2024. Upon the closing of this offering and the concurrent private placements and the consummation of the Transactions, all of our outstanding common stock will be reclassified into Class B Interests (the “Common Stock Reclassification”). See “Our Organizational Structure.
Except as otherwise indicated, all information in this prospectus assumes or gives effect to:

no purchases of Class A Interests by Bally’s Corporation in this offering;

the Intercompany Notes Cancellation;

the Post-IPO Capital Commitment;

the issuance of 29,900 Class B Interests to Bally’s Chicago HoldCo at $0.001 per Class B Interest;

the issuance of        Class A-1 Interests,         Class A-2 Interests,        Class A-3 Interests, and        Class A-4 Interests to the private placement investors upon the closing of the concurrent private placements;

the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws prior to the closing of this offering; and

the Common Stock Reclassification.
 
36

 
QUESTIONS AND ANSWERS
Q:
What is our business?
A:
We are a gaming, hospitality and entertainment company with the singular focus of building and operating a world-class entertainment destination resort in Chicago, Illinois. We intend to provide both Chicago residents and business and leisure travelers visiting Chicago with physical and interactive entertainment and gaming experiences.
Q:
What are the securities that we are offering?
A:
We are offering our Class A Interests. Upon the closing of this offering and the concurrent private placements and the consummation of the Transactions, we will have five classes of stock: Class A-1 Interests, Class A-2 Interests, Class A-3 Interests, Class A-4 Interests and Class B Interests. Class B Interests are not being offered hereby, and will be held exclusively by Bally’s Chicago HoldCo. The rights of the holders of Class A Interests and Class B Interests will be identical, except with respect to the impact of the Subordinated Loans attributable to Class A-1 Interests, Class A-2 Interests and Class A-3 Interests described below and Class B Interests have no economic interest in Bally’s Chicago, Inc. Each Class A Interest and each Class B Interest is entitled to one vote per share on all matters submitted to a vote of stockholders. Following the closing of this offering and the concurrent private placements and the consummation of the Transactions, as the sole holder of our Class B Interests, Bally’s Chicago HoldCo will hold 75% of the voting power in the Company. We will be permitted, but not required, to pay dividends on our Class A Interests. Holders of our Class B Interests will not be entitled to participate in distributions declared by our Board. See “Dividend Policy.
Q:
Are there any risks associated with an investment in our Class A Interests?
A:
Yes. Our Class A Interests are highly risky and speculative. Investing in our Class A Interests should be considered only by persons who can afford the loss of their entire investment. Additionally, our Class A Interests will not be listed on any national securities exchange or on any other stock exchange, regulated trading facility or automated dealer quotation system in the United States or internationally. There is no trading market for our Class A Interests and an active market for our Class A Interests will not likely develop in the future. As such, our Class A Interests will have limited liquidity and holders of our Class A Interests may not be able to monetize their full investment in our Class A Interests, if at all.
Our Class A Interests are also subject to restrictions on transferability and redemption provisions, each of which will individually and in the aggregate materially impact the ability of holders of our Class A Interests to transfer their Class A Interests following the closing of this offering. Our Class A Interests can only be transferred without our consent to Permitted Transferees. Additionally, our Class A Interests can only be transferred with our consent to individuals or entities that have satisfied the Class A Qualification Criteria, and, in the case of Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, only after the Subordinated Loan attributable to such Interest has been paid in full and such Interests are converted to Class A-4 Interests. See “Shares Eligible for Future Sale” beginning on page 179. Class A Interests also cannot be transferred to employee benefit plans, IRAs and other Plans (as defined herein). See “Certain ERISA Considerations.”
Our Class A Interests are shares of stock in Bally’s Chicago, Inc. and do not constitute indebtedness. As such, our Class A Interests will rank junior to all indebtedness, including the Subordinated Loans, and other non-equity claims on our business with respect to assets available to satisfy claims, including in a liquidation of the Company.
In addition, pursuant to the terms of our amended and restated certificate of incorporation to be in effect prior to the closing of this offering, so long as there are Subordinated Loans outstanding that are attributable to each of our various Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, any cash available for distribution that would otherwise be paid to holders of our Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, as applicable, will be required to be used for the repayment
 
37

 
of principal and accrued interest on the corresponding Subordinated Loans owed by us. Therefore, even if our Board (or a duly authorized committee of the Board) authorizes and declares a dividend on our shares of stock, holders of our Class A-1 Interests, Class A-2 Interests and Class A-3 Interests will not be entitled to receive any such dividend until such time as the corresponding Subordinated Loans associated with such Class A Interests are paid in full, which may take a prolonged period of time to occur, if at all.
Our Subordinated Loans will accrue interest at a rate of 11.0% per annum, compounding quarterly, and accrued and unpaid interest will be added to the outstanding principal amount thereof on a quarterly basis. As a result, the amount of Subordinated Loans that are to be paid with a percentage of the amounts that would otherwise be paid on account of Class A-1 Interests, Class A-2 Interests and Class A-3 Interests will increase during the period between the closing date of this offering and the date, if any, on which dividends are to be paid on the Class A-1 Interests, Class A-2 Interests and Class A-3 Interests.
Due to the significant amount of indebtedness (including both principal and interest) owed on the Subordinated Loans, we do not expect to fully repay the Subordinated Loans for an extended period of time following the closing of this offering, if at all. As such, holders of Class A-1 Interests, Class A-2 Interests and Class A-3 Interests may not directly receive the cash dividends or other distributions that otherwise would have been payable on such Class A-1 Interests, Class A-2 Interests and Class A-3 Interests for an equivalently long period of time, if at all, or realize any accretion in value above the initial amount invested. Moreover, the value of the principal and accrued interest on the Subordinated Loans could exceed the value of the Class A-1 Interests, Class A-2 Interests and Class A-3 Interests otherwise payable upon a sale of the business, resulting in holders of the Class A-1 Interests, Class A-2 Interests and Class A-3 Interests receiving nothing upon such a sale. See “Risk Factors.”
Q:
Will investors purchasing Class A Interests receive dividends?
A:
Upon the closing of this offering and the concurrent private placements and the consummation of the Transactions, we will be a holding company, and our principal asset will be the LLC Interests we purchase from Bally’s Chicago OpCo. If we decide to make a distribution in the future, we would need to cause Bally’s Chicago OpCo to make distributions to us in an amount sufficient to cover the repayment of the IPO Expense Note, future borrowings plus such distribution. If Bally’s Chicago OpCo makes such distributions to us, the other holders of LLC Interests will be entitled to receive pro rata distributions.
In addition, Bally’s Chicago OpCo will report as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, any taxable income of Bally’s Chicago OpCo will be allocated to holders of LLC Interests, including us. Accordingly, we will incur income taxes on our allocable share of any net taxable income of Bally’s Chicago OpCo. Under the terms of the Bally’s Chicago OpCo LLC Agreement, Bally’s Chicago OpCo will be obligated to make tax distributions to holders of LLC Interests, including us, to the extent it has distributable cash. In addition to tax expenses, we will also incur expenses related to our operations, which we expect could be significant. We intend, as its managing member, to cause Bally’s Chicago OpCo to make cash distributions to the owners of LLC Interests in an amount sufficient to (1) fund all or part of their tax obligations in respect of taxable income allocated to them and (2) cover our operating expenses. However, Bally’s Chicago OpCo’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which Bally’s Chicago OpCo is then a party, including any debt or financing agreements, or any applicable law, or that would have the effect of rendering Bally’s Chicago OpCo insolvent. If we do not have sufficient funds to pay tax or other liabilities or to fund our operations, we may have to borrow funds, including potentially from Bally’s and its affiliates if available, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. See “Risk Factors — Risks related to our organizational structure — Our principal asset after the completion of this offering and the concurrent private placements will be our interest in Bally’s Chicago
 
38

 
OpCo, and, as a result, we will depend on distributions from Bally’s Chicago OpCo to pay our taxes and expenses. Bally’s Chicago OpCo’s ability to make such distributions may be subject to various limitations and restrictions.
Furthermore, we intend to, as its managing member, cause Bally’s Chicago OpCo to make distributions of OpCo cash available for distribution on a quarterly basis. We define OpCo cash available for distribution as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock-based compensation, gain or loss on asset disposals or impairment, and certain other unusual or non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in the fair value of derivatives, if applicable, less payments made on senior indebtedness, capital expenditures, cash taxes, rent without duplication and changes in working capital and cash used for acquisitions and dispositions. We do not expect any such distributions until after the permanent resort and casino is fully operational and generates cash flow.
In turn, we intend to distribute cash available for distribution to the holders of our Class A Interests (subject to certain requirements discussed below). Holders of our Class B Interests will not be entitled to participate in distributions declared by our Board. We define cash available for distribution as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock-based compensation, gain or loss on asset disposals or impairment, and certain other unusual or non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in the fair value of derivatives, if applicable, less payments made on senior indebtedness, capital expenditures, cash taxes, rent without duplication and changes in working capital and cash used for acquisitions and dispositions. Cash that is distributed to holders of our Class A Interests will be distributed pro rata according to the number of Class A-1 Interests, Class A-2 Interests, Class A-3 Interests and Class A-4 Interests outstanding at the time of such distribution. Given the capital intensity of developing, constructing, opening and operating a casino resort project of this scale, we currently expect that Bally’s Chicago OpCo will not have any OpCo cash available for distribution until approximately three to five years after our permanent resort and casino begins operations. However, this may fluctuate depending on Bally’s Chicago OpCo’s ability to generate cash from operations and its cash flow needs, which, among other things, may be impacted by debt service payments on its senior indebtedness, capital expenditures, potential expansion opportunities and the availability of financing alternatives, the need to service any future indebtedness or other liquidity needs and general industry and business conditions, including the pace of the construction and development of our permanent resort and casino in Chicago.
Pursuant to the terms of our amended and restated certificate of incorporation to be in effect prior to the closing of this offering, so long as there are Subordinated Loans outstanding that are attributable to each of our various Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, any cash available for distribution that would otherwise be paid to holders of our Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, as applicable, will be required to be used for the repayment of principal and accrued interest on the corresponding Subordinated Loans owed by us. The Subordinated Loans will bear interest at a rate equal to 11.0% per annum, compounding quarterly, will be pre-payable at any time without a premium or penalty at a prepayment price equal to the principal amount thereof plus accrued interest, and will have no maturity date. See “Subordinated Loans” for more information on the Subordinated Loans.
If the principal and interest of any of the Subordinated Loans have been paid in full, by distributions from Bally’s Chicago OpCo or any other means, we intend to distribute to holders of the corresponding Class A Interests with respect to any such Subordinated Loan an amount equal to 100% of the applicable distribution specified above in the form of a direct cash dividend.
While we intend, as its managing member, to cause Bally’s Chicago OpCo to make distributions on a quarterly basis once it is able to generate OpCo cash available for distribution approximately three to five years after our permanent resort and casino begins operations, we and Bally’s Chicago OpCo have not adopted a formal written dividend or distribution policy to pay a fixed amount of cash regularly or to pay any particular amount based on the achievement of, or derivable from, any specific financial metrics, including OpCo cash available for distribution. Further, we and Bally’s Chicago OpCo are not contractually obligated to pay any dividends or make any distributions and do not have any required
 
39

 
minimum quarterly dividend or distribution, except for tax-related distributions described above. Our and Bally’s Chicago OpCo’s distributions may vary from quarter to quarter, may be significantly reduced or may be eliminated entirely. While we and Bally’s Chicago OpCo intend to make distributions equal to 100% of the cash available for distribution and OpCo cash available for distribution, respectively, on a quarterly basis, the actual amount of any distributions may fluctuate depending on our and Bally’s Chicago OpCo’s ability to generate cash from operations and our and Bally’s Chicago OpCo’s cash flow needs, which, among other things, may be impacted by debt service payments on our or Bally’s Chicago OpCo’s senior indebtedness, capital expenditures, potential expansion opportunities and the availability of financing alternatives, the need to service any future indebtedness or other liquidity needs and general industry and business conditions, including the pace of the construction and development of our permanent resort and casino in Chicago. Our Board will have full discretion on how to deploy cash available for distribution, including the payment of dividends. Any debt we or Bally’s Chicago OpCo may incur in the future is likely to restrict our and Bally’s Chicago OpCo ability to pay dividends or distributions, and such restriction may prohibit us and Bally’s Chicago OpCo from making distributions, or reduce the amount of cash available for distribution and OpCo cash available for distribution. In addition, Delaware law imposes requirements that may restrict our ability to pay dividends to holders of our shares. See “Risk Factors — Risks Related to this Offering and Ownership of our Class A Interests — You may not receive dividends or other distributions on the Class A Interests” and “Dividend Policy.”
Q:
Will investors purchasing Class A Interests be parties to the subordinated loan agreement?
A:
No. Bally’s Chicago OpCo, as lender, will make the Subordinated Loans to us, as borrower, in various tranches and in varying amounts based on the total number of Class A-1 Interests, Class A-2 Interests and Class A-3 Interests sold in this offering. None of the new investors purchasing Class A Interests in this offering will be a party to the subordinated loan agreement, or a borrower or lender under the Subordinated Loans. The Subordinated Loans will be non-recourse to the holders of our Class A Interests.
Q:
Will we offer additional equity securities in the future?
A:
While we do not currently intend to issue any additional securities in the future, we may be required to do so from time to time in order to continue to fund our operations. To the extent we decide to issue additional Class A Interests or Class B Interests in the future, we may be required to offer you an opportunity to participate pro rata in the offering in order for such offering not to dilute the ownership of individuals meeting the Class A Qualification Criteria below the minimum 25% requirement under the Host Community Agreement. However, to the extent that you determine that you either do not want to participate or cannot participate in any such offering, you will suffer immediate dilution to the extent such offering is completed without your participation. Additionally, we cannot guarantee that we will offer financing options similar to the Subordinated Loans, which would significantly increase the costs of any future investment.
Q:
Will you file separate periodic reports with the SEC?
A:
Yes. Bally’s Chicago, Inc. will be a registered SEC filer and thus is subject to the periodic reporting requirements of the SEC.
Q:
How will my Class A Interests be treated for United States federal income tax purposes?
A:
Class A Interests are to be treated as stock in Bally’s Chicago, Inc. for United States federal income tax purposes. For a discussion of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of our Class A Interests to U.S. Holders, please see “Material U.S. Federal Income Tax Consequences to U.S. Holders” herein.
Q:
How are the Class A Interests being offered?
A:
Our Class A Interests are being offered on a best efforts basis, by and through our placement agents
 
40

 
(listed on the cover page of this prospectus). There is no minimum number of Class A Interests to be sold or minimum aggregate offering proceeds for this offering to close. The process for placing orders in this offering is different from that used for most public offerings of equity securities. You should carefully read the section entitled “Plan of Distribution — Offering Process” for additional information regarding how to place an order for our Class A Interests.
Q:
Will I receive a certificate for my Class A Interests?
A:
No. The Class A Interests will be issued in book-entry form only, and not in physical form. BitGo Trust (as defined below) will act as our registrar and transfer agent for our Class A Interests. Our Class A Interests will be held in book-entry form only on our books and records, and any transfers of our Class A Interests must be made through an account with BitGo Trust, a vendor that we have contracted to administer the books and records of our registrar.
Q:
Will the Class A Interests be listed on an exchange?
A:
Our Class A Interests will not be listed on a stock exchange such as the New York Stock Exchange or Nasdaq. Additionally, there is no trading market for our Class A Interests and, due to transferability restrictions, an active market for our Class A Interests will not likely develop in the future.
Therefore, our Class A Interests will have limited liquidity and holders of our Class A Interests may not be able to monetize their full investment in our Class A Interests, if at all.
Q:
Can I purchase Class A Interests using my existing brokerage account?
A:
No. In order to purchase our Class A Interests, investors will be required to open an account with BitGo Trust. You will not be able to purchase or sell any Class A Interests through any other brokerage account or any exchange or trading system. See “Plan of Distribution — Offering Process.
Q:
What is Loop Capital Markets LLC and what role do they play in the offering and subsequent trading market?
A:
Loop Capital Markets LLC is serving as lead placement agent, along with other financial institutions, in this offering. Placement agents are financial specialists who work closely with issuers of securities to determine the initial offering price of the securities and solicit offers from investors to purchase the securities via the placement agents’ distribution network.
Q:
How can I sell my Class A Interests if I decide that I no longer wish to hold them?
A:
You cannot freely sell your Class A Interests. Each Class A Interest is subject to strict controls that limit transferability.
Our Class A Interests can only be transferred without our consent to Permitted Transferees. Additionally, our Class A Interests can only be transferred with our consent to individuals or entities that have satisfied the Class A Qualification Criteria, and, in the case of Class A-1 Interests, Class A-2 Interests and Class A-3 Interests, only after the Subordinated Loan attributable to such Interest has been paid in full and such Interests are converted to Class A-4 Interests. In order to attempt to transfer your Class A Interests, you will be required to submit an application for sale to us. See “Shares Eligible for Future Sale” beginning on page 179. Class A Interests also cannot be transferred to employee benefit plans, IRAs and other Plans (as defined herein). See “Certain ERISA Considerations.”
Q:
Do you or Bally’s get to participate in this offering as an investor?
A:
No. Neither we nor the officers, directors, employees, promoters or affiliates of us or Bally’s will be allowed to purchase any Class A Interests in this offering or execute trades in the secondary market for our or their own accounts through the placement agents. Bally’s ownership (through Bally’s Chicago HoldCo, its wholly-owned subsidiary) is limited to Class B Interests.
 
41

 
Q:
What is the relationship between us and Bally’s Corporation?
A:
We were incorporated on May 24, 2022 as a wholly-owned subsidiary of Bally’s. Following the closing of this offering and the concurrent private placements and the consummation of the Transactions, Bally’s Chicago HoldCo, a wholly-owned subsidiary of Bally’s, will own 75% of our outstanding shares through their ownership of all of our outstanding Class B Interests. We are currently dependent on Bally’s for a majority of our working capital and financing requirements. As of September 30, 2024, Bally’s Chicago OpCo owes $631.0 million in Pre-IPO Intercompany Notes to Bally’s and various of its subsidiaries. The Pre-IPO Intercompany Notes have borne and bear interest at a rate equal to 0.0% per annum and are scheduled to mature on December 31, 2025, but all portions that remain outstanding are expected to be extinguished and contribute towards Bally’s commitment to purchase 30,000 LLC Interests for $750.0 million representing 75.0% of the economic interest in Bally’s Chicago OpCo.
We intend to use all of the net proceeds from this offering, together with the proceeds from the concurrent private placements, the Subordinated Loans and the IPO Expenses Note, to purchase 10,000 LLC Interests directly from Bally’s Chicago OpCo at a price per unit equal to the stated value of $25,000 per Class A Interest, which is equal to the amount paid by investors in this offering plus the corresponding amount of Subordinated Loans attributable to each Class A Interest. The 10,000 LLC Interests we purchase will represent 25.0% of the economic interest in Bally’s Chicago OpCo and the Class A Interests will represent 25.0% of the voting power and 100.0% of the economic interest in Bally’s Chicago, Inc.
Bally’s Chicago OpCo intends to use the proceeds it receives from the sale of LLC Interests to us to repay $250.0 million outstanding aggregate amount under the Pre-IPO Intercompany Notes. In addition, Bally’s Chicago OpCo intends to issue 30,000 LLC Interests to Bally’s Chicago HoldCo, at a price per LLC Interest equal to the stated value of $25,000 per Class A Interest, which is equal to the amount paid by investors in this offering plus the corresponding amount of Subordinated Loans attributable to each Class A Interest, in satisfaction of the $381.0 million Intercompany Notes Cancellation and the $369.0 million Post-IPO Capital Commitment. Upon the closing of this offering, we intend to effect the Common Stock Reclassification and issue an additional 29,900 Class B Interests to Bally’s Chicago HoldCo at $0.001 per Class B Interest. The 30,000 LLC Interests issued by Bally’s Chicago OpCo to Bally’s Chicago HoldCo from the Intercompany Notes Cancellation and the Post-IPO Capital Commitment, will represent 75.0% of the economic interest in Bally’s Chicago OpCo and the 30,000 Class B Interests that will be held by Bally’s Chicago HoldCo will represent 75.0% of the voting power and no economic interest in Bally’s Chicago, Inc. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations and — Liquidity and Capital Resources.
In January 2023, Bally’s Chicago OpCo and certain subsidiaries of Bally’s Corporation entered into the Permanent Services Agreement with BMG, a subsidiary of Bally’s Corporation. Pursuant to the Permanent Services Agreement, BMG agreed to provide us and certain subsidiaries of Bally’s Corporation with general business support services, including services relating to external reporting obligations, internal audit, regulatory filings, design and construction, business development, human resources, tax, accounting, treasury and capital related, risk management, legal, finance and marketing upon the opening of our permanent resort and casino. Pursuant to the Permanent Services Agreement, we agreed to pay BMG an annual fee equal to the salaries, burden, overhead and other operating costs for providing such services based on our share of those costs calculated by reference to an appropriate common-size metric plus 6%, which fee may be reviewed and adjusted by the parties from time to time to reflect current market rates for such services and as required by the Code. The initial term of the agreement is one year, beginning upon the opening of our permanent resort and casino, and will be automatically renewed for successive one-year terms, unless either party serves on the other a written notice of termination. See “Transactions with Related Persons — Permanent Services Agreement.
In addition, in August 2023, Bally’s Chicago OpCo entered into the Temporary Services Agreement with BMG, a subsidiary of Bally’s Corporation. Pursuant to the Temporary Services Agreement, BMG agreed to provide us with general business support services, including services relating to external reporting obligations, internal audit, regulatory filings, design and construction, business development,
 
42

 
human resources, tax, accounting, treasury and capital related, risk management, legal, finance and marketing related to our temporary casino. Pursuant to the Temporary Services Agreement, we agreed to pay BMG a monthly fee equal to $5.0 million, which fee may be reviewed and adjusted by the parties from time to time to reflect current market rates for such services and as required by the Code. The initial term of the agreement is two years, beginning August 30, 2023, and will be automatically renewed for successive one-year terms for as long as our temporary casino is licensed to continue operations, unless BMG serves on Bally’s Chicago OpCo a written notice of termination. The Temporary Services Agreement shall automatically terminate when our temporary casino permanently closes and our permanent resort and casino opens to the public. See “Transactions with Related Persons — Temporary Services Agreement.
We and Bally’s Chicago HoldCo, our direct parent and the entity that will hold all of our Class B Interests after the closing of this offering, as well as all other current and future direct unrestricted subsidiaries of Bally’s Corporation under its credit facilities and bond indentures, will guarantee Bally’s Chicago OpCo’s obligations under the GLP Lease Agreement and GLP Development Agreement; provided, however, that at such time as Bally’s Chicago OpCo becomes a restricted subsidiary under Bally’s Corporation’s credit facilities and bond indentures, (i) Bally’s Corporation (or its Parent Company (as defined in Bally’s Corporation’s existing master lease agreement with GLP), if any, following a Control Transaction (as defined in the GLP Term Sheet)) will be required to guarantee the GLP Lease Agreement and GLP Development Agreement and (ii) following the delivery of such guarantee, the guarantees of the GLP Lease Agreement and GLP Development Agreement provided by Bally’s Chicago HoldCo and such other unrestricted subsidiaries of Bally’s Corporation shall terminate.
In connection with Bally’s Chicago HoldCo’s commitment to guarantee the GLP Lease Agreement and GLP Development Agreement, and in partial consideration for certain investments by Bally’s Corporation and its subsidiaries into Bally’s Chicago OpCo, we and Bally’s Chicago OpCo intend to guarantee all of Bally’s Corporation’s indebtedness upon Bally’s Corporation’s (or its Parent Company’s (as defined in Bally’s Corporation’s existing master lease agreement with GLP), if any, following a Control Transaction (as defined in the GLP Term Sheet)) guaranteeing the GLP Lease Agreement and the GLP Development Agreement or upon request from Bally’s Corporation; provided that, at any time after such guarantee by Bally’s Corporation (or its Parent Company) or such request from Bally’s Corporation, upon request of Bally’s Chicago OpCo, Bally’s Corporation will guarantee Bally’s Chicago OpCo’s obligations under any lease obligations outstanding at such time, including any obligations under the Oak Street Lease Agreement or, if entered into, the GLP Lease Agreement and the GLP Development Agreement, to the maximum extent permitted under the instruments governing Bally’s Corporation’s indebtedness (assuming full borrowing of all outstanding commitments under Bally’s Corporation’s revolving credit facilities outstanding at such time). Furthermore, we and Bally’s Chicago OpCo intend to enter into the Guarantee Agreement with Bally’s Corporation, pursuant to which, at any time in the future, upon request from Bally’s Corporation, we and Bally’s Chicago OpCo will guarantee, and cause each of our wholly-owned subsidiaries to guarantee, any additional indebtedness that Bally’s Corporation enters into at any time in the future. See “Transactions with Related Persons — Guarantee of Bally’s Corporation’s Indebtedness.
 
43

 
SUMMARY HISTORICAL AND PRO FORMA CONDENSED CONSOLIDATED FINANCIAL AND OTHER DATA
The following tables present the summary historical and pro forma condensed consolidated financial and other data for Bally’s Chicago, Inc. Bally’s Chicago Operating Company, LLC is a consolidated subsidiary of Bally’s Chicago, Inc. for financial reporting purposes. The summary statements of operations and statements of cash flows data for the year ended December 31, 2023 and for the period from May 24, 2022 (date of inception) to December 31, 2022, and the summary balance sheet data as of December 31, 2023 and 2022, are derived from the audited consolidated financial statements of Bally’s Chicago, Inc. included elsewhere in this prospectus. The summary statements of operations and statements of cash flows data for the nine months ended September 30, 2024 and 2023, and the summary balance sheet data as of September 30, 2024 are derived from the unaudited condensed consolidated financial statements of Bally’s Chicago, Inc. included elsewhere in this prospectus. The unaudited condensed consolidated financial statements of Bally’s Chicago, Inc. have been prepared on the same basis as the audited consolidated financial statements and, in our opinion, include all adjustments, consisting of normal recurring adjustments, necessary to present fairly in all material respects our financial position and results of operations. The results for any interim period are not necessarily indicative of the results that may be expected for the full year. Historical results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period. The information set forth below should be read together with “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Use of Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Our Organizational Structure” and the audited financial statements and the accompanying notes included elsewhere in this prospectus.
The summary unaudited pro forma condensed consolidated financial information of Bally’s Chicago, Inc. presented below has been derived from our unaudited pro forma condensed consolidated financial information included elsewhere in this prospectus. The following summary unaudited pro forma condensed consolidated balance sheet as of September 30, 2024 and the unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2024 and the year ended December 31, 2023 give effect to the Transactions and the other events set forth in “Our Organizational Structure,” including the consummation of this offering and the concurrent private placements, the use of the net proceeds therefrom and related transactions, as described in “Use of Proceeds” and “Unaudited Pro Forma Condensed Consolidated Financial Information,” as if they all had occurred on January 1, 2023 with respect to the statements of operations data, and September 30, 2024 with respect to the balance sheet data. The summary unaudited pro forma condensed consolidated financial information includes various estimates which are subject to material change and may not be indicative of what our operations or financial position would have been had this offering, the concurrent private placements and related transactions taken place on the dates indicated, or that may be expected to occur in the future. See “Unaudited Pro Forma Condensed Consolidated Financial Information” for a complete description of the adjustments and assumptions underlying the summary unaudited pro forma condensed consolidated financial information. The presentation of the summary unaudited pro forma condensed consolidated financial information is prepared in conformity with Article 11 of Regulation S-X.
Bally’s Chicago, Inc.
Pro Forma
Bally’s Chicago, Inc. Historical
Nine Months
ended
September 30,
Year Ended
December 31,
Nine Months Ended
September 30,
Year Ended
December 31,
Period from
May 24, 2022 to
December 31,
$ In thousands, except share and per
share data
2024
2023
2024
2023
2023
2022
Summary Statements of Operations
Revenue:
Gaming
$        $        $ 86,851 $ 6,493 $ 28,734 $
Non-gaming
9,786 687 3,443
Total revenue
96,637 7,180 32,177
 
44

 
Bally’s Chicago, Inc.
Pro Forma
Bally’s Chicago, Inc. Historical
Nine Months
ended
September 30,
Year Ended
December 31,
Nine Months Ended
September 30,
Year Ended
December 31,
Period from
May 24, 2022 to
December 31,
$ In thousands, except share and per
share data
2024
2023
2024
2023
2023
2022
Operating costs and expenses:
Gaming
44,322 3,022 13,430
Non-gaming
5,928 312 2,138
General and administrative
45,398 25,418 36,441 15,057
Management fees to Bally’s Corporation
45,000 5,659 20,680 424
Loss on sale-leaseback
150,000
Depreciation and
amortization
13,633 1,420 5,705
Total operating costs and expenses
304,281 35,831 78,394 15,481
Loss from operations
(207,644) (28,651) (46,217) (15,481)
Other income (expense):
Interest income
1,466 2,084 2,778
Interest expense, net of amounts capitalized
(6,891) (10,514) (13,819) (2,031)
Other non-operating income (expenses), net
893 893 414
Total other expense, net
(5,425) (7,537) (10,184) (1,617)
Loss before provision for income taxes
(213,069) (36,188) (56,365) (17,098)
Benefit for income taxes
Net loss
(213,069) (36,188) (56,365) (17,098)
Net (loss) attributable to non-controlling interest
Net (loss) attributable to Bally’s
Chicago, Inc.
$ $ $ (213,069) $ (36,188) $ (56,365)