CHICAGO — Deep down, an almost Regulatory filing of more than 250 pagesthe owner of Chicago’s still-unbuilt casino is warning investors that crime could have a material impact on its operations here.
Bally’s Chicago filed the closed “registration statement” on December 27 as it prepared to sell $250 million of stock, and included a warning that “business interruptions in Chicago due to crime or civil unrest could adversely affect us .” It was one of dozens of downside risks mentioned in the filing.
“It is our intent that our business and assets will be primarily located in Chicago, Illinois, a city that has recently experienced very high crime rates and civil unrest,” Bally’s said on page 54 of the filing.
The company stated that “increased crime or the perception of danger among our customers” could impact the Chicago property’s bottom line.
A new round of civil unrest could be a real problem, the company said, because “we currently do not have business interruption insurance in place.” Even “if and when” the company obtains such insurance, the policy may not cover losses.
Crain’s Chicago Business was the report first about Bally’s decision to mention crime in his file. The outlet spoke with Erick Gordon, a professor at the University of Michigan who has taught securities law.
“By disclosing the crime risk in Chicago, Bally’s says it believes the risk is high enough to warn potential investors about it,” Gordon told Crains.
“Politicians and boosters may try to downplay the crime and looting in Chicago, but when a company dependent on local goodwill and customers feels it must protect itself from lawsuits by disclosing the risk of crime and civil unrest to its operations material damage there, the city will have to face the reality of how it is perceived.”
