A very Chicago gamble
46 comments
·January 24, 2025Animats
MichaelZuo
One thing I don’t get about Hollywood accounting is how do they manage to get credible people/companies to sign off on their books year after year…?
(Especially for those owned by listed companies)
And how can the studios and various deal brokers apparently act as if GAAP, FASB, and the SEC don’t exist.
adrianparsons
This was an aside at the end of the article, but what an interesting strategy:
I bought the stock for the same reason I buy stock in every hotel, airline, bank, and similar I use: in the unlikely event a not-particularly-high-stakes poker player has a routine customer service complaint, Investor Relations is available as an escalation strategy, over e.g. hotel staff who might be long-since inured to listening to complaints from people who lost money in a casino.
ajkjk
He's written a bunch about this approach. Not sure where the main article is but here's one: https://www.kalzumeus.com/2017/09/09/identity-theft-credit-r...
pc86
I'm sure this works if you're buying a couple thousand shares at a time but I don't think buying 10 shares of Southwest is going to make them listen to you any more or less when you have an issue on your flight.
pie_flavor
It doesn't matter whether they actually value you any more. The point is that investor relations is staffed by competent people, as opposed to customer service which is staffed by incompetent people as an intentional matter of efficient human capital allocation. So you can get much more reliable help if you can present the right class signals, and if you are at least theoretically allowed to call that line.
icedchai
Do you think they're going to ask for proof and how many shares you own? Anyone can claim to be an "investor."
wging
I think the idea is to take advantage of certain legal obligations that are triggered by ownership of any size.
plagiarist
Could you give some examples? I have no idea what legal differences would provide a benefit during customer interactions.
patio11
They literally have no computer system that can tell them the difference between you and a hedge fund manager, and so an email to IR fairly reliably gets the white glove treatment. I used to send them on behalf of, cliched but accurately, Kansan pensioners to banks, in at least one case justified by “I am a shareholder because my IRA holds SPY, which holds your common. It was therefore with great displeasure that…”
(Obviously one can still email IR without actually owning a share, but I both prefer not lying and also enjoy the aesthetics of capitalism, which are extremely invested—ba dum bum—in seeing someone who owns one share as a shareholder.)
Anyhow: bored person, near top of org chart, with access to escalation group if that exists, who earns six figures and really wants you to come away from the experience satisfied. Exists in almost every publicly traded company in America.
_--__--__
That was a slightly unfortunate choice of example because my groggy Friday-afternoon mind assumed 'Kan-san' was some sort of polite and idiomatic term for 田舎 dwellers and wasted a few minutes trying to figure out what it was short for.
nfriedly
Holy fuck that's a terrible deal they offered on the $250 shares! Made up billion-dollar valuation aside, an 11% interest rate on a $24,750 loan means that it's never going to pay for itself and start producing a return for the owner, even at casino-level profits.
joezydeco
Bally's built a temporary casino in Chicago while the official one is getting funded up and built. Because, you know, you can't let that gaming license just sit there and do nothing.
Sadly the temporary casino is only taking about 60% of projected revenue so far.
https://www.yogonet.com/international/news/2024/10/16/82112-...
Bally blames the location and lack of parking and yadda yadda yadda, but Illinoisans are just saturated with gambling options right now. The suburban casinos, the Indiana casinos, Wisconsin first-nations Bingo, Illinois Lotto, the multi-state lotteries, home-rule gaming in restaurants and bars, online sports betting...we still have horse racing here for crying out loud. And, oh yeah, weed is legal here.
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bluedino
How could the people of Chicago possibly think a casino is going to improve things?
tedivm
There's a lot of interesting stuff in here, but there's also a lot of garbage. Talking about the African American community in Chicago, but then using examples from LA to prove a point, is at best a horrible argument and at worst purposefully misleading.
I live in the Chicago South Side, in a neighborhood that is 99% black. I am not black. There are no pogroms happening here against people who aren't black, even if they do happen to own a business. This is just such a weird statement to have to make.
patio11
I could have quoted the roadshow verbatim in support of the point, but it felt tangential. The point is not “Chicago is on the precipice of a pogrom.” It is “political elites in Chicago’s African American community believe the community is impoverished in part because of extractive practices of vice entrepreneurs, and required as a condition of their political assent that Chicago keep equity ownership of a vice business in their community.”
The point is a true one; this _really is_ what some community leaders believe. This belief _really is_ why Chicago is doing this program.
> “Tonight is about a new opportunity on how to participate, about not just being a consumer but to be an owner,” Ald. Ronnie Mosley (21st Ward) said at the pulpit in front of the crowd of a couple hundred people.
https://thetriibe.com/2025/01/chicagos-black-residents-can-i...
There is much more support for that having actually been the sales pitch and political compromise there and elsewhere on the record.
And yes, this is a belief with a long and storied history in American politics.
dnissley
The story plays them up too much, but such tensions definitely exist. They just rarely erupt to the surface. Here's a story that did happen in Chicago which I don't think corroborates the narrative, but does add some color to it: https://www.nytimes.com/2020/10/15/business/beauty-store-rac...
shigawire
As with most Chicago critics, there are valid points to be made but it often feels too gleeful.
goat_whisperer
I agree. That part was way off base.
likeabatterycar
> I live in the Chicago South Side, in a neighborhood that is 99% black. I am not black.
May I ask why? This seems like a deliberate choice. It is, at best, met with suspicion by other residents.
kasey_junk
I lived in a south side neighborhood that was >80% black and am white for nearly 20 years.
I lived there for a variety of reasons that weren’t suspicious at all like price, location, commute, etc. my neighbors didn’t seem particularly suspicious of the decision…
tedivm
All of my neighbors seem to like me. The specific area I'm in has a 14% vacancy rate, so the people around here aren't worried about gentrification. I'm walking distance to the Metra. My wife has family in Indiana, and not having to drive through the entire city to see them was also a factor.
recursive
Why not? Everyone has to live somewhere. If it wasn't there, it would be somewhere else.
readthenotes1
I'm pretty sure hen wasn't given a deliberate choice whether to be Black or not.
somanyphotons
I'm pretty sure the question was about choice of location
likeabatterycar
> Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
Chicago is an extremely segregated city. In segregated cities, there is a nuanced thought process one must undergo to move into an area where you are considered an outsider. In Seattle for example, the tech community is overall reviled for having gentrified the Central District, where historically black areas were bulldozed to erect overpriced cardboard apartments for tech plebes. This is a legitimate question.
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notinchicago
[flagged]
goat_whisperer
Not only are you making a lot of assumptions here, you have a woeful ignorance of Chicago neighborhoods but throw out names of neighborhoods like you're an expert (perhaps obtained from listening to Drill records or something).
Also, Beverly is one of the most integrated neighborhoods in Chicago, and it isn't even majority Black, so not sure why you even mention it. It also isn't 'adjacent' to Bronzeville unless you ignore all of the neighborhoods between them.
kevinventullo
I’m a white guy who lived in Bronzeville for 3 years because I went to IIT… which is in Bronzeville. Was I also a gentrifier?
kasey_junk
You could check a map if you wanted to make up things to sound knowledgeable about the Southside of Chicago…
jeffgreco
Some truly hideous AI art on this one.
mplewis
I wish you'd just use stock imagery rather than the AI slop. I know there's great stuff in your blog patio11, and the AI splash image really takes away from that impression.
ryukoposting
I agree. I don't know why so many blogs feel the need to plaster disfigured AI-generated garbage across the tops of their posts now.
What does this ugly picture add to the post? A little pagerank cred? 3 inches of shit I have to scroll past, increasing "engagement?" It certainly isn't adding anything to the quality of the content.
yesfitz
I agree. AI images communicate "low effort" at best and "untrustworthy" at worst, neither of which remotely describe Bits about Money.
I've seen worse deals offered in prospectuses. But not often.
Having two tiers of stock with the insiders having the control shares used to be prohibited by the New York Stock Exchange. Now it's common. Google and Facebook are set up that way, so they have presidents for life. So are some lesser companies which really need to fire the CEO but can't.
Then, what you're buying into is not the operating entity. It's just a holding company. Not even the parent holding company that owns many casinos; that's BALY. It's a holding company in the middle, one whose returns are totally determined by the other parts of the stack. This is much like film investing, where you can buy an interest in "Silver Screen Partners IV" and get a share of the profits from a specific film. Except that the studio and the film producer control the accounting between related entities. Those deals are generally a lose, although you get to go to the premier and meet the cast.
And then there's the leverage. When you buy in, you're under water, and may stay there. Can't speak to the tax consequences.
This is so awful it makes meme coins look good.
(Favorite worst deals: 1) being pitched on municipal bonds backed only by revenue from future sewer charges for a development not yet built, and which never was. Junk municipal bonds are a thing. 2) a San Francisco strip club that did an IPO in the first dot-com boom and went bust. SEC CIK 931799.)