Executive Summary

During 2024, Bally’s continued to expand its business by pursuing new gaming opportunities and strategically allocating capital to growth initiatives and existing operations. The company secured financing for its flagship Bally’s Chicago casino, advanced plans for the Tropicana Las Vegas redevelopment, and expanded its iGaming presence. Bally’s also disposed of portions of its international interactive business and transferred intellectual property to a trust. These steps position Bally’s as a prominent, vertically integrated iGaming company with physical casinos and online gaming solutions.

Business Development

Bally’s business development projects included securing $940 million in financing for the Bally’s Chicago casino, advancing plans to redevelop the Tropicana Las Vegas site, and expanding its iGaming operations. The company launched the Bally Bet Casino app in Rhode Island and enhanced the Bally Bet sportsbook app’s reach in 13 US states and Ontario.

Macroeconomic Factors

Bally’s business is subject to risks from global economic challenges, including the COVID-19 pandemic, conflicts, inflation, rising interest rates, and supply chain disruptions. These factors can negatively impact consumer spending and discretionary leisure activities, as well as increase Bally’s costs.

Key Performance Indicators

Bally’s primary performance metrics are consolidated Adjusted EBITDA and segment Adjusted EBITDAR, which exclude certain recurring and non-recurring items. These metrics are used to analyze performance, determine executive compensation, and evaluate the company’s ability to service debt and fund operations.

Results of Operations

Bally’s total revenue remained relatively flat in 2024 compared to 2023, with increases in the Casinos & Resorts and North America Interactive segments offsetting decreases in the International Interactive segment. Gaming and non-gaming expenses increased, while general and administrative expenses decreased. The company recorded significant impairment charges, primarily in the International Interactive segment. Overall, Bally’s reported a net loss of $567.8 million in 2024, compared to a net loss of $187.5 million in 2023.

Segment Performance

Bally’s has three reportable segments: Casinos & Resorts, International Interactive, and North America Interactive.

The Casinos & Resorts segment saw a 6% increase in revenue, driven by the inclusion of the Bally’s Chicago temporary casino, partially offset by the closure of the Tropicana Las Vegas. Adjusted EBITDAR for this segment decreased 13.6% due to weather impacts and the Tropicana Las Vegas closure.

The International Interactive segment experienced a 6.2% decrease in revenue, primarily due to the sale of the Carved-Out Business, partially offset by growth in the UK market and licensing revenue. Adjusted EBITDAR for this segment decreased 2.1%.

The North America Interactive segment saw a 77.2% increase in revenue from expanded operating jurisdictions and stronger performance in iGaming and sportsbook. Adjusted EBITDAR losses for this segment decreased from $55.7 million to $40.2 million.

Liquidity and Capital Resources

Bally’s primary sources of liquidity are cash on hand, cash flow from operations, and borrowings under its Revolving Credit Facility. The company believes existing cash, operating cash flows, and availability under the Revolving Credit Facility will be sufficient to meet funding needs.

In 2024, Bally’s net cash provided by operating activities was $114.0 million, compared to $188.6 million in 2023. Net cash provided by investing activities was $97.8 million, compared to net cash used of $207.8 million in 2023, primarily due to a decrease in capital expenditures and gaming license fees. Net cash used in financing activities was $287.8 million, compared to net cash provided of $65.8 million in 2023, mainly due to increased long-term debt repayments.

Bally’s has $95.5 million available for use under its Capital Return Program, subject to regulatory and debt agreement limitations. The company did not pay dividends in 2024 and does not currently intend to do so in the foreseeable future.

Debt and Leases

Bally’s has $1.89 billion in variable-rate debt outstanding under its Term Loan and Revolving Credit Facilities, as well as $1.49 billion in unsecured senior notes. The company has utilized interest rate swaps and collars to manage its exposure to variable interest rates.

Bally’s is also committed to various operating leases, with minimum rent payable of $4.86 billion as of December 31, 2024. This includes leases with GLPI for the real estate assets used in the operations of certain Casinos & Resorts properties, as well as the land underlying the Bally’s Lake Tahoe facility.

Capital Expenditures

In 2024, Bally’s capital expenditures were $199.8 million, compared to $311.5 million in 2023. The company’s most significant project is the development of the permanent Bally’s Chicago facility, for which it spent $133.6 million in 2024. Bally’s expects future funding for the Bally’s Chicago project to be financed through its agreement with GLPI.

Critical Accounting Estimates

Bally’s critical accounting estimates include the assessment of goodwill and intangible assets for impairment, as well as the accounting for income taxes. The company must make various assumptions and estimates when evaluating goodwill and indefinite-lived intangible assets for impairment, including future cash flow projections. Changes in these estimates could result in future impairment charges.

The company’s income tax accounting also involves significant estimates, including the allocation of shared costs and intangible assets among its subsidiaries in various jurisdictions, as well as the interpretation of tax regulations related to the Tax Cuts and Jobs Act.

Outlook

Bally’s continues to position itself as a leading, vertically integrated iGaming company with a focus on growth opportunities. The company’s development of the Bally’s Chicago casino and resort, as well as its ongoing investments in its land-based and interactive gaming operations, are expected to drive future performance. However, Bally’s remains subject to macroeconomic risks and challenges that could impact consumer spending and the company’s financial results.

Overall, Bally’s financial report highlights the company’s strategic initiatives to expand its gaming footprint and leverage its integrated platform, while also addressing the risks and uncertainties it faces in the current economic environment. The company’s performance will be closely watched by investors and analysts as it navigates these challenges and pursues its growth objectives.