Bally's Corporation Announces Third Quarter 2024 Results

Bally's Corporation (NYSE:BALY) ("Bally's" or the "Company") today reported financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 and Recent Highlights

• Company-wide revenue of $630.0 million, a decrease of 0.4% year-over-year
  • Casinos & Resorts revenue of $353.4 million, down 1.6% year-over-year
  • UK online revenues grew 11.8% while overall International Interactive revenue declined 5.3% year-over-year to $230.9 million
  • North America Interactive revenue of $45.7 million, up 54.5% year-over-year
• Launched second online sportsbook in the UK under the Bally's brand, joining existing JackpotJoy offering
• Secured $940 million of construction funding for Chicago project from GLPI
• Began demolition at Tribune site in Chicago; construction remains on schedule to begin in 2025
• Subsequent to the end of the quarter, completed the controlled demolition of the Tropicana hotel towers

Summary of Financial Results

Robeson Reeves, Bally's Chief Executive Officer, commented, "Bally's delivered relatively healthy financial results in the 2024 third quarter, with consolidated revenue declining just 0.4% from the prior year to $630.0 million. On a segment basis, Casinos & Resorts ("C&R") revenue declined 1.6% year-over-year and North American Interactive revenue grew 54.5%, while International Interactive revenue declined 5.3%, including 11.8% revenue growth in our U.K. business. During the quarter, we secured a critical $940 million construction and financing arrangement with Gaming & Leisure Properties ("GLPI") which positions the Company to move forward with the construction of our flagship permanent casino in the heart of downtown Chicago, America's third largest city. Early in the fourth quarter, we also completed the controlled demolition of the Tropicana hotel towers in Las Vegas, moving the A's one step closer to the start of stadium construction and allowing Bally's to plan for the broader redevelopment of the site. Upon completion, the Chicago and Las Vegas development projects feature unique positioning in their respective markets and represent two attractive additions to our portfolio that we expect will drive positive shareholder returns.

"C&R revenue of $353.4 million in the quarter reflects the generally stable domestic regional gaming environment, although we saw flow-through decline relative to the prior year period. Results at our Chicago Temporary Casino have moderated to a somewhat consistent monthly level and we are focused on running our Chicago operations with database growth in mind. In Rhode Island, local bridge construction continues to disrupt traffic during peak periods which again impacted visitation and revenues at our flagship Lincoln property. In Atlantic City, previously noted turnover in our relationship marketing team had an adverse impact on results in the quarter which included the second half of the market's all-important summer season. Primarily reflecting these impacts, and lower-than-expected hold in Kansas City, third quarter segment adjusted EBITDAR declined 15.0% year-over-year.

"Our International Interactive business continues to benefit from healthy U.K. revenue, offset in part by lingering weakness in other non-U.K. markets, with a particular emphasis on the ongoing logistical challenges impacting business in Asia. Segment-level revenue declined 5.3% to $230.9 million though U.K. revenue grew a healthy 11.8% (8.9% in constant currency). U.K. growth was driven by all-time high active customer levels and robust Average Revenue per User metrics along with growing traction for our online sports betting offerings which include a newly launched Bally's-branded product that joins our initial JackpotJoy offering. Despite the segment revenue decline, adjusted EBITDAR margins improved 400 basis points year-over-year, leading to overall International Interactive adjusted EBITDAR of $90.0 million, up 5.3% year-over-year. Flow-through in our International Interactive segment remains very healthy as a result of diligent U.K. marketing spend, management of compensation expenses along with the continued realization of synergies from our technology platform consolidation.

"North America Interactive operations generated third quarter revenues of $45.7 million, up 54.5% year-over-year, and an Adjusted EBITDAR loss of $11.0 million. On balance, we remain very pleased with the ramp in our iGaming operations in Rhode Island and results benefited from excellent performance in Pennsylvania during the quarter. However, we were impacted to a certain extent by softness in New Jersey. Ultimately, our iGaming product offering and Bally Bet OSB continue to garner positive player feedback, and we remain excited by the long-term promise embedded in this segment."

George Papanier, Bally's President, added, "Third quarter revenue performance in our C&R segment demonstrated the resilience of our broader regional gaming portfolio even as much work remains to unify the portfolio and manage the business as such. We continue to implement initiatives to optimize and centralize property-level C&R functions and with positive outcomes achieved to date, we remain optimistic regarding the benefits of these initiatives over the coming quarters. At the same time, the segment's many growth opportunities remain firmly intact. In Chicago, demolition of the former Tribune buildings continues while we work closely with our partners at GLPI and with the City to gain final approval for our re-imagined permanent Bally's Chicago Casino master plan ahead of the start of construction next year. Our existing Chicago Temporary Casino is allowing us to build relationships with players in Chicago and establish our long-term presence in a market with favorable adult population and demographics. In Las Vegas, we are moving forward with the planning for a Bally's casino on the Las Vegas Strip adjacent to the A's stadium which will begin to rise next year following the recent implosion of the Tropicana hotel towers. Collectively, these growth opportunities leave us very optimistic regarding the long-term prospects of our C&R business."

Marcus Glover, Bally's Chief Financial Officer, concluded, "Our broad asset portfolio again delivered healthy financial performance in the third quarter of 2024 despite some lingering headwinds. The entire team is working diligently to optimize our cost structure across the board and enhance the efficiency of our operations, particularly in the C&R segment and within International Interactive. While this work is in its early stages and will continue for the foreseeable future, we believe we will see tangible results in the near-term as we improve profitability and enhance our operating performance."

Reconciliation of GAAP Measures to Non-GAAP Measures

To supplement the financial information presented on a generally accepted accounting principles ("GAAP") basis, Bally's has included in this earnings release non-GAAP financial measures for consolidated Adjusted EBITDA and segment Adjusted EBITDAR, which exclude certain items described below. The reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures are presented in the tables appearing below.

"Adjusted EBITDA" is earnings, or loss, for Bally's, or where noted Bally's reportable segments, before, in each case, interest expense, net of interest income, provision (benefit) for income taxes, depreciation and amortization, non-operating (income) expense, acquisition and other transaction related costs, share-based compensation, and certain other gains or losses as well as, when presented for Bally's reporting segments, an adjustment related to the allocation of corporate costs among segments.

"Segment Adjusted EBITDAR" is Adjusted EBITDA (as defined above) for Bally's reportable segments, plus rent expense associated with triple net operating leases for the real estate assets used in the operation of the Bally's casinos and the assumption of the lease for real estate and land underlying the operations of the Bally's Lake Tahoe property. For the International Interactive, North America Interactive, and Other segments, Segment Adjusted EBITDAR and segment Adjusted EBITDA are equivalent due to a lack of triple net operating lease for real estate assets used in those segments.

Management has historically used consolidated Adjusted EBITDA and segment Adjusted EBITDAR when evaluating operating performance because Bally's believes that these metrics are necessary to provide a full understanding of Bally's core operating results and as a means to evaluate period-to-period performance. Management also believes that consolidated Adjusted EBITDA and segment Adjusted EBITDAR are measures that are widely used for evaluating operating performance of companies in Bally's industry and a principal basis for valuing such companies as well. Consolidated Adjusted EBITDAR is used outside of our financial statements solely as a valuation metric. Management believes Consolidated Adjusted EBITDAR is an additional metric traditionally used by analysts in valuing gaming companies subject to triple net leases since it eliminates the effects of variability in leasing methods and capital structures. Consolidated Adjusted EBITDA and segment Adjusted EBITDAR should not be construed as alternatives to GAAP net income as an indicator of Bally's performance. In addition, consolidated Adjusted EBITDA or segment Adjusted EBITDAR as used by Bally's may not be defined in the same manner as other companies in Bally's industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies.

Bally's does not provide a reconciliation of Adjusted EBITDAR on a forward-looking basis to net income, its most comparable GAAP financial measure, because Bally's is unable to forecast the amount or significance of certain items required to develop meaningful comparable GAAP financial measures without unreasonable efforts. These items include depreciation, impairment charges, gains or losses on retirement of debt, acquisition, integration and restructuring expenses, interest expense, share-based compensation expense, professional and advisory fees associated with Bally's capital return program and variations in effective tax rate, which are difficult to predict and estimate and are primarily dependent on future events, but which are excluded from Bally's calculation of Adjusted EBITDAR. Bally's believes that the probable significance of providing this forward-looking valuation metric without a reconciliation to the most directly comparable GAAP metric, is that investors and analysts will have certain information that Bally's believes is useful and meaningful in valuing its business. Investors are cautioned that Bally's cannot predict the occurrence, timing or amount of all non-GAAP items that may be excluded from Adjusted EBITDAR in the future. Accordingly, the actual effect of these items, when determined, could potentially be significant to the calculation of Adjusted EBITDAR.

Third Quarter Conference Call

Bally's third quarter 2024 earnings conference call and audio webcast will be held today, Wednesday, November 6, 2024, at 4:30 p.m. EDT. To access the conference call, please dial (800) 445-7795 (U.S. toll-free) and reference conference ID BALYQ324. The webcast of the call will be available to the public, on a listen-only basis, via the Internet at the Investors section of Bally's website at www.ballys.com. An online archive of the webcast will be available on Bally's website for 120 days.

About Bally's Corporation

Bally's Corporation is a global casino-entertainment company with a growing omni-channel presence. It currently owns and manages 15 casinos across 10 states, a golf course in New York, a horse racetrack in Colorado, and has access to OSB licenses in 18 states. It also owns Bally's Interactive International, formerly Gamesys Group, a leading, global, online gaming operator, Bally Bet, a first-in-class sports betting platform, and Bally Casino, a growing iCasino platform.

With 10,600 employees, the Company's casino operations include approximately 15,300 slot machines, 580 table games and 3,800 hotel rooms. Upon completing the construction of a permanent casino facility in Chicago, IL, Bally's will own and/or manage 15 casinos across 10 states. Bally's also has rights to developable land in Las Vegas post the closure of the Tropicana. Its shares trade on the New York Stock Exchange under the ticker symbol "BALY".

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by Bally's in this press release, its reports filed with the Securities and Exchange Commission ("SEC") and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for Bally's to predict or identify all such events or how they may affect it. Bally's has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include those included in Bally's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by Bally's with the SEC. These statements constitute Bally's cautionary statements under the Private Securities Litigation Reform Act of 1995.

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