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What changed in Bally's Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Bally's Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+376 added−357 removedSource: 10-K (2024-03-15) vs 10-K (2023-03-01)

Top changes in Bally's Corp's 2023 10-K

376 paragraphs added · 357 removed · 262 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

50 edited+35 added−27 removed24 unchanged
Biggest changeCasinos & Resorts - includes our 15 land-based casino properties and one horse racetrack: Property Name Location Bally’s Atlantic City Casino Resort (“Bally’s Atlantic City”) Atlantic City, New Jersey Bally’s Black Hawk (1) Black Hawk, Colorado Bally’s Dover Casino Resort (“Bally’s Dover”) Dover, Delaware Bally’s Evansville Casino & Hotel (“Bally’s Evansville”) Evansville, Indiana Bally’s Kansas City Casino (“Bally’s Kansas City”) Kansas City, Missouri Bally’s Lake Tahoe Casino Resort (“Bally’s Lake Tahoe”) Lake Tahoe, Nevada Bally’s Quad Cities Casino & Hotel (“Bally’s Quad Cities”) Rock Island, Illinois Bally’s Shreveport Casino & Hotel (“Bally’s Shreveport”) Shreveport, Louisiana Bally’s Tiverton Casino & Hotel (“Bally’s Tiverton”) Tiverton, Rhode Island Bally’s Twin River Lincoln Casino Resort (“Bally’s Twin River”) Lincoln, Rhode Island Bally’s Vicksburg Casino (“Bally’s Vicksburg”) Vicksburg, Mississippi Hard Rock Hotel & Casino Biloxi (“Hard Rock Biloxi”) Biloxi, Mississippi Tropicana Las Vegas Casino and Resort (“Tropicana Las Vegas”) Las Vegas, Nevada Bally’s Arapahoe Park Aurora, Colorado __________________________________ (1) Consists of three casino properties: Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino.
Biggest changeOur Operating Structure Our business is organized into three reportable segments: (i) Casinos & Resorts, (ii) International Interactive, and (iii) North America Interactive. 5 Casinos & Resorts - includes our 16 land-based casino properties, one horse racetrack and one golf course: Property Name Location Bally’s Atlantic City Casino Resort (“Bally’s Atlantic City”) Atlantic City, New Jersey Bally’s Black Hawk (1)(2) Black Hawk, Colorado Bally’s Chicago Casino (“Bally’s Chicago”) (3) Chicago, Illinois Bally’s Dover Casino Resort (“Bally’s Dover”) (2) Dover, Delaware Bally’s Evansville Casino & Hotel (“Bally’s Evansville”) (2) Evansville, Indiana Bally’s Kansas City Casino (“Bally’s Kansas City”) Kansas City, Missouri Bally’s Lake Tahoe Casino Resort (“Bally’s Lake Tahoe”) Lake Tahoe, Nevada Bally’s Quad Cities Casino & Hotel (“Bally’s Quad Cities”) (2) Rock Island, Illinois Bally’s Shreveport Casino & Hotel (“Bally’s Shreveport”) Shreveport, Louisiana Bally’s Tiverton Casino & Hotel (“Bally’s Tiverton”) (2) Tiverton, Rhode Island Bally’s Twin River Lincoln Casino Resort (“Bally’s Twin River”) Lincoln, Rhode Island Bally’s Vicksburg Casino (“Bally’s Vicksburg”) Vicksburg, Mississippi Hard Rock Hotel & Casino Biloxi (“Hard Rock Biloxi”) (2) Biloxi, Mississippi Tropicana Las Vegas Casino and Resort (“Tropicana Las Vegas”) (2) Las Vegas, Nevada Bally’s Arapahoe Park Aurora, Colorado Bally’s Golf Links at Ferry Point (“Bally’s Golf Links”) Bronx, New York __________________________________ (1) Consists of three casino properties: Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino.
Human Capital Resources Employee Relations, Diversity and Social Inclusion A driving factor of our success is the recruitment and retention of employees who are committed to providing outstanding guest service that promotes diversity, inclusion and respect.
Human Capital Resources Employee Relations, Diversity and Inclusion A driving factor of our success is the recruitment and retention of employees who are committed to providing outstanding guest service that promotes diversity, inclusion and respect.
In addition, our master contracts with Rhode Island were extended through June 30, 2043, and allow for consolidation of promotional points between Bally’s Twin River and Bally’s Tiverton, obligate Bally’s Twin River to build a 50,000 square foot expansion, obligate Bally’s to lease at least 20,000 square feet of commercial space in Providence, and commit us to invest $100 million in Rhode Island over this extended term, including an expansion and the addition of new amenities at Bally’s Twin River.
In addition, our master contracts with Rhode Island extended through June 30, 2043, and allow for consolidation of promotional points between Bally’s Twin River and Bally’s Tiverton, obligate Bally’s Twin River to build a 50,000 square foot expansion, obligate Bally’s to lease at least 20,000 square feet of commercial space in Providence, and commit us to invest $100 million in Rhode Island over the term, including an expansion and the addition of new amenities at Bally’s Twin River.
The joint venture was organized as the Rhode Island VLT Company, LLC, with IGT owning 60% of the membership interests and Bally’s or its affiliates owning 40% of the membership interests. On December 30, 2022 Bally’s Twin River and Bally’s Tiverton purchased additional machines directly from IGT to effectively own 40% of the machines.
The joint venture was organized as the Rhode Island VLT Company, LLC, with IGT owning 60% of the membership interests and Bally’s or its affiliates owning 40% of the membership interests (“RI Joint Venture”). On December 30, 2022, Bally’s Twin River and Bally’s Tiverton purchased additional machines directly from IGT to effectively own 40% of the machines.
Other Laws and Regulations Our businesses are subject to various laws and regulations in addition to gaming regulations. These laws and regulations include restrictions and conditions concerning alcoholic beverages, food service, smoking, environmental matters, employees and employment practices, currency transactions, taxation, zoning and building codes and marketing and advertising.
Other Laws and Regulations Our businesses are subject to various laws and regulations in addition to gaming regulations. These laws and regulations include restrictions and conditions concerning alcoholic beverages, food service, smoking, environmental matters, employees and employment practices, currency transactions, taxation, zoning and building codes, marketing and advertising and data privacy.
In addition, our Code of Business Conduct, Corporate Governance Guidelines and charters of the Audit Committee, the Compensation Committee, the Compliance Committee and the Nominating and Governance Committee are available on our website, www.Ballys.com. The information that is contained in, or that is accessed through, our website is not part of this filing. 11
In addition, our Code of Business Conduct, Corporate Governance Guidelines and charters of the Audit Committee, the Compensation Committee, the Compliance Committee and the Nominating and Governance Committee are available on our website, www.Ballys.com. The information that is contained in, or that is accessed through, our website is not part of this filing. 12
Legalized gaming is currently permitted in various forms in different parts of the US, in several Canadian provinces and on many lands taken into trust for the benefit of certain Native Americans in the US and First Nations in Canada. We face significant competition in each of the jurisdictions in which we operate.
Legalized gaming is currently permitted in various forms in different parts of the US, in several Canadian provinces and on many lands taken into trust for the benefit of certain Native American Tribes in the US and First Nations in Canada. We face significant competition in each of the jurisdictions in which we operate.
We own and operate our proprietary software and technology stack, which is designed to allow us to provide consumers differentiated offerings and exclusive content. Our Strategy and Business Developments We seek to continue to grow our business by actively pursuing the acquisition and development of new gaming opportunities and reinvesting in our existing operations.
Our proprietary software and technology stack is designed to allow us to provide consumers with differentiated offerings and exclusive content. Our Strategy and Business Developments We seek to continue to grow our business by actively pursuing the acquisition and development of new gaming opportunities and reinvesting in our existing operations.
Such competition may intensify in some of these jurisdictions if new gaming operations open in these markets or existing competitors expand their operations. Our properties compete directly with other gaming properties in each state in which we operate, as well as in adjacent states.
Such competition may intensify in some of these jurisdictions if new gaming operations open in these markets or existing competitors expand their operations. Our properties compete directly with other gaming properties in each state in which we operate, except for Rhode Island, as well as in adjacent states.
Interactive Brands We operate a suite of award-winning brands and are focused on building a diverse portfolio of distinctive and recognizable brands that deliver best-in-class platforms, player experiences and gaming content globally.
Interactive Brands We operate a suite of award-winning brands and are focused on building a diverse portfolio of distinctive and recognizable brands that deliver platforms, player experiences and gaming content globally.
Our land-based casino operations include approximately 14,800 slot machines, 500 table games and 5,300 hotel rooms, along with various restaurants, entertainment venues and other amenities. In 2021, we acquired London-based Gamesys Group Ltd.
Our land-based casino operations include approximately 15,500 slot machines, 600 table games and 5,300 hotel rooms, along with various restaurants, entertainment venues and other amenities. In 2021, we acquired London-based Gamesys Group Ltd.
The Bally brand is protected by around 75 trademark registrations and applications in the US and foreign jurisdictions. In line with our multi-brand strategy, we register trademarks for brands either directly exploited by us in the provision of interactive gaming services or for the purpose of licensing to third parties.
The Bally’s and Bally brand is protected by approximately 150 trademark registrations and applications in the US and foreign jurisdictions. In line with our multi-brand strategy, we register trademarks for brands either directly exploited by us in the provision of gaming services or for the purpose of licensing to third parties.
Our brands are: • iCasino brands include Bally Casino , Rainbow Riches Casino, Virgin Casino, Virgin Games, Megaways Casino, VIP Casino, Vera & John, InterCasino , Monopoly Casino, Yuugado, Casino Secret; • Sportsbook brand is Bally Bet ; • F2P brand is Bally Play ; • Online bingo brands include Jackpotjoy, Double Bubble Bingo and Botemania; • SportCaller , a F2P games content provider; • Gamesys , an iCasino and online bingo platform provider and operator; and • Telescope , a provider of real-time audience engagement solutions for live events, gamified second screen experiences and interactive livestreams.
Our brands are generally as follows, which include certain licensed brands: • iGaming brands include Bally Casino , Rainbow Riches Casino, Virgin Casino, Virgin Games, VIP Casino, Vera & John, InterCasino , Monopoly Casino, Yuugado, Canal Bingo, VIP Casino, Casino Secret; • Sportsbook brand is Bally Bet ; • F2P brand is Bally Play and SportCaller , a F2P games content provider; • Online bingo brands include Jackpotjoy, Double Bubble Bingo and Botemania; • Gamesys , an iGaming and online bingo platform provider and operator; and • Telescope , a provider of real-time audience engagement solutions for live events, gamified second screen experiences and interactive livestreams.
Competition The gaming industry is characterized by a high degree of competition among a large number of operators, including land-based casinos, riverboat casinos, dockside casinos, video lotteries, traditional lotteries, video gaming terminals at taverns in certain states, sweepstakes and poker machines not located in casinos, Native American gaming, emerging varieties of iGaming and daily fantasy sports gaming, increased sports betting and other forms of gaming in the US.
This cross-marketing campaign is currently being launched at Bally’s Atlantic City. 8 Competition The gaming industry is characterized by a high degree of competition among a large number of operators, including land-based casinos, riverboat casinos, dockside casinos, video lotteries, traditional lotteries, video gaming terminals at taverns in certain states, sweepstakes and poker machines not located in casinos, Native American gaming, emerging varieties of iGaming and daily fantasy sports gaming, increased sports betting and other forms of gaming in the US.
This June 2021 legislation also authorized a joint venture between Bally’s and International Gaming Technology PLC (“IGT”) to become a licensed technology provider and supply the State of Rhode Island with all VLTs at both Bally’s Twin River and Bally’s Tiverton for a 20.5-year period starting January 1, 2023.
June 2021 legislation in Rhode Island also authorized a joint venture between Bally’s and IGT Global Solutions Corporation (“IGT”) to become a licensed technology provider and supply the State of Rhode Island with all VLTs at both Bally’s Twin River and Bally’s Tiverton for a 20.5-year period starting January 1, 2023.
While we take action to protect our intellectual property rights, there is always a risk that (i) our proprietary rights become invalidated or unenforceable, (ii) we are unsuccessful in obtaining trademark or patent registrations and (iii) we are unsuccessful in our enforcement efforts and therefore unable to prevent what we consider to be misuse of our intellectual property assets.
We protect our trade secrets and confidential information by nondisclosure agreements and confidentiality clauses. 11 While we take action to protect our intellectual property rights, there is always a risk that (i) our proprietary rights become invalidated or unenforceable, (ii) we are unsuccessful in obtaining trademark or patent registrations and (iii) we are unsuccessful in our enforcement efforts and therefore unable to prevent what we consider to be misuse of our intellectual property assets.
Our software code is primarily protected by copyright and, to a lesser extent, patents. Although our business is not dependent on any one of our patents or combination of our patents, we file patent applications where we believe it is appropriate to do so.
We create original software code and designs for our interactive gaming and betting services. Our software code is primarily protected by copyright and, to a lesser extent, patents. Although our business is not dependent on any one of our patents or combination of our patents, we file patent applications where we believe it is appropriate to do so.
In summary, we remain focused in our continuing effort to rebirth Bally’s brand as a legendary, integrated brand, leveraging our casino and resort, interactive and media environments with a compelling rewards program to rival our competition.
Nonetheless, Bally’s remains at the center of our strategy. 6 In summary, we remain focused in our continuing effort to rebirth Bally’s brand as a legendary, integrated brand, leveraging our casino and resort, interactive and media environments with a compelling rewards program to rival our competition.
On January 1, 2023 Bally’s Twin River and Bally’s Tiverton contributed all of their machines to Rhode Island VLT Company, LLC in return for an aggregate 40% membership interest, and IGT contributed all of their machines at Bally’s Twin River and Bally’s Tiverton to the Rhode Island VLT Company, LLC in return for a 60% membership interest.
On January 1, 2023, Bally’s Twin River and Bally’s Tiverton contributed all of their machines to the RI Joint Venture in return for an aggregate 40% membership interest, and IGT contributed all of their machines at Bally’s Twin River and Bally’s Tiverton to the RI Joint Venture in return for a 60% membership interest.
North America Interactive - includes the following North America businesses: • Bally’s Interactive, primarily a business to consumer online iCasino operator; and • Consumer facing service and marketing engines, including SportCaller, a B2B and F2P game provider for sports betting companies; Live at the Bike, an online subscription streaming service featuring livestream and on-demand poker videos and podcasts; and the Association of Volleyball Professionals (“AVP”), a professional beach volleyball organization and host of the longest-running domestic beach volleyball tour.
North America Interactive - includes the following North America businesses: • Bally’s Interactive, primarily a B2C online iGaming and online sportsbook operator; and • Consumer facing service and marketing engines, including SportCaller, a business-to-business (“B2B”) and F2P game provider for sports betting companies; Live at the Bike, an online subscription streaming service featuring livestream and on-demand poker videos and podcasts; an investment in the Association of Volleyball Professionals (“AVP”), a professional beach volleyball organization and host of the longest-running domestic beach volleyball tour; and an investment in Watch Stadium, a content distribution channel focused on sporting events.
Direct Marketing We use Direct Marketing to establish a personal relationship with customers. This form of marketing typically involves an offer and a call to action to incentivize an initial or additional casino visit or engagement with our iGaming products.
This form of marketing typically involves an offer and a call to action to incentivize an initial or additional casino visit or engagement with our iGaming products.
The Regulatory Agreement contains financial and other covenants that, among other things, (i) restrict the acquisition of stock and other financial interests in us, (ii) relate to the licensing and composition of members of our management and Board of Directors (the “Board”), (iii) prohibit certain competitive activities and related-party transactions and (iv) restrict our ability to declare or make restricted payments (including dividends), incur additional indebtedness or take certain other actions, if our leverage ratio exceeds 5.50 to 1.00 (in general being gross debt divided by Adjusted EBITDA, each as defined in the Regulatory Agreement).
The Regulatory Agreement contains financial and other covenants that, among other things, (i) restrict the acquisition of stock and other financial interests in us, (ii) relate to the licensing and composition of members of our management and Board of Directors (the “Board”), (iii) prohibit certain competitive activities and related-party transactions and (iv) restrict our ability to declare or make restricted payments (including dividends), incur additional indebtedness or take certain other actions, if our leverage ratio exceeds 5.50 to 1.00 (in general being gross debt divided by Adjusted EBITDA, each as defined in the Regulatory Agreement). 10 The Regulatory Agreement also provides affirmative obligations, including setting a minimum number of employees that we must employ in Rhode Island and providing the DBR and DoL with periodic information updates about us.
The June 2021 legislation authorized Bally’s Twin River to become a licensed technology provider, which it did on July 1, 2021. As a licensed Technology Provider, Bally’s Twin River was entitled to an additional share of net terminal income on Video Lottery Terminals (“VLTs”) which they owned or leased.
As a licensed Technology Provider since July 1, 2021, Bally’s Twin River is entitled to an additional share of net terminal income on Video Lottery Terminals (“VLTs”) which they owned or leased.
The North America Interactive reportable segment also includes the North American operations of Gamesys, a B2C iCasino operator. International Interactive - includes Gamesys. Refer to Note 21 “ Segment Reporting ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K for additional information on our segment reporting structure.
The North America Interactive reportable segment also includes the North American operations of Gamesys. Refer to Note 23 “ Segment Reporting ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K for additional information on our segment reporting structure. Our Brands Bally’s Brand Bally’s is an iconic brand.
For example, in the case of Hard Rock Biloxi, we decided to maintain the current “Hard Rock” naming rights arrangement. Nonetheless, Bally’s remains at the center of our strategy.
For example, in the case of Hard Rock Biloxi, we decided to maintain the current “Hard Rock” naming rights arrangement.
Interactive Cross Marketing We design collaborative, cross-marketing campaigns that include direct mail, on-property marketing and VIP marketing in an effort to increase interactive sign-ups and introduce interactive players to our casinos and resorts. This cross-marketing campaign is currently being launched at Bally’s Atlantic City.
Interactive Cross Marketing We design collaborative, cross-marketing campaigns that include direct mail, on-property marketing and VIP marketing in an effort to increase interactive sign-ups and introduce interactive players to our casinos and resorts.
The Hard Rock license expires in 2025 with an option to renew for two successive ten-year terms. In foreign territories we hold a number of in-bound trademark licenses for our interactive gaming services. We create original software code and designs for our interactive gaming and betting services.
In addition, we hold an exclusive trademark license for Hard Rock in relation to our Hard Rock Biloxi casino. The Hard Rock license expires in 2025 with an option to renew for two successive ten-year terms. In foreign territories we hold a number of in-bound trademark licenses for our interactive gaming services.
Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions. 9 Under gaming laws in jurisdictions in which we have operations, and under our organizational documents, certain of our securities are subject to restrictions on ownership which may be imposed by specified governmental authorities.
Pursuant to the gaming laws in the jurisdictions where we have operations, and under our organizational documents, certain of our securities are subject to restrictions on ownership which may be imposed by specified governmental authorities.
Labor Relations As of December 31, 2022, we had approximately 10,500 employees. Most of our employees in Rhode Island, Nevada and New Jersey are represented by a labor union and are subject to collective bargaining agreements with us. As of December 31, 2022, we had 29 collective bargaining agreements covering 2,755 employees. Our collective bargaining agreements generally have three-or-five-year terms.
Labor Relations As of December 31, 2023, we had approximately 10,500 employees. Most of our employees in Rhode Island, Nevada and New Jersey are represented by a labor union and are subject to collective bargaining agreements with us. As of December 31, 2023, we had 32 collective bargaining agreements covering 3,040 employees.
Violations of laws or regulations in one jurisdiction could result in disciplinary action in that and other jurisdictions. Some jurisdictions, including those in which we are licensed, empower their regulators to investigate participation by licensees in gaming outside their jurisdiction and require access to periodic reports reflecting those gaming activities.
Some jurisdictions, including those in which we are licensed, empower their regulators to investigate participation by licensees in gaming outside their jurisdiction and require access to periodic reports reflecting those gaming activities.
Player Development Player Development is our link to our premium customers. We utilize a process under the Precision Marketing Model that is designed to enable our team to efficiently manage sales efforts to attract customers.
Player Development Player development is our link to our premium customers. We utilize a process under the Precision Marketing Model that is designed to enable our team to efficiently manage sales efforts to attract customers. We believe the potential exists to engage increasingly more with our customers as they move throughout our brands.
These steps have positioned us as a prominent, full-service, vertically integrated iGaming company, with physical casinos and online gaming solutions united under a single, leading brand.
This acquisition continues our strategic objective of developing a diversified portfolio within our Casinos & Resorts segment. These steps have positioned us as a prominent, full-service, vertically integrated iGaming company, with physical casinos and online gaming solutions united under a single, leading brand.
Every customer who interacts with a process, such as an automated teller machine (ATM) or kiosk, or an employee is met with an attempt to garner a return visit and then, in turn, make a recommendation to family and friends. Hence “R2,” an abbreviation for “Return and Recommend,” is Bally’s marketing and casino operations mantra.
Our Casino Operations team plays a significant role in attracting and retaining our customers. Every customer who interacts with a process, such as an automated teller machine (ATM) or kiosk, or an employee is met with an attempt to garner a return visit and then, in turn, make a recommendation to family and friends.
For further information on our recent acquisitions, refer to Note 6 “ Business Combinations ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K. 4 Our Operating Structure Our business is organized into three reportable segments: (i) Casinos & Resorts, (ii) North America Interactive, and (iii) International Interactive.
For further information on our recent acquisitions, refer to Note 6 “ Business Combinations ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K.
Additional entertainment is offered at Bally’s lounges and bars and designed to support our branding mission which is based on offering an engaging and entertaining experience. Bally Rewards Bally Rewards is our core loyalty program and was devised to establish consistency throughout Bally’s brand. Players earn tier points to achieve a tier status of Pro, Star, Superstar and ultimately Legend.
Bally Rewards Bally Rewards is our core loyalty program and was devised to establish consistency throughout Bally’s brand. Players earn tier points to achieve a tier status of Pro, Star, Superstar and ultimately Legend.
Our professional development efforts include robust training programs, at no cost to the employee, scholarships, and tuition reimbursement opportunities. In addition, we recently implemented a Management Development Program, which is designed to allow us to identify and promote high performing talent within our workforce.
In addition, we recently implemented a Management Development Program, which is designed to allow us to identify and promote high performing talent within our workforce.
Our Brands Bally’s Brand Bally’s is an iconic brand. We performed extensive market research in which active gamers indicated an acute awareness of the brand, but not necessarily a high usage of brand products and gaming offerings.
We performed extensive market research in which active gamers indicated an acute awareness of the brand, but not necessarily a high usage of brand products and gaming offerings. We have rebranded every casino and resort in our portfolio, except Hard Rock Biloxi, to build upon the deep legacy of the Bally’s brand.
The Company believes that in order to flourish in a competitive environment and global economy, all ideas must be on the table, and an environment that welcomes and includes diverse perspectives leads to success in business. 8 We believe that by providing our employees with competitive pay and benefits, as well as opportunities for professional development, we can achieve our goals of attracting and retaining a diverse and engaged workforce.
The Company believes that in order to flourish in a competitive environment and global economy, all ideas must be on the table, and an environment that welcomes and includes diverse perspectives leads to success in business.
The funnels are as follows: Advertising Bally’s targets its demographics throughout the nation via radio, television, billboards, print, direct mail, email, digital and social media campaigns. We seek to target the right customer at the right time with the right message to increase brand awareness and drive business. We do modest image advertising, but more predominantly lean towards call-to-action messaging.
We seek to target the right customer at the right time with the right message to increase brand awareness and drive business. We do modest image advertising, but more predominantly lean towards call-to-action messaging. Direct Marketing We use direct marketing to establish a personal relationship with customers.
The sale of alcoholic beverages is subject to licensing, control and regulation by applicable local regulatory agencies. All licenses are revocable and are not transferable.
The sale of alcoholic beverages is subject to licensing, control, and regulation by applicable local regulatory agencies. All licenses are revocable and are not transferable. The agencies involved have full power to limit, condition, suspend or revoke any license, and any disciplinary action could, and revocation would, have a material adverse effect upon our operations.
We believe in the industrial logic and vision of Bally’s becoming a premier, truly integrated, omni-channel gaming company for both retail and online gamers. These insights form the key tenets of our integrated Bally Rewards program specifically to enable customers to utilize compelling rewards universally in our interactive and casino and resort environments.
These insights form the key tenets of our integrated Bally Rewards program specifically to enable customers to utilize compelling rewards universally in our interactive and casino and resort environments. We believe that our phased approach to the transformation of Bally’s brand was thoughtful and deliberate. There are exceptions to our rebranding initiative.
In order to protect our brands, technology and other creative output, we rely on a combination of trademarks, copyright, patents, trade secrets and contract law to establish and protect our proprietary rights. Our core brand in the United States is Bally and Bally’s, which includes Bally’s Casino, Bally Bet, Bally Play and Bally Sports.
Intellectual Property We develop intellectual property to differentiate our retail casinos and interactive products from our competitors. Our brands and technology constitute key business assets. In order to protect our brands, technology and other creative output, we rely on a combination of trademarks, copyright, patents, trade secrets and contract law to establish and protect our proprietary rights.
We have rebranded every casino and resort in our portfolio, except Hard Rock Biloxi, to build upon the deep legacy of the Bally’s brand. Additionally, our research told us that gamers across the demographic age spectrum knew of Bally’s brand and identified with the gaming entertainment aspect of slot machines, pinball machines, video machines and casinos.
Additionally, our research told us that gamers across the demographic age spectrum knew of Bally’s brand and identified with the gaming entertainment aspect of slot machines, pinball machines, video machines and casinos. We believe in the industrial logic and vision of Bally’s becoming a premier, truly integrated, omni-channel gaming company for both retail and online gamers.
Our casino marketing team seeks to leverage tried-and-true promotions that attract and entertain players in an effort to retain them for the long term. Entertainment The mission to attract and retain gamers is evident in our entertainment strategy. Bally’s headliner strategy is to entertain our customers while recovering the cost of the act through cash sales.
Entertainment The mission to attract and retain gamers is evident in our entertainment strategy. Bally’s headliner strategy is to entertain our customers while recovering the cost of the act through cash sales. Additional entertainment is offered at Bally’s lounges and bars and designed to support our branding mission which is based on offering an engaging and entertaining experience.
We provide our customers with physical and interactive entertainment and gaming experiences, including traditional casino offerings, iCasino, online bingo, sportsbook and free-to-play (“F2P”) games. As of December 31, 2022, we own and manage 15 land-based casinos and one horse racetrack in ten states across the United States (“US”) operating under the Bally’s brand.
We provide our customers with physical and interactive entertainment and gaming experiences, including traditional casino offerings, iGaming, online bingo, sportsbook and free-to-play (“F2P”) games.
Our Regulatory Agreement On February 17, 2022, certain of our subsidiaries, the Rhode Island Department of Business Regulation (“DBR”) and the Division of Lotteries (“DoL”) of the Rhode Island Department of Revenue amended and restated our Regulatory Agreement (the “Regulatory Agreement”). The amendment and restatement of the Regulatory Agreement was mandated by legislation enacted in Rhode Island in June 2021.
Our Regulatory Agreement We are party to an Amended and Restated Regulatory Agreement (the “Regulatory Agreement”), with the Rhode Island Department of Business Regulation (“DBR”) and the State Lottery Division of the Rhode Island Department of Revenue (“DoL”).
We believe the potential exists to engage increasingly more with our customers as they move throughout our brands. 7 Special Events and Promotions This category refers to the mass public promotions that are weaved into the marketing calendar in concert with Direct Marketing.
Special Events and Promotions This category refers to the mass public promotions that are weaved into the marketing calendar in concert with direct marketing. Our casino marketing team seeks to leverage tried-and-true promotions that attract and entertain players in an effort to retain them for the long term.
Each of our casino and iGaming businesses is subject to extensive regulation under the laws, rules and regulations of the jurisdiction in which it operates. These laws, rules and regulations generally concern the responsibility, financial stability, integrity and character of the owners, managers and persons with financial interests in the gaming operations.
These laws, rules and regulations generally concern the responsibility, financial stability, integrity and character of the owners, managers, officers and certain employees of our gaming operations. Violations of laws or regulations in one jurisdiction could result in disciplinary action in that and other jurisdictions.
We are focused on building a strong brand reputation to distinguish us from our competitors. Marketing The marketing efforts under the Bally’s brand are primarily executed through six funnels: Advertising, Direct Marketing, Player Development, Special Events and Promotions, Entertainment and the Bally Rewards loyalty program. Our Casino Operations team plays a significant role in attracting and retaining our customers.
We plan to continue to expand and optimize our data analytics platform to better identify and manage signs of problem gambling, while continuing to deliver entertaining gaming experiences globally. 7 Marketing The marketing efforts under the Bally’s brand are primarily executed through six funnels: advertising, direct marketing, player development, special events and promotions, entertainment and the Bally Rewards loyalty program.
Our patent portfolio comprises approximately 20 granted US patents and we license in patented technology where required for the operation of our business. We protect our Trade Secrets and confidential information by nondisclosure agreements and confidentiality clauses.
We also license in patented technology where required for the operation of our business.
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Notable efforts in the current year include: • In January 2022, we launched Bally Casino, an iCasino app, in New Jersey and in November 2022, we launched our first combined casino and sports book app, Bally Bet Sportsbook & Casino, in Ontario, Canada.
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As of December 31, 2023, we own and manage 16 land-based casinos in 10 states across the United States (“US”), one golf course in New York, and one horse racetrack in Colorado operating under the Bally’s brand.
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We will continue to focus on jurisdictions where there are iCasino opportunities. • In June 2022, we signed a host community agreement with the City of Chicago to develop Bally’s Chicago, a flagship, destination casino resort in downtown Chicago, Illinois.
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Notable efforts in the current year include: • In January 2023, we completed the sale-leaseback transaction for the land and real estate assets of Bally’s Tiverton and Hard Rock Biloxi for an aggregate consideration of $625.4 million.
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This agreement provides us with the exclusive right to operate a temporary casino, which is expected to open in the second half of 2023, while the permanent casino resort is constructed. • On September 26, 2022, we completed our acquisition of Tropicana Las Vegas from Penn Entertainment, Inc. and Gaming and Leisure Properties, Inc.
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This transaction was structured as a tax-free capital contribution, allowing us to utilize funds to reduce debt and be better positioned for continued growth projects. • In the first half of 2023, we opened the Bally’s Twin River expansion, which included the addition of 40,000 square feet of new gaming space in a landmark expansion of our casino floor, as well as the region’s largest spa inspired by Korea’s traditional bath houses.
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(“GLPI”), providing us with a presence on the Las Vegas Strip. • During 2022, we made significant progress on our capital improvement and expansion projects focused on gaming and non-gaming amenities at our Bally’s Atlantic City, Bally’s Lincoln and Bally’s Kansas City properties renovating hotel rooms, expanding our gaming floors and product offerings and introducing new restaurant concepts, spas and other customer experience venues. • On January 3, 2023, we completed the sale-leaseback transaction for the land and real estate assets of Bally’s Tiverton and Hard Rock Biloxi for an aggregate consideration of $635 million.
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Our expansion represents our continued partnership with, and commitment to invest $100 million in, our home state of Rhode Island and its workforce. • In May 2023, in conjunction with Gaming & Leisure Properties, Inc.
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Our Sinclair Broadcast Group (“Sinclair”) media affiliation adds to our comprehensive touchpoint strategy, which strengthens our ability to attract new customers to our integrated brand by showcasing Bally’s with millions of daily impressions. 5 We believe that our phased approach to the transformation of Bally’s brand was thoughtful and deliberate. There are exceptions to our rebranding initiative.
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(“GLPI”), we announced a binding term sheet with the Oakland Athletics of Major League Baseball to site their new ballpark on a portion of our Tropicana Las Vegas property.
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Bally Sports Brand Inherent in our naming rights arrangement with Sinclair, our Bally Sports brand encompasses a lineup of 19 regional sports networks to position the Bally Sports brand to be a well-known participant in the sports media industry, producing award-winning live game coverage, while creating and innovating multiplatform content that engages millions of sports fans across the US.
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The ballpark is expected to welcome more than 2.5 million fans and visitors annually and will be a one-of-a-kind asset for the Las Vegas Strip. • In June 2023, we launched our mobile iGaming app in Pennsylvania, making it our third active iGaming region, following Ontario, Canada in 2022 and New Jersey in late 2021.
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We are home to America’s most comprehensive regional sports media rights portfolio that includes more than half of the US-based Major League Baseball, National Basketball Association and National Hockey League teams. We believe Bally Sports represents the future of sports fandom.
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In June 2023, Rhode Island legalized iGaming, naming Bally’s as the sole provider in the state. We anticipate launching our iGaming app in Rhode Island in early 2024, offering popular live casino games such as blackjack, roulette and baccarat.
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We are seeking to cultivate and engage the next generation of fans by pursuing opportunities to create an omni-channel entertainment experience with sports at its core.
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We will continue to focus on jurisdictions where there are iGaming opportunities. • We rolled out our new Bally Bet sportsbook app, with our partners Kambi and White Hat Gaming, in seven US states.
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By leveraging the collective scale of our regional sports media rights portfolio, we will seek to develop engaging content across an ever-expanding ecosystem of platforms and devices, meeting fans at the intersection of technology and sports culture.
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We intend to continue rolling out our app to new jurisdictions within the US throughout 2024 to increase customer engagement with the Bally brand and expand our online sports betting presence. 4 • In the beginning of September 2023, we opened our temporary casino at the Medinah Temple in Chicago, Illinois, with approximately 791 slot machines, 56 table games, and several food and beverage offerings.
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We believe that Bally Sports’ investment in the gamification of sports will usher in a new era of live, interactive sports that will provide fans the opportunity to interact with games in real time, on a personalized level, creating a national lean-in experience.
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We remain on track to break ground on the permanent casino development in downtown Chicago in 2024, which will become our flagship destination casino resort. • In September 2023, we opened our land-based property expansion at Bally’s Kansas City, which transformed the property, through an extensive aesthetic renovation to its interior and exterior, and through the addition of enhanced dining and gaming experiences.
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Our Technology and Product Development The heart of Bally’s real-money gaming solutions is the union of the Gamesys platform with Bally’s casinos and resorts and iGaming products.
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The expansion represents the most significant investment that Bally’s has made in the property since its acquisition in 2020. • In September 2023, we acquired Trump Golf Links at Ferry Point, subsequently renamed to Bally’s Golf Links at Ferry Point, which includes the assignment of a license agreement to operate an 18-hole links-style golf course located in the Bronx, New York.
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The combined casino, sports and additional online marketing assets provide social gaming, game development and marketing partnerships that integrate with the casinos and resorts creating an exciting and diverse gaming, hospitality and entertainment environment.
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(2) Properties leased from GLPI. Refer to Note 17 “ Leases ” for further information. (3) Temporary casino facility, as a permanent casino resort is being constructed. International Interactive - includes Gamesys, a business-to-consumer (“B2C”) iCasino operator.
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Our investment in gaming platforms along with our talented technical and product development teams allowed Bally’s to launch Bally Casino New Jersey within two months of the Gamesys acquisition. In 2022, we rolled-out our new BallyBet 2.0 Product to Arizona, New York, Ontario and Indiana, all with expanded omni-channel marketing features.
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Our Technology and Product Development At Bally’s, we’ve brought together a blend of real money technology platforms and know-how that together deliver a portfolio of exciting, diverse, and localized gaming products.
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Our investment in core disciplines across technology, analytics and marketing have allowed us to rapidly bring innovative new experiences to market and provide unique insights into our customer habits and their interactions with both offline and online experiences. The result has been a highly efficient marketing conversion and retention platform that combines online and offline opportunities.
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At its heart, we combine more than 20 years of experience from competitive European online gaming markets, Bally’s iGaming products and entrepreneurial spirit, and strong partnerships with third-party iGaming & Sports providers. Our talented technology and product development teams continue to demonstrate a capability to relentlessly develop our products and launch into new markets.
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Our product offerings comprise varying levels of proprietary and third-party software. Our proprietary platform binds together our product offerings, providing account management, responsible gaming, regulatory compliance and electronic wallet capabilities.
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Our teams are highly skilled, ambitious and experienced. In 2021, within our North America Interactive reporting segment, we rolled out Bally Casino to New Jersey only two months after our acquisition of Gamesys.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

122 edited+32 added−39 removed242 unchanged
Biggest changeThere can be no assurances that we would be able to recoup such losses, whether in whole or in part, from our third-party service providers or insurers. 22 Business Operational Risks We have expanded our business model, which makes it difficult for us to forecast our financial results, creates uncertainty as to how investors will evaluate our prospects, and increases the risk that we will not be successful .
Biggest changeThe resultant losses suffered could materially adversely affect our business, financial condition and results of operations. There can be no assurances that we would be able to recoup such losses, whether in whole or in part, from our third-party service providers or insurers.
Competition The gaming industry, including retail casinos and iGaming, is very competitive and increased competition, including through legislative legalization or expansion of gaming by states in or near where we own facilities or through Native American gaming facilities, could adversely affect our financial results. We face significant competition in all of the areas in which we conduct our business.
Competition The gaming industry, including retail casinos and iGaming, is very competitive and increased competition, including through legislative legalization or expansion of gaming by states in or near where we own facilities or through Native American gaming facilities, could adversely affect our financial results. We face significant competition in all areas in which we conduct our business.
Gaming authorities generally can require that any beneficial owner of our securities file an application for a finding of suitability.
Gaming authorities can generally require that any beneficial owner of our securities file an application for a finding of suitability.
An event of default under our debt agreements could result in acceleration of some or all of the applicable indebtedness as well as other indebtedness of ours and the inability to borrow additional funds. We do not have, and cannot be certain we would be able to obtain, sufficient funds to repay any such indebtedness if it is accelerated.
An event of default under our debt agreements could result in acceleration of some or all the applicable indebtedness as well as other indebtedness of ours and the inability to borrow additional funds. We do not have, and cannot be certain we would be able to obtain, sufficient funds to repay any such indebtedness if it is accelerated.
In carrying out its functions, the GBGC is under a statutory duty to ensure that license holders are operating their businesses in ways that are reasonably consistent with the licensing objectives set out in the Gambling Act 2005 (the primary legislation governing the licensing and regulation of gambling in Great Britain) (the “Gambling Act”), which are: (1) preventing gambling from being a source of (or associated with) crime or disorder, or being used to support crime; (2) ensuring that gambling is conducted in a fair and open way; and (3) protecting children and other vulnerable people from being harmed or exploited by gambling.
In carrying out its functions, the GBGC is under a statutory duty to ensure that license holders are operating their businesses in ways that are reasonably consistent with the licensing objectives set out in the Gambling Act 2005 (currently the primary legislation governing the licensing and regulation of gambling in Great Britain) (the “Gambling Act”), which are: (1) preventing gambling from being a source of (or associated with) crime or disorder, or being used to support crime; (2) ensuring that gambling is conducted in a fair and open way; and (3) protecting children and other vulnerable people from being harmed or exploited by gambling.
Financing Risks • Our debt agreements, the Regulatory Agreement and other future indebtedness contains or may contain restrictive covenants that may limit our operating flexibility. • 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.
Financing Risks • Our debt agreements, the Regulatory Agreement and other future indebtedness contain or may contain restrictive covenants that may limit our operating flexibility. • 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.
In addition, our competitors may refurbish, rebrand or expand their casino offerings, which could result in increased competition. Furthermore, changes in ownership may result in improved quality of our competitors’ facilities, which may make such facilities more competitive. Certain of our competitors are large gaming companies with greater name recognition and marketing and financial resources.
In addition, our competitors may refurbish, rebrand, or expand their casino offerings, which could result in increased competition. Furthermore, changes in ownership may result in improved quality of our competitors’ facilities, which may make such facilities more competitive. Certain of our competitors are large gaming companies with greater name recognition, marketing efforts and financial resources.
Any inability to generate sufficient cash flow or refinance our indebtedness on favorable terms could adversely affect our financial condition. Our variable rate indebtedness exposes us to interest rate volatility, which could cause our debt service obligations to increase significantly. Borrowings under our Credit Facility are at variable rates of interest and expose us to interest rate volatility.
Any inability to generate sufficient cash flow or refinance our indebtedness on favorable terms could adversely affect our financial condition. 35 Our variable rate indebtedness exposes us to interest rate volatility, which could cause our debt service obligations to increase significantly. Borrowings under our Credit Facility are at variable rates of interest and expose us to interest rate volatility.
Any such government investigations, prosecutions or other legal proceedings or actions could have a material adverse effect on our business, financial condition and results of operations. The regulatory framework which governs our business, and its interpretation, may be subject to change which we may fail to anticipate and/or respond to.
Any such government investigations, prosecutions or other legal proceedings or actions could have a material adverse effect on our business, financial condition and results of operations. 18 The regulatory framework which governs our business, and its interpretation, may be subject to change which we may fail to anticipate and/or respond to.
Any material increase, or the adoption of additional taxes or fees, could adversely affect our future financial results. 29 There can be no assurance that governments in jurisdictions in which we conduct our business, or the federal government, will not enact legislation that increases gaming tax rates.
Any material increase, or the adoption of additional taxes or fees, could adversely affect our future financial results. There can be no assurance that governments in jurisdictions in which we conduct our business, or the federal government, will not enact legislation that increases gaming tax rates.
General economic pressures have the potential to reduce revenues of state governments from traditional tax sources, which may cause state legislatures or the federal government to be more inclined to increase gaming tax rates. Future changes to US and non-US tax laws could adversely affect our business.
General economic pressures have the potential to reduce revenues of state governments from traditional tax sources, which may cause state legislatures or the federal government to be more inclined to increase gaming tax rates. New and future changes to US and non-US tax laws could adversely affect our business.
In addition, the US government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, an increase in the tax rate applicable to global intangible low-taxed income, the elimination of certain tax exemptions and the imposition of minimum taxes or surtaxes on certain types of income.
In addition, the US government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, an increase in the tax rate applicable to global intangible low-taxed income, the elimination of certain tax exemptions and the imposition of further minimum taxes or surtaxes on certain types of income.
These changes could materially impact the way we do business, and if we are unable to adjust to those changes quickly and effectively, there could be an adverse effect on our business, financial condition, results of operations and prospects. 28 A portion of our casinos are located on leased property.
These changes could materially impact the way we do business, and if we are unable to adjust to those changes quickly and effectively, there could be an adverse effect on our business, financial condition, results of operations and prospects. A portion of our casinos are located on leased property.
Should the value of long-lived assets or goodwill become impaired, our financial condition and results of operations may be adversely affected. 31 Our operations have historically been subject to seasonal variations and quarterly fluctuations in operating results, and we can expect to experience such variations and fluctuations in the future.
Should the value of long-lived assets or goodwill become impaired, our financial condition and results of operations may be adversely affected. Our operations have historically been subject to seasonal variations and quarterly fluctuations in operating results, and we can expect to experience such variations and fluctuations in the future.
Certain of these laws and regulations impose strict, and under certain circumstances joint and several, liability on a current or previous owner or operator of property for the costs of remediating regulated materials on or emanating from our property. The costs of investigation, remediation or removal of those substances may be substantial.
Certain of these laws and regulations impose strict, and under certain circumstances joint and several, liability on the current or previous owner or operator of property for the costs of remediating regulated materials on or emanating from our property. The costs of investigation, remediation or removal of those substances may be substantial.
As a result, our customers’ or employee’s information may be lost, disclosed, accessed or taken without our customers’ or employees’ consent. 33 In addition, third-party service providers and other business partners process and maintain proprietary business information and data related to our employees, customers, suppliers and other business partners.
As a result, our customers’ or employee’s information may be lost, disclosed, accessed, or taken without our customers’ or employees’ consent. In addition, third-party service providers and other business partners process and maintain proprietary business information and data related to our employees, customers, suppliers and other business partners.
The US Congress, the Organization for Economic Co-operation and Development and other government agencies in jurisdictions where Bally’s and its affiliates do business have had an extended focus on issues related to the taxation of multinational corporations.
The US Congress, the Organization for Economic Co-operation and Development (the “OECD”) and other government agencies in jurisdictions where Bally’s and its affiliates do business have had an extended focus on issues related to the taxation of multinational corporations.
Either result could significantly impair our operations. The time and effort needed to successfully complete the application process could impact our ability to attract, hire and retain top talent. 30 We are subject to risks associated with labor relations, labor costs and labor disruptions.
Either result could significantly impair our operations. The time and effort needed to successfully complete the application process could impact our ability to attract, hire and retain top talent. We are subject to risks associated with labor relations, labor costs and labor disruptions.
The global spread of the COVID-19 pandemic, which began in early 2020, resulted in governments, public institutions and other organizations imposing or recommending, and businesses and individuals implementing, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation, stay-at-home directives, requirements that individuals wear masks or other face coverings, limitations on the size of gatherings, closures of work facilities, schools, public buildings and businesses, cancellation of events, including sporting events, concerts, conferences and meetings and quarantines and lock-downs.
For example, the global spread of the COVID-19 pandemic, which began in early 2020, resulted in governments, public institutions and other organizations imposing or recommending, and businesses and individuals implementing, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation, stay-at-home directives, requirements that individuals wear masks or other face coverings, limitations on the size of gatherings, closures of work facilities, schools, public buildings and businesses, cancellation of events, including sporting events, concerts, conferences and meetings and quarantines and lock-downs.
For example, our highest value customers may be unwilling to provide the additional detail required by us in the UK to ascertain their sources of wealth, the affordability of their leisure spending with us or their risk of gambling related harm or vulnerability, and to continue to verify such information. We hold licenses issued by the GBGC.
For example, our highest value customers may be unwilling to provide the additional information and/or documentation required by us in the UK to ascertain their sources of wealth, the affordability of their leisure spending with us or their risk of gambling related harm or vulnerability, and to continue to verify such information. We hold licenses issued by the GBGC.
Further competition from Internet lotteries and other Internet wagering gaming services, which allow their customers to wager on a wide variety of sporting events and play Las Vegas-style casino games from home, could divert customers from the facilities we own and thus adversely affect our business.
Further competition from online lotteries and other online wagering gaming services, which allow their customers to wager on a wide variety of sporting events and play Las Vegas-style casino games from home, could divert customers from the facilities we own and thus adversely affect our business.
The holders of such licenses are bound to meet stringent compliance requirements relating to matters such as AML, safer gambling, data protection, advertising and consumer rights issues. Compliance with such requirements is incorporated into the relevant licenses as a licensing condition (or similar) with a corresponding requirement for us to comply with such onerous requirements.
The holders of such licenses are bound to meet stringent compliance requirements relating to matters such as AML, safer gambling, data protection, advertising and consumer rights issues. Compliance with such requirements is incorporated into the relevant licenses as a licensing condition (or similar) with a corresponding requirement for us to comply with various requirements.
Such Internet wagering services are likely to expand in future years and become more accessible to domestic gamblers as a result of US Department of Justice positions related to the application of federal laws to intrastate Internet gaming and initiatives in some states to consider legislation to legalize intrastate Internet wagering.
Such online wagering services are likely to expand in future years and become more accessible to domestic gamblers as a result of US Department of Justice positions related to the application of federal laws to intrastate online gaming and initiatives in some states to consider legislation to legalize intrastate online wagering.
There is also a risk that civil and criminal proceedings, including class actions brought by or on behalf of prosecutors or public entities, incumbent monopoly providers or private individuals, could be initiated against us or providers of our Infrastructure Services in unregulated markets.
There is also a risk that civil and criminal proceedings, including class actions brought by or on behalf of prosecutors or public entities, incumbent monopoly providers or private individuals, could be initiated against us or providers of our Infrastructure Services in unregulated jurisdictions.
Increased competitive pressures may adversely affect our ability to continue to attract customers or affect our ability to compete efficiently. 13 Several of our casinos and resorts are located in jurisdictions that restrict gaming to certain areas and/or may be affected by state laws that currently prohibit or restrict gaming operations.
Increased competitive pressures may adversely affect our ability to continue to attract customers or affect our ability to compete efficiently. Several of our casinos and resorts are in jurisdictions that restrict gaming to certain areas and/or may be affected by state laws that currently prohibit or restrict gaming operations.
Our insurance and self-insurance programs may not be adequate to cover future claims. Although we maintain insurance that we believe is customary and appropriate for our business, we cannot assure you that insurance will be available or adequate to cover all losses and damage to which our business or our assets might be subjected.
Our insurance and self-insurance programs may not be adequate to cover future claims. Although we maintain insurance that we believe is customary and appropriate for our business, we cannot assure that such insurance programs will be available or adequate to cover all losses and damage to which our business or our assets might be subjected.
Compliance, Regulatory and Legal Risks • We are subject to extensive laws, regulation and licensing, and gaming authorities have significant control over our operations, which could have an adverse effect on our business. • Failure to comply with the terms of the Regulatory Agreement could result in a breach and could harm our business. • We or certain third parties that we rely on may fail to establish and maintain effective and compliant anti‑money laundering, counter terrorism financing, safer gambling, fraud detection, risk management and other regulatory policies, procedures and controls. • Our business is subject to a variety of US and foreign laws, many of which are unsettled and still developing, and which could subject us to claims or otherwise harm our business across jurisdictions which could have a material adverse effect on our financial condition and results of operations. • Our growth prospects depend on the legal status of real-money gaming in various jurisdictions and legalization may not occur in as many jurisdictions as we expect, or may occur at a slower pace than we anticipate which could adversely affect our future results of operations.
Compliance, Regulatory and Legal Risks • We are subject to extensive laws, regulation and licensing, and gaming authorities have significant control over our operations, which could have an adverse effect on our business. • Failure to comply with the terms of the Regulatory Agreement could result in a breach and could harm our business. • We are subject to extensive environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities. • We or certain third parties that we rely on may fail to establish and maintain effective and compliant anti‑money laundering, counter terrorism financing, safer gambling, fraud detection, risk management and other regulatory policies, procedures and controls. • Our business is subject to a variety of US and foreign laws, many of which are unsettled and still developing, and which could subject us to claims or otherwise harm our business across jurisdictions which could have a material adverse effect on our financial condition and results of operations. • Our growth prospects depend on the legal status of real money gaming in various jurisdictions and legalization may not occur in as many jurisdictions as we expect or may occur at a slower pace than we anticipate which could adversely affect our future results of operations.
We will be reliant on effective payment processing services from a limited number of providers in each of the markets in which we operate. The provision of convenient, trusted, fast and effective payment processing services to our customers and potential customers is critical to our business.
Business Operational Risks We will be reliant on effective payment processing services from a limited number of providers in each of the markets in which we operate. The provision of convenient, trusted, fast and effective payment processing services to our customers and potential customers is critical to our business.
In the event of a dispute arising in connection with operations in a foreign jurisdiction where we conduct business, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of the courts of the UK or enforcing UK judgments in such other jurisdictions.
In the event of a dispute arising in connection with operations in a foreign jurisdiction where we conduct business, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of the courts of the US or enforcing US judgments in such other jurisdictions.
We currently hold all state and local licenses and related approvals necessary to conduct our present operations, but must periodically apply to renew many of these licenses and registrations and have the suitability of certain of our directors, officers and employees renewed.
We currently hold all licenses and related approvals necessary to conduct our present operations but must periodically apply to renew many of these licenses and registrations and have the suitability of certain of our directors, officers and employees renewed.
The law in this area has been rapidly evolving, and additional legislative developments may occur at the federal and state levels that would accelerate the proliferation of certain forms of Internet gaming in the US.
The law in this area has been rapidly evolving, and additional legislative developments may occur at the federal and state levels that would accelerate the proliferation of certain forms of online gaming in the US.
Business Operational Risks • We are reliant on effective payment processing services from a limited number of providers in each of the markets in which we operate. • Our profitability will be dependent, in part, on return to players. • We extend credit to a portion of our customers, and we may not be able to collect gaming receivables from our credit customers. • Declining popularity of games and changes in device preferences of players could have a negative effect on our business. • 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. • We may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate acquired businesses into our company or otherwise manage the growth associated with multiple acquisitions. • We face risks associated with growth and acquisitions. • Our results of operations and financial condition could be adversely affected by the occurrence of natural disasters, such as hurricanes or other catastrophic events, including war and terrorism. 12 Cybersecurity and Technology Risks • We rely on information technology, Internet infrastructure 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.
Business Operational Risks • We are reliant on effective payment processing services from a limited number of providers in each of the markets in which we operate. • Our profitability will be dependent, in part, on return to players. • We extend credit to a portion of our customers, and we may not be able to collect gaming receivables from our credit customers. • Declining popularity of games and changes in device preferences of players could have a negative effect on our business. • 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. • We may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate acquired businesses into our company or otherwise manage the growth associated with multiple acquisitions. • We face risks associated with growth and acquisitions. • Our results of operations and financial condition could be adversely affected by the occurrence of natural disasters, such as hurricanes, or other catastrophic events, including war, terrorism and public health crises such as the COVID-19 pandemic. 13 Cybersecurity, Data Privacy and Technology Risks • We rely on information technology, Internet infrastructure 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 by cybersecurity and data privacy incidents.
There can be no assurance that we will not face similar challenges and difficulties with respect to new development projects, such as our planned project in Chicago, or expansion efforts that we may undertake, which could result in significant sunk costs that we may not be able to fully recoup or that otherwise have a material adverse effect on our financial condition and results of operations.
There can be no assurance that we will not face similar challenges and difficulties with respect to new development projects, such as the permanent casino project in Chicago, or expansion efforts that we may undertake, which could result in significant sunk costs that we may not be able to fully recoup or that otherwise have a material adverse effect on our financial condition and results of operations.
Construction projects, such as our planned project in Chicago, entail significant risks, which can substantially increase costs or delay completion of a project. Such risks include shortages of materials or skilled labor, unforeseen engineering, environmental or geological problems, work stoppages, weather interference and unanticipated cost increases. Most of these factors are beyond our control.
Construction projects, such as our construction of the permanent casino in Chicago, entail significant risks, which can substantially increase costs or delay completion of a project. Such risks include shortages of materials or skilled labor, unforeseen engineering, environmental or geological problems, work stoppages, weather interference and unanticipated cost increases. Most of these factors are beyond our control.
Legislation in various forms to ban or substantially curtail indoor tobacco smoking in public places has been enacted or introduced in many jurisdictions, including some of the jurisdictions in which we operate. We believe the smoking restrictions can significantly impact business volumes.
Legislation in various forms to ban or substantially curtail indoor tobacco smoking in public places have been enacted or introduced in many jurisdictions, including some of the jurisdictions in which we operate. We believe these smoking restrictions can significantly impact business volumes.
As of December 31, 2022, we had approximately $3.56 billion of total indebtedness outstanding consisting of $1.93 billion outstanding under our term loan facility (the “Term Loan”) pursuant to the terms of a credit agreement we entered into on October 1, 2021 (the “Credit Agreement”) with Deutsche Bank AG New York Branch, as administrative agent and collateral agent, and the lenders party thereto, and $1.5 billion in aggregate principal amount of outstanding 5.625% senior notes due 2029 and 5.875% senior notes due 2031 (collectively, the “Senior Notes”).
As of December 31, 2023, we had approximately $3.73 billion of total indebtedness outstanding consisting of $1.91 billion outstanding under our term loan facility (the “Term Loan”) pursuant to the terms of a credit agreement we entered into on October 1, 2021 (the “Credit Agreement”) with Deutsche Bank AG New York Branch, as administrative agent and collateral agent, and the lenders party thereto, and $1.5 billion in aggregate principal amount of outstanding 5.625% senior notes due 2029 and 5.875% senior notes due 2031 (collectively, the “Senior Notes”).
Adverse developments affecting economies throughout the world including a general tightening of the availability of credit, increasing energy costs, rising prices, inflation, acts of war or terrorism, natural disasters, declining consumer confidence, significant declines in the stock market or epidemics, pandemics or other health-related events or widespread illnesses, like the COVID-19 pandemic, could lead to a reduction in visitors to our properties, including those that stay in our hotels, or discretionary spending by our customers on entertainment and leisure activities, which could adversely affect our business, financial condition and results of operations.
Adverse developments affecting economies throughout the world including a general tightening of the availability of credit, increasing energy costs, rising prices, inflation, acts of war or terrorism, natural disasters, declining consumer confidence, significant declines in the stock market or epidemics, pandemics or other health-related events or widespread illnesses, like the COVID-19 pandemic, could lead to a reduction in visitors to our properties, including those that stay in our hotels, or discretionary spending by our customers on entertainment and leisure activities, which could adversely affect our business, financial condition and results of operations. 14 A period of sustained inflation could impact consumer spending and result in higher operating costs.
We operate certain branded sites, including sites branded as Virgin Games, Double Bubble Bingo and Monopoly Casino. All such branded sites operated by us are reliant on the use of highly trusted and recognizable brands which are owned by third parties (the “Third Party Brands”).
Our branded sites are heavily reliant on well-known brands owned by third parties. We operate certain branded sites, including sites branded as Virgin Games, Double Bubble Bingo and Monopoly Casino. All such branded sites operated by us are reliant on the use of highly trusted and recognizable brands which are owned by third parties (the “Third Party Brands”).
Further, we may incur other liabilities that do not constitute indebtedness. The risks that we face based on our outstanding indebtedness may intensify if we incur additional indebtedness or financing obligations in the future.
Further, we may incur other liabilities that do not constitute indebtedness under the Credit Facility. The risks that we face based on our outstanding indebtedness may intensify if we incur additional indebtedness or financing obligations in the future.
If the financial markets do not provide the long-term returns that are expected, we could be required to make larger contributions. The equity markets can be very volatile, and during 2022 displayed meaningful volatility and, therefore, our estimate of future contribution requirements can change dramatically in relatively short periods of time.
If the financial markets do not provide the long-term returns that are expected, we could be required to make larger contributions. The equity markets can be very volatile, and, therefore, our estimate of future contribution requirements can change dramatically in relatively short periods of time.
This indebtedness may have important negative consequences for us, including: • limiting our ability to satisfy obligations; • increasing vulnerability to general adverse economic and industry conditions; • limiting flexibility in planning for, or reacting to, changes in our businesses and the markets in which we conduct business; • increasing vulnerability to, and limiting our ability to react to, changing market conditions, changes in industry and economic downturns; • limiting our ability to obtain additional financing to fund working capital requirements, capital expenditures, debt service, general corporate or other obligations; • subjecting us to a number of restrictive covenants that, among other things, limit our ability to pay dividends and distributions, make acquisitions and dispositions, borrow additional funds and make capital expenditures and other investments; • limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and/or interest payments on outstanding debt; • exposing us to interest rate risk due to the variable interest rate on borrowings under our Credit Facility; • causing our failure to comply with the financial and restrictive covenants contained in our current or future indebtedness, which could cause a default under that indebtedness (and other indebtedness of ours) and which, if not cured or waived, could adversely affect us; and • affecting our ability to renew gaming and other licenses necessary to conduct our business. 34 Though we have significant amounts of indebtedness outstanding, we have the ability to borrow the entire $620.0 million under our Revolving Credit Facility and may issue or incur additional indebtedness to fund our operations, including as necessary to execute on our growth strategy.
This indebtedness may have important negative consequences for us, including: • limiting our ability to satisfy obligations; • increasing vulnerability to general adverse economic and industry conditions; • limiting flexibility in planning for, or reacting to, changes in our businesses and the markets in which we conduct business; • increasing vulnerability to, and limiting our ability to react to, changing market conditions, changes in industry and economic downturns; • limiting our ability to obtain additional financing to fund working capital requirements, capital expenditures, debt service, general corporate or other obligations; • subjecting us to a number of restrictive covenants that, among other things, limit our ability to pay dividends and distributions, make acquisitions and dispositions, borrow additional funds and make capital expenditures and other investments; • limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and/or interest payments on outstanding debt; • exposing us to interest rate risk due to the variable interest rate on borrowings under our Credit Facility; • causing our failure to comply with the financial and restrictive covenants contained in our current or future indebtedness, which could cause a default under that indebtedness (and other indebtedness of ours) and which, if not cured or waived, could adversely affect us; and • affecting our ability to renew gaming and other licenses necessary to conduct our business.
Such transactions would generally require notice and/or approval of applicable gaming authorities, and our financing counterparties, including lenders, might be subject to various licensing and related approval procedures in the various jurisdictions in which we manage gaming facilities.
Such transactions would generally require notice and/or approval of applicable gaming authorities, and our financing counterparties, including lenders, might be subject to various licensing and related approval procedures in the various jurisdictions in which we conduct gaming operations.
Any of these factors could have a material adverse effect on our business, financial condition and results of operations. Our activities are affected by the General Data Protection Regulation in the UK and the EU (“GDPR”).
Any of these factors could have a material adverse effect on our business, financial condition and results of operations. Our activities are affected by the General Data Protection Regulation, as implemented in each of the UK and the EU (collectively, “GDPR”).
In particular, our leases with GLPI require annual rent payments of $111.1 million in 2023, which is subject to escalation annually, and obligate us to make specified minimum capital expenditures with respect to the leased properties.
In particular, our leases with GLPI require annual rent payments of $112.1 million in 2024, which is subject to escalation annually, and obligate us to make specified minimum capital expenditures with respect to the leased properties.
We, or one of our regulatory bodies, engage a number of third parties to provide gaming operating systems for the facilities we own. As a result, we rely on such third parties to provide uninterrupted services in order to run our business efficiently and effectively.
We engage a number of third parties to provide gaming operating systems for the facilities we own. As a result, we rely on such third parties to provide uninterrupted services in order to run our business efficiently and effectively.
As of December 31, 2022, we have a $620.0 million revolving credit facility (the “Revolving Credit Facility” or “Revolver” and, together with the Term Loan, the “Credit Facility”), of which there were $137.0 million in borrowings as of that date.
As of December 31, 2023, we have a $620.0 million revolving credit facility (the “Revolving Credit Facility” or “Revolver” and, together with the Term Loan, the “Credit Facility”), of which there were $335.0 million in borrowings as of that date.
If there is a prolonged disruption at our facilities due to natural disasters, terrorist attacks or other catastrophic events, our results of operations and financial condition would be adversely affected.
If there is a prolonged disruption at our facilities due to natural disasters, terrorist attacks, wars, public health crises or other catastrophic events, our results of operations and financial condition would be adversely affected.
Our largest shareholder owns a meaningful percentage of our outstanding common stock, which could limit the ability of other shareholders to influence corporate matters. Standard General L.P. (“Standard General”), our largest shareholder, beneficially owned 22.7% of our outstanding common stock as of February 14, 2023. Standard General’s Managing Partner and Chief Investment Officer serves as the Chairman of our Board.
Our largest shareholder owns a meaningful percentage of our outstanding common stock, which could limit the ability of other shareholders to influence corporate matters. Standard General L.P. (“Standard General”), our largest shareholder, beneficially owned 26.4% of our outstanding common stock as of February 14, 2024. Standard General’s Managing Partner and Chief Investment Officer serves as the Chairman of our Board.
While the objectives of regulation may remain largely stable, the methods that operators are required to employ to meet those objectives is in a state of constant evolution and development. We must respond adequately to the challenges this presents.
While the objectives of regulation may remain largely stable, the methods that operators are required to employ to meet those objectives, and the interpretation of those objections by the regulator, are in a state of constant evolution and development. We must respond adequately to the challenges this presents.
We derive meaningful revenues from players located in jurisdictions in which we do not hold a license. We are exposed to exchange rate risks. Foreign exchange risk arises when individual group entities enter into transactions denominated in a currency other than their functional currency.
We derive meaningful revenues from players located in jurisdictions in which a license from that jurisdiction is not available. We are exposed to exchange rate risks. Foreign exchange risk arises when individual group entities enter into transactions denominated in a currency other than their functional currency.
Restrictions in our debt agreements or in the Regulatory Agreement might affect our ability to operate our business, might limit our ability to take advantage of potential business opportunities as they arise and might adversely affect the conduct of our current business, including by restricting our ability to finance future operations and capital needs and limiting our ability to engage in other business activities.
Restrictions in our debt agreements or in the Regulatory Agreement might affect our ability to operate our business, might limit our ability to take advantage of potential business opportunities as they arise and might adversely affect the conduct of our current business, including by restricting our ability to finance future operations and capital needs and limiting our ability to engage in other business activities. 34 Our existing and future indebtedness may limit our operating and financial flexibility.
As a result, the tax laws in the US, the UK and other countries in which Bally’s and its affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect Bally’s and its affiliates.
Furthermore, as a result of the Two-Pillar framework or other tax initiatives, the tax laws in the US, the UK and other countries in which Bally’s and its affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect Bally’s and its affiliates.
Therefore, even in cases in which a jurisdiction purports to license and regulate iGaming, the licensing and regulatory regimes can vary considerably in terms of business-friendliness, and at times may be intended to provide incumbent operators with advantages over new licensees. Therefore, some “liberalized” regulatory regimes are considerably more economically viable than others.
Therefore, even in cases in which a jurisdiction purports to license and regulate iGaming, the licensing and regulatory regimes can vary considerably in terms of business-friendliness, and at times may be intended to provide incumbent operators with advantages over new licensees.
We have invested in, formed strategic alliances with and announced proposed joint ventures with other companies, such as the Rhode Island VLT Company, LLC, the joint venture with IGT in Rhode Island (the “Joint Venture”), and we may expand those relationships or enter into similar relationships with additional companies which may require various state approvals which may or may not be granted.
We have invested in, formed strategic alliances with and announced proposed joint ventures with other companies, such as the RI Joint Venture, and we may expand those relationships or enter into similar relationships with additional companies which may require various state approvals which may or may not be granted.
If we are found to be in breach of our obligation to comply with such licensing requirements, then the GBGC may impose a financial penalty on us or impose other penalties, including removing or imposing conditions on the relevant gambling licenses.
If we are found to be in breach of our obligation to comply with such licensing requirements, then the GBGC may impose a financial penalty on us or impose other sanctions, including removing or imposing conditions on the relevant gambling licenses. Such action could have a material adverse effect on our financial performance.
Our business is particularly sensitive to energy prices and a rise in energy prices could harm our operating results. We are a large consumer of electricity and other energy and, therefore, higher energy prices may have an adverse effect on our results of operations. Accordingly, increases in energy costs may have a negative impact on our operating results.
We are a large consumer of electricity and other energy and, therefore, higher energy prices may have an adverse effect on our results of operations. Accordingly, increases in energy costs may have a negative impact on our operating results.
Furthermore, if any of our sports data partners terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate provider, and may not be able to secure similar terms or replace such providers in an acceptable time frame.
As such, a failure or significant interruption in our service may harm our reputation, business and operating results. 28 Furthermore, if any of our sports data partners terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate provider, and may not be able to secure similar terms or replace such providers in an acceptable time frame.
Among other things, the Regulatory Agreement prohibits us and our subsidiaries from owning, operating, managing or providing gaming specific goods and services to any gaming facilities in Rhode Island (other than Bally’s Twin River and Bally’s Tiverton), Massachusetts, Connecticut or New Hampshire, which may adversely affect our growth and market opportunity in those states.
Among other things, the Regulatory Agreement prohibits us and our subsidiaries from owning, operating, managing or providing gaming specific goods and services to any gaming facilities in Rhode Island (other than Bally’s Twin River and Bally’s Tiverton), Massachusetts, Connecticut or New Hampshire, which may adversely affect our growth and market opportunity in those states. 17 We are subject to extensive environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities.
Catastrophic events, such as terrorist attacks in the US and elsewhere, have had a negative effect on travel and leisure expenditures, including lodging, gaming (in some jurisdictions) and tourism. We cannot accurately predict the extent to which such events may affect us, directly or indirectly, in the future.
Catastrophic events, such as terrorist attacks and global and regional conflicts (e.g., the war in Ukraine and conflict in the Middle East), have had a negative effect on travel and leisure expenditures, including lodging, gaming (in some jurisdictions) and tourism. We cannot accurately predict the extent to which such events may affect us, directly or indirectly, in the future.
We have entered into strategic partnerships with Sinclair, the National Hockey League and others and may enter into relationships with advertisers, casinos and other third parties in order to attract users to our platform. These relationships along with providers of online services, search engines, social media, directories and other websites and e-commerce businesses direct consumers to our platform.
(“Sinclair”), the National Hockey League, MLB Professional Development Leagues, LLC, among others, and may enter into relationships with advertisers, casinos and other third parties in order to attract users to our platform. These relationships along with providers of online services, search engines, social media, directories and other websites and e-commerce businesses direct consumers to our platform.
A downturn in the financial markets or market volatility (like those now being experienced) could negatively impact our ability to access capital and financing (including financing necessary for acquisitions or to refinance our existing indebtedness) on acceptable terms and prices, that we would otherwise need in connection with the operation of our business. 35 Risks Related to our Common Stock The market price of our common stock could fluctuate significantly.
A downturn in the financial markets or market volatility could negatively impact our ability to access capital and financing (including financing necessary for acquisitions or to refinance our existing indebtedness) on acceptable terms and prices, that we would otherwise need in connection with the operation of our business.
A vast majority of the revenues currently generated by Gamesys, our wholly owned subsidiary, are from the UK market and are conducted in British Pound Sterling (“GBP”) and are therefore susceptible to any movements in exchange rates between GBP and US Dollars (“USD”). Any exchange rate risk may materially adversely affect our business, financial condition and results of operations.
A vast majority of the revenues currently generated by Gamesys, our wholly owned subsidiary, are from the UK and are conducted in British Pound Sterling (“GBP”) and are therefore susceptible to any movements in exchange rates between GBP and US Dollars (“USD”).
We are subject to the costs and risks generally associated with labor disputes and organizing activities related to unionized labor. From time to time, our operations may be disrupted by strikes, public demonstrations or other coordinated actions and publicity. We may incur increased legal costs and indirect labor costs as a result of contractual disputes, negotiations or other labor-related disruptions.
We are subject to the costs and risks generally associated with labor disputes and organizing activities related to unionized labor. From time to time, our operations may be disrupted by strikes, public demonstrations or other coordinated actions and publicity.
There have been and are periods of time when the US securities markets have experienced significant price fluctuations. These price fluctuations may be day-to-day or they may last for extended periods of time.
Risks Related to our Common Stock The market price of our common stock could fluctuate significantly. There have been and are periods of time when the US securities markets have experienced significant price fluctuations. These price fluctuations may be day-to-day or they may last for extended periods of time.
We are subject to various federal, state and local environmental laws and regulations that govern activities that may have adverse environmental effects, such as discharges to air and water, as well as the management and disposal of solid, animal and hazardous wastes and exposure to hazardous materials.
We are subject to various environmental laws and regulations that govern activities that may have adverse environmental effects, such as discharges to air and water, as well as the management and disposal of solid, animal and hazardous wastes and exposure to hazardous materials. These laws and regulations, which are complex and subject to change, include US Environmental Protection Agency regulations.
A period of sustained inflation could impact consumer spending and result in higher operating costs. A period of sustained inflation, particularly in the US and UK, could materially impact our business. The effects of inflation on discretionary consumer spending could result in the reduction of the demand for entertainment and leisure activities.
A period of sustained inflation, particularly in the US and UK, could materially impact our business. The effects of inflation on discretionary consumer spending could result in the reduction of the demand for entertainment and leisure activities. In addition, inflation generally affects our business by increasing our cost of labor.
Japan has been a focus of our international interactive segment and has yet to introduce its own licensing regime applicable to our business. 20 There is a risk that such jurisdictions may enact regulations relating to online real money gaming and that we may be required to register our activities or obtain licenses (or obtain further registrations or licenses, as applicable), pay taxes, royalties or fees or that the operation of online gambling businesses in such jurisdictions may be prohibited entirely.
There is a risk that such jurisdictions may enact regulations relating to online real money gaming and that we may be required to register our activities or obtain licenses (or obtain further registrations or licenses, as applicable), pay taxes, royalties or fees or that the operation of online gambling businesses in such jurisdictions may be prohibited entirely.
Such action could have a material adverse effect on our financial performance. 18 New legislation governing the online gaming industry may be introduced in the UK which limits or restricts our operating model in that market. In December 2020, the UK government commenced a review of the Gambling Act.
New legislation governing the online gaming industry may be introduced in the UK which limits or restricts our operating model in that market. In December 2020, the UK government commenced a review of the Gambling Act.
However, there is a risk that any replacement branded site offered by us may not successfully retain the custom of those players, and in the event that we lose the right to use any of the Third Party Brands, our business, financial condition and results of operations may be materially adversely affected.
However, there is a risk that any replacement branded site offered by us may not successfully retain those players, and if we lose the right to use any of the Third Party Brands, our business, financial condition and results of operations may be materially adversely affected. 27 We are exposed to the risk that the reputation of the Third Party Brands may be adversely affected by the activities of third parties over whom we have no control.
If we fail to detect fraud, theft or cheating, including by our customers and employees, our reputation may suffer which could harm our brand and reputation and negatively impact our business, financial condition and results of operations and can subject us to investigations and litigation.
We are currently unable to predict whether such changes will occur and, if so, the ultimate impact on our business. 29 If we fail to detect fraud, theft or cheating, including by our customers and employees, our reputation may suffer which could harm our brand and reputation and negatively impact our business, financial condition and results of operations and can subject us to investigations and litigation.
We must contribute to a number of multi-employer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain union-represented employees.
Our obligation to fund multi-employer defined benefit pension plans to which we are a party may adversely affect us. We must contribute to a number of multi-employer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain union-represented employees.
We derive meaningful revenues from players located in jurisdictions in which we do not hold a license. In certain jurisdictions, online gambling is either not regulated at all, is subject to very limited regulation or its legality is unclear.
Therefore, some “liberalized” regulatory regimes are considerably more economically viable than others. 20 We derive meaningful revenues from players located in jurisdictions in which we do not hold a license. In certain jurisdictions, online gambling is either not regulated at all, is subject to very limited regulation or its legality is unclear.
Overreliance on certain third parties or our inability to extend existing relationships or agree to new relationships may cause unanticipated costs for us and impact our financial performance in the future.
Overreliance on certain third parties or our inability to extend existing relationships or agree to new relationships may cause unanticipated costs for us and impact our financial performance in the future. We have entered into strategic partnerships with Sinclair Broadcast Group, Inc.
We may also be hindered or prevented from enforcing their rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity. 21 We may also enter into agreements and conduct activities outside of the jurisdictions in which we currently carry on business, which expansion may present challenges and risks as a result of the factors described above that we have not faced in the past, any of which could have a material adverse effect on our business, financial condition and results of operations.
We may also enter into agreements and conduct activities outside of the jurisdictions in which we currently carry on business, which expansion may present challenges and risks as a result of the factors described above that we have not faced in the past, any of which could have a material adverse effect on our business, financial condition and results of operations.
General Economic Conditions Our business is particularly sensitive to reductions in discretionary consumer spending. Our business is particularly sensitive to reductions from time to time in discretionary consumer spending. Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control.
Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control.
Operators within the online gambling industry, including Bally’s, have commonly taken a risk-based approach when supplying their online gambling services into jurisdictions in which it is not possible to obtain a gambling license.
Therefore, such transactions are in fact heavily regulated but are not themselves regulated in the jurisdiction within which the player is ultimately located. Operators within the online gambling industry, including Bally’s, have commonly taken a risk-based approach when supplying their online gambling services into jurisdictions in which it is not possible to obtain a gambling license.
We are subject to numerous laws that may expose us to liabilities or have a significant adverse impact on our operations. Changes to any such laws could have a material adverse effect on our operations and financial condition. Our business is subject to a variety of laws, rules, regulations and ordinances.
Changes to any such laws could have a material adverse effect on our operations and financial condition. Our business is subject to a variety of laws, rules, regulations, and ordinances.
Compliance, Regulatory and Legal Risks We are subject to extensive regulation and licensing, and gaming authorities have significant control over our operations, which could have an adverse effect on our business.
Failure to do so could result in a material adverse effect on our business, financial condition and results of operations. Compliance, Regulatory and Legal Risks We are subject to extensive laws, regulation and licensing, and gaming authorities have significant control over our operations, which could have an adverse effect on our business.
There can be no assurance that we will be able to extend or enter into replacement agreements. If we are able to extend or enter into replacement agreements, there can be no assurance as to whether the terms will be on comparable terms to the existing agreements.
If we are able to extend or enter into replacement agreements, there can be no assurance as to whether the terms will be on comparable terms to the existing agreements. We may also face organizing activities that could result in additional employees becoming unionized.
Such potential proceedings could involve substantial litigation expense, penalties, fines, seizure of assets, injunctions or other restrictions being imposed upon our licensees or other business partners, while diverting the attention of key executives.
Such potential proceedings could involve substantial litigation expense, penalties, fines, seizure of assets, injunctions or other restrictions being imposed upon our licensees or other business partners, while diverting the attention of key executives. Such proceedings could have a material adverse effect on our business, financial condition and results of operations, as well as impact our reputation.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES The Company’s Casinos & Resorts reportable segment consists of 16 properties managed/owned by Bally’s as of December 31, 2022, as shown in the table below: Property Location Type Built/Acquired Gaming Square Footage Slot Machines Table Games Hotel Rooms Food and Beverage Outlets Racebook Sportsbook Bally’s Twin River Lincoln Casino Resort (1) Lincoln, RI Casino and Resort 2004 162,420 3,802 114 136 21 Yes Yes Hard Rock Hotel & Casino Biloxi (1)(3) Biloxi, MS Casino and Resort 2014 50,984 977 55 479 15 No Yes Bally’s Tiverton Casino & Hotel (1)(3) Tiverton, RI Casino and Hotel 2018 33,840 1,000 32 83 7 Yes Yes Bally’s Dover Casino Resort (1)(3) Dover, DE Casino, Resort and Raceway 2019 84,075 1,918 30 500 8 Yes Yes Bally’s Black Hawk (1)(2)(3) Black Hawk, CO Three Casinos 2020 34,632 577 33 — 7 No Yes Bally’s Kansas City Casino (1) Kansas City, MO Casino 2020 42,288 906 24 — 4 No No Bally’s Vicksburg Casino (1) Vicksburg, MS Casino and Hotel 2020 32,608 453 7 89 2 No Yes Bally’s Atlantic City Casino Resort (1) Atlantic City, NJ Casino and Resort 2020 84,236 1,189 88 1,205 12 No Yes Bally’s Shreveport Casino & Hotel (1) Shreveport, LA Casino and Hotel 2020 30,000 1,186 40 403 6 No Yes Bally’s Lake Tahoe Casino Resort Lake Tahoe, NV Casino and Resort 2021 48,425 399 20 438 7 Yes Yes Bally’s Evansville Casino & Hotel (1)(3) Evansville, IN Casino and Hotel 2021 46,265 948 30 338 4 No Yes Bally’s Quad Cities Casino & Hotel (1)(3) Rock Island, IL Casino and Hotel 2021 39,604 813 20 205 5 No No Tropicana Las Vegas Casino and Resort (1)(3) Las Vegas, NV Casino and Resort 2022 37,904 597 33 1,470 5 No Yes Bally’s Arapahoe Park Aurora, CO Racetrack/OTB Site 2004 — — — — 5 Yes No __________________________________ (1) The properties noted above are required to be mortgaged under and are encumbered under our Credit Agreement.
Biggest changePROPERTIES The Company’s Casinos & Resorts reportable segment consists of 18 properties managed/owned by Bally’s as of December 31, 2023, as shown in the table below: Property Location Type Built/Acquired Gaming Square Footage Slot Machines Table Games Hotel Rooms Food and Beverage Outlets Racebook Sportsbook Bally’s Twin River Lincoln Casino Resort (1) Lincoln, RI Casino and Resort 2004 188,070 3,900 114 136 24 Yes Yes Hard Rock Hotel & Casino Biloxi (1)(3) Biloxi, MS Casino and Resort 2014 50,984 977 55 479 17 No Yes Bally’s Tiverton Casino & Hotel (1)(3) Tiverton, RI Casino and Hotel 2018 33,840 1,000 32 83 7 Yes Yes Bally’s Dover Casino Resort (1)(3) Dover, DE Casino, Resort and Raceway 2019 84,075 2,053 28 500 11 Yes Yes Bally’s Black Hawk (1)(2)(3) Black Hawk, CO Three Casinos 2020 34,632 546 33 — 7 Yes Yes Bally’s Kansas City Casino (1) Kansas City, MO Casino 2020 42,288 907 24 — 5 No No Bally’s Vicksburg Casino (1) Vicksburg, MS Casino and Hotel 2020 32,608 458 7 89 2 No Yes Bally’s Atlantic City Casino Resort (1) Atlantic City, NJ Casino and Resort 2020 82,979 1,171 84 1,205 12 No Yes Bally’s Shreveport Casino & Hotel (1) Shreveport, LA Casino and Hotel 2020 30,000 965 52 403 6 No Yes Bally’s Lake Tahoe Casino Resort Lake Tahoe, NV Casino and Resort 2021 46,665 392 20 438 10 Yes Yes Bally’s Evansville Casino & Hotel (1)(3) Evansville, IN Casino and Hotel 2021 46,265 940 30 338 4 No Yes Bally’s Quad Cities Casino & Hotel (1)(3) Rock Island, IL Casino and Hotel 2021 42,300 782 22 205 4 No Yes Tropicana Las Vegas Casino and Resort (1)(3) Las Vegas, NV Casino and Resort 2022 37,904 576 20 1,470 7 No Yes Bally’s Chicago Casino (4) Chicago, IL Casino 2023 34,894 791 56 — 6 No No Bally’s Arapahoe Park Aurora, CO Racetrack/OTB Site 2004 — — — — 5 Yes No Bally’s Golf Links at Ferry Point Bronx, NY Golf Course 2023 — — — — — — — __________________________________ (1) The properties noted above are required to be mortgaged under and are encumbered under our Credit Agreement.
Our interactive businesses operate primarily in leased office space located in the UK, Malta, Canada, US, Estonia, Sweden, Gibraltar, Isle of Man, Philippines, Hong Kong and Ceuta.
As of December 31, 2023, Bally’s had approximately 265,000 square feet of office space, including the corporate headquarters located in Providence, Rhode Island. Our interactive businesses operate primarily in leased office space located in the UK, US, Malta, Canada, Estonia, Sweden, Gibraltar, Isle of Man, Hong Kong and Philippines.
(2) These properties include Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino. (3) Properties leased from GLPI. Refer to Note 15 “ Leases ” for further information. As of December 31, 2022, Bally’s had approximately 285,000 square feet of office space, including the corporate headquarters located in Providence, Rhode Island.
(2) These properties include Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino. (3) Properties leased from GLPI. Refer to Note 17 “ Leases ” for further information. (4) Temporary casino facility, as a permanent casino resort is being constructed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe current liability for the estimated losses associated with these proceedings is not material to our consolidated financial condition and those estimated losses are not expected to have a material impact on our results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 37 PART II
Biggest changeThe current liability for the estimated losses associated with these proceedings is not material to our consolidated financial condition and those estimated losses are not expected to have a material impact on our results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 39 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny future determinations relating to our dividend policies will be made at the discretion of our Board and will depend on conditions then existing, including our financial condition, results of operations, contractual restrictions, capital and regulatory requirements and other factors our Board may deem relevant. 38 Holders At February 14, 2023, there were 240 holders of record of our common stock, although we believe there are a significantly larger number of beneficial owners of our common stock because many shares are held by brokers and other institutions on behalf of shareholders.
Biggest changeAny future determinations relating to our dividend policies will be made at the discretion of our Board and will depend on conditions then existing, including our financial condition, results of operations, contractual restrictions, capital and regulatory requirements and other factors our Board may deem relevant.
On February 10, 2020 and October 4, 2021, the Board approved an additional $100 million and $350 million for stock repurchases and payment of dividends, respectively. Share repurchases may be effected in various ways, which could include open-market or private repurchase transactions, accelerated share repurchase programs, tender offers or other transactions.
On February 10, 2020, and October 4, 2021, the Board approved an additional $100 million and $350 million for stock repurchases and payment of dividends, respectively. Share repurchases under publicly announced programs may be effected in various ways, which could include open-market or private repurchase transactions, accelerated share repurchase programs, tender offers or other transactions.
The performance graph assumes that $100 was invested on March 29, 2019 in each of our common stock, the S&P 500 and the Dow Jones US Gambling Index, and that all dividends were reinvested. The stock price performance shown in this graph is neither necessarily indicative of, nor intended to suggest, future stock price performance.
The performance graph assumes that $100 was invested on March 29, 2019 in each of our common stock, the S&P 500 and the Dow Jones US Gambling Index, and that all dividends were reinvested.
As of December 31, 2022, no shares of preferred stock have been issued. ITEM 6. [RESERVED]
As of December 31, 2023, no shares of preferred stock have been issued.
The following table provides information about share repurchases made by the Company of its common stock during the quarter ended December 31, 2022 (in thousands, except Average Price Paid per Share): Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs October 1, 2022 - October 31, 2022 50 $ 19.81 50 $ 214,392 November 1, 2022 - November 30, 2022 337 24.02 337 206,296 December 1, 2022 - December 31, 2022 516 22.76 516 194,558 903 $ 23.07 (a) 903 $ 194,558 __________________________________ (a) Weighted-average.
The following table provides information about share repurchases made by the Company of its common stock during the quarter ended December 31, 2023 (in thousands, except Average Price Paid per Share): Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs October 1, 2023 - October 31, 2023 — $ — — $ 164,100 November 1, 2023 - November 30, 2023 3,113 10.78 3,113 130,531 December 1, 2023 - December 31, 2023 2,694 13.01 2,694 95,477 5,807 $ 11.81 (a) 5,807 $ 95,477 __________________________________ (a) Weighted average.
Copyright© 2023 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved . Dividend Policy We do not currently intend to pay any dividends on our common stock in the foreseeable future.
The stock price performance shown in this graph is neither necessarily indicative of, nor intended to suggest, future stock price performance. 40 Dividend Policy We do not currently intend to pay any dividends on our common stock in the foreseeable future.
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COMPARISON OF 45 MONTH CUMULATIVE TOTAL RETURN* Among Bally’s Corporation, the S&P 500 Index and the Dow Jones US Gambling Index *$100 invested on March 29, 2019 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2023 Standard & Poor’s, a division of S&P Global. All rights reserved.
Added
Holders At February 14, 2024, there were 234 holders of record of our common stock, although we believe there are a significantly larger number of beneficial owners of our common stock because many shares are held by brokers and other institutions on behalf of shareholders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(5) Consists of the operating lease components contained within our triple net master lease dated June 4, 2021 with GLPI for the real estate assets used in the operation of Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities and Bally’s Black Hawk, the individual triple net lease with GLPI for the land underlying the operations of Tropicana Las Vegas, and the triple net lease assumed in connection with the acquisition of Bally’s Lake Tahoe for real estate and land underlying the operations of the Bally’s Lake Tahoe facility. 45 Year Ended December 31, 2021 (in thousands) Casinos & Resorts North America Interactive International Interactive Other Total Net income (loss) $ 186,287 $ (36,879) $ 24,337 $ (288,442) $ (114,697) Interest expense, net of interest income 37 (15) (27) 117,929 117,924 Provision (benefit) for income taxes 72,128 (8,281) (4,261) (63,963) (4,377) Depreciation and amortization 54,120 18,096 46,341 26,229 144,786 Non-operating (income) (1) — — (3) 61,074 61,071 Foreign exchange loss, net — 355 643 32,463 33,461 Transaction costs (2) — 12,682 1,444 70,417 84,543 Share-based compensation — — — 20,143 20,143 Gain on sale-leaseback (53,425) — — — (53,425) Contract termination expense — — — 30,000 30,000 Impairment charges 4,675 — — — 4,675 Other, net (3) (16,334) — 1,470 20,662 5,798 Allocation of corporate costs 70,217 1,629 — (71,846) — Adjusted EBITDA $ 317,705 $ (12,413) $ 69,944 $ (45,334) $ 329,902 __________________________________ (1) Non-operating income (expense) includes: (i) change in value of naming rights liabilities and (ii) gain on bargain purchases, (iii) loss on extinguishment of debt, and (iv) other, net.
Biggest changeYear Ended December 31, (in thousands) 2023 2022 2021 Adjusted EBITDAR Casinos & Resorts $ 428,968 $ 398,930 $ 345,276 International Interactive 343,559 321,651 69,944 North America Interactive (55,653) (65,729) (12,413) Other (63,770) (53,024) (45,334) Total 653,104 601,828 357,473 Rent expense associated with triple net operating leases (1) (125,775) (53,313) (27,571) Adjusted EBITDA 527,329 548,515 329,902 Interest expense, net of interest income (277,561) (208,153) (117,924) (Benefit) provision for income taxes (1,762) 28,923 4,377 Depreciation and amortization (350,408) (300,559) (144,786) Non-operating (income) expense (2) (12,688) 46,176 (61,071) Foreign exchange (gain) loss (11,019) 516 (33,461) Transaction costs (3) (80,376) (85,604) (84,543) Restructuring charges (4) (31,014) — — Decommissioning costs (5) (2,583) — — Share-based compensation (24,074) (27,912) (20,143) Gain on sale-leaseback, net 374,321 50,766 53,425 Planned business divestiture (6) (2,089) (5,585) — Impairment charges (7) (149,825) (463,978) (4,675) Diamond Sports Group non-cash liability (8) (144,883) — — Contract termination expense (9) — — (30,000) Other (10) (868) (8,651) (5,798) Net loss $ (187,500) $ (425,546) $ (114,697) __________________________________ (1) Consists of the operating lease components contained within our triple net master lease dated June 4, 2021 with GLPI for the real estate assets used in the operation of Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities, Bally’s Black Hawk, Hard Rock Biloxi and Bally’s Tiverton, the individual triple net lease with GLPI for the land underlying the operations of Tropicana Las Vegas, and the triple net lease assumed in connection with the acquisition of Bally’s Lake Tahoe for real estate and land underlying the operations of the Bally’s Lake Tahoe facility.
Adjusted EBITDA is defined as earnings for the Company, or where noted its reporting segments, before, in each case, interest expense, net of interest income, provision (benefit) for income taxes, depreciation and amortization, non-operating income, acquisition and other transaction related costs, share-based compensation and certain other gains or losses as well as, when presented for our reporting segments, an adjustment related to the allocation of corporate cost among segments.
Adjusted EBITDA is defined as earnings, or loss, for the Company, or where noted its reporting 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 our reporting segments, an adjustment related to the allocation of corporate cost among segments.
Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income, because it excludes the rent expense associated with our triple net operating leases with GLPI and the lease for real estate and land underlying the operations of the Bally’s Lake Tahoe property.
Consolidated Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income, because it excludes the rent expense associated with our triple net operating leases with GLPI and the lease for real estate and land underlying the operations of the Bally’s Lake Tahoe property.
The following is a summary of our critical accounting estimates and how they are applied in preparation of our consolidated financial statements. 50 Goodwill and Intangible Assets Assessing goodwill and indefinite-lived intangible assets for impairment is a process that involves significant judgment and requires a qualitative and quantitative analysis with many assumptions which fluctuate based on our business.
The following is a summary of our critical accounting estimates and how they are applied in preparation of our consolidated financial statements. Goodwill and Intangible Assets Assessing goodwill and indefinite-lived intangible assets for impairment is a process that involves significant judgment and requires a qualitative and quantitative analysis with many assumptions which fluctuate based on our business.
The interpretation of the IRC regulations related to the Tax Cuts and Jobs Acts, as it pertains to Section 163(j), is a critical estimate in the computation of U.S. federal taxes, and conforming states. Recently Issued Accounting Pronouncements For a discussion of recently issued financial accounting standards, refer to Note 4 “ Recently Issued Accounting Pronouncements ,” of Part II.
The interpretation of the IRC regulations related to the Tax Cuts and Jobs Acts, as it pertains to Section 163(j), is a critical estimate in the computation of U.S. federal taxes, and conforming states. 54 Recently Issued Accounting Pronouncements For a discussion of recently issued financial accounting standards, refer to Note 4 “ Recently Issued Accounting Pronouncements ,” of Part II.
This metric is included as supplemental disclosure because (i) we believe Adjusted EBITDAR is used by gaming operator analysts and investors to determine the equity value of gaming operators and (ii) financial analysts refer to Adjusted EBITDAR when valuing our business.
This metric is included as supplemental disclosure because (i) we believe Consolidated Adjusted EBITDAR is used by gaming operator analysts and investors to determine the equity value of gaming operators and (ii) financial analysts refer to Consolidated Adjusted EBITDAR when valuing our business.
Specifically, the Company applies the discounted cash flow (“DCF”) model under the income approach and the guideline company under the market approach and weighs the results of the two valuation methodologies based on the facts and circumstances surrounding the reporting unit.
Specifically, the Company applies the discounted cash flow (“DCF”) model under the income approach and the guideline company method under the market approach and weighs the results of the two valuation methodologies based on the facts and circumstances surrounding the reporting unit.
A valuation allowance is required when it is “more likely than not” that all or a portion of the deferred taxes will not be realized. The consolidated financial statements reflect expected future tax consequences of uncertain tax positions presuming the taxing authorities’ full knowledge of the position and all relevant facts.
A valuation allowance is required when it is “more likely than not” that all or a portion of the deferred tax assets will not be realized. The consolidated financial statements reflect expected future tax consequences of uncertain tax positions presuming the taxing authorities’ full knowledge of the position and all relevant facts.
Refer to “Our Operating Structure” in Part I, Item 1 “ Business ” of this Annual Report on Form 10-K and Note 21 “ Segment Reporting ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K for additional information on our segment reporting structure .
Refer to “Our Operating Structure” in Part I, Item 1 “ Business ” of this Annual Report on Form 10-K and Note 23 “ Segment Reporting ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K for additional information on our segment reporting structure.
The following table sets forth certain financial information associated with results of operations for the years ended December 31, 2022, 2021 and 2020. Non-gaming revenue includes hotel, food and beverage and retail, entertainment and other revenue. Non-gaming expenses include hotel, food and beverage and retail, entertainment and other expenses.
The following table sets forth certain financial information associated with results of operations for the years ended December 31, 2023, 2022 and 2021. Non-gaming revenue includes hotel, food and beverage and retail, entertainment and other revenue. Non-gaming expenses include hotel, food and beverage and retail, entertainment and other expenses.
In addition, Adjusted EBITDA and 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 non-GAAP financial measures of other companies.
In addition, consolidated Adjusted EBITDA and segment 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 non-GAAP financial measures of other companies.
Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards.
If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. For the quantitative goodwill impairment test, we estimate the fair value of the reporting unit and asset group using both income and market-based approaches.
If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. For the quantitative goodwill impairment test, we estimate the fair value of the reporting unit using both income and market-based approaches.
Item 8 of this Annual Report on Form 10-K for further detail. 52
Item 8 of this Annual Report on Form 10-K for further detail.
We did not pay cash dividends during the year ended December 31, 2022, nor do we currently intend to pay any dividends on our common stock in the foreseeable future.
We did not pay cash dividends during the year ended December 31, 2023, nor do we currently intend to pay any dividends on our common stock in the foreseeable future.
As of December 31, 2022, the Company has recorded this lease as a corresponding long-term financing obligation of $200.0 million. Capital Expenditures Capital expenditures are accounted for as either project, maintenance or capitalized software expenditures. Project capital expenditures are for fixed asset additions that expand an existing facility or create a new facility.
The Company recorded this lease with a corresponding long-term financing obligation of $200.0 million as of December 31, 2023 and 2022. Capital Expenditures Capital expenditures are accounted for as either project, maintenance or capitalized software expenditures. Project capital expenditures are for fixed asset additions that expand an existing facility or create a new facility.
“ Risk Factors ” and “ Cautionary Note Regarding Forward-Looking Statements ” in this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. 39 Executive Overview During 2022, we continued to grow our business by actively pursuing the acquisition and development of new gaming opportunities and reinvesting in our existing operations.
“ Risk Factors ” and “ Cautionary Note Regarding Forward-Looking Statements ” in this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. 41 Executive Overview During 2023, we continued to grow our business by actively pursuing new gaming opportunities and reinvesting in our existing operations.
Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” of our Annual Report on Form 10-K/A for the year ended December 31, 2021.
Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” of our Annual Report on Form 10-K for the year ended December 31, 2022.
The Master Lease has an initial term of 15 years and includes four, five-year options to renew and requires combined minimum annual payments of $52.0 million, subject to a minimum 1% annual escalation or greater escalation dependent on CPI.
The Master Lease has an initial term of 15 years and includes four, five-year options to renew and requires combined minimum annual payments of $100.5 million, subject to a minimum 1% annual escalation or greater escalation dependent on CPI.
As of December 31, 2022, there was $194.6 million available for use under the Capital Return Program, subject to limitations in our regulatory and debt agreements. Future share repurchases may be effected in various ways, which could include open-market or private repurchase transactions, accelerated stock repurchase programs, tender offers or other transactions.
As of December 31, 2023, there was $95.5 million available for use under the Capital Return Program, subject to limitations in our regulatory and debt agreements. Future share repurchases may be effected in various ways, which could include open-market or private repurchase transactions, accelerated stock repurchase programs, tender offers or other transactions.
Capitalized software expenditures relate to the creation, production and preparation of software for use in our online gaming operations. For the year ended December 31, 2022, capital expenditures were $212.3 million compared to $97.5 million in 2021.
Capitalized software expenditures relate to the creation, production and preparation of software for use in our online gaming operations. For the year ended December 31, 2023, capital expenditures were $311.5 million compared to $212.3 million in 2022.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Year ended December 31, 2021 compared to year ended December 31, 2020” in our Annual Report on Form 10-K/A for the year ended December 31, 2021. 46 Liquidity and Capital Resources Overview We are a holding company.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Year ended December 31, 2022 compared to year ended December 31, 2021” in our Annual Report on Form 10-K for the year ended December 31, 2022. Liquidity and Capital Resources Overview We are a holding company.
Adjusted EBITDAR is defined as Adjusted EBITDA for our Casinos & Resorts segment plus rent expense associated with triple net operating leases. Adjusted EBITDAR is an additional metric 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 EBITDAR is defined as consolidated Adjusted EBITDA plus rent expense associated with triple net operating leases. Consolidated Adjusted EBITDAR is an additional metric 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.
The Company continuously monitors for events and circumstances that could negatively impact the key assumptions in determining the fair value of goodwill, including long-term revenue growth projections, profitability, discount rates, external factors, such as industry, market and macro-economic conditions, and internal factors, such as changes in the Company’s business strategy, which may re-allocate capital and resources to different or new opportunities but, in turn, may be to the detriment of an individual reporting unit.
The Company continuously monitors for events and circumstances that could negatively impact the key assumptions in determining the fair value of goodwill, including long-term revenue growth projections, profitability, discount rates, external factors, such as industry, market and macro-economic conditions, and internal factors, such as changes in the Company’s business strategy, which may re-allocate capital and resources to different or new opportunities but, in turn, may be to the detriment of an individual reporting unit. 53 The Company completed its annual assessment for goodwill impairment as of October 1, 2023, which resulted in no impairment charges to goodwill.
Results of Operations The following table presents, for the periods indicated, certain revenue and income items: Years Ended December 31, (In millions) 2022 2021 2020 Total revenue $ 2,255.7 $ 1,322.4 $ 372.8 (Loss) income from operations (293.0) 93.4 (18.4) Net loss (425.5) (114.7) (5.5) The following table presents, for the periods indicated, certain income and expense items expressed as a percentage of total revenue: Years Ended December 31, 2022 2021 2020 Total revenue 100.0 % 100.0 % 100.0 % Gaming and non-gaming expenses 44.7 % 40.5 % 37.2 % General and administrative 34.4 % 41.2 % 55.3 % Impairment charges 20.6 % 0.4 % 2.3 % Depreciation and amortization 13.3 % 10.9 % 10.2 % Total operating costs and expenses 113.0 % 92.9 % 104.9 % (Loss) income from operations (13.0) % 7.1 % (4.9) % Other income (expense): Interest expense, net (9.2) % (8.9) % (16.8) % Other non-operating expenses, net 2.1 % (7.1) % 1.7 % Total other expense, net (7.2) % (16.1) % (15.1) % Loss before provision for income taxes (20.1) % (9.0) % (20.1) % Benefit for income taxes (1.3) % (0.3) % (18.6) % Net loss (18.9) % (8.7) % (1.5) % __________________________________ Note: Amounts in table may not subtotal due to rounding. 41 Segment Information The Company has three reportable segments: Casinos & Resorts, North America Interactive and International Interactive.
The following table presents, for the periods indicated, certain revenue and income items: Years Ended December 31, (In millions) 2023 2022 2021 Total revenue $ 2,449.1 $ 2,255.7 $ 1,322.4 Income (loss) from operations 104.0 (293.0) 93.4 Net loss (187.5) (425.5) (114.7) 43 The following table presents, for the periods indicated, certain income and expense items expressed as a percentage of total revenue: Years Ended December 31, 2023 2022 2021 Total revenue 100.0 % 100.0 % 100.0 % Gaming and non-gaming expenses 45.1 % 44.7 % 40.5 % General and administrative 45.5 % 36.6 % 45.2 % Gain from sale-leaseback, net (15.3) % (2.3) % (4.0) % Impairment charges 6.1 % 20.6 % 0.4 % Depreciation and amortization 14.3 % 13.3 % 10.9 % Total operating costs and expenses 95.8 % 113.0 % 92.9 % Income (loss) from operations 4.2 % (13.0) % 7.1 % Other income (expense): Interest expense, net (11.3) % (9.2) % (8.9) % Other non-operating income (expense), net (0.5) % 2.1 % (7.1) % Total other expense, net (11.8) % (7.2) % (16.1) % Loss before income taxes (7.6) % (20.1) % (9.0) % Provision (benefit) for income taxes 0.1 % (1.3) % (0.3) % Net loss (7.7) % (18.9) % (8.7) % __________________________________ Note: Amounts in table may not subtotal due to rounding. 44 Segment Information The Company has three reportable segments: Casinos & Resorts, International Interactive and North America Interactive.
We have historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a more fulsome understanding of our core operating results and as a means to evaluate period-to-period performance.
We use consolidated Adjusted EBITDA and segment Adjusted EBITDAR when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a more fulsome understanding of our core operating results and as a means to evaluate period-to-period performance.
Adjusted EBITDA information is presented because management believes that it is a commonly used measure of performance in the gaming industry and that it is considered by many to be a key indicator of our operating results. Adjusted EBITDAR is used outside of our financial statements solely as a valuation metric.
Consolidated Adjusted EBITDA and segment Adjusted EBITDAR information is presented because management believes that they are commonly used measures of performance in the gaming industry and that they are considered by many to be key indicators of our operating results. Consolidated Adjusted EBITDAR is used outside of our financial statements solely as a valuation metric.
Macroeconomic and Other Factors Our business is subject to risks caused by global economic challenges, including those caused by the COVID-19 pandemic, the impact of the war in Ukraine, rising inflation, rising interest rates and supply-chain disruptions, that can cause economic uncertainty and volatility.
Macroeconomic and Other Factors Our business is subject to risks caused by global economic challenges, including those caused by public health crises such as the COVID-19 pandemic, the impact of global and regional conflicts, rising inflation, rising interest rates and supply-chain disruptions, that can cause economic uncertainty and volatility.
We expect that significant capital expenditures in 2023 will decrease as compared to 2022 as we focus on generating cash flows to invest in long-term growth opportunities for the entire Bally’s portfolio. 49 Bally’s Twin River - In connection with our partnership with IGT, we have committed to invest $100 million in Bally’s Twin River over the term of our master contract, ending in 2043, with Rhode Island to expand the property and add additional amenities along with other capital improvements.
We expect that capital expenditures, outside of our planned development of the Bally’s Chicago permanent facility, will be relatively flat in 2024 compared to 2023 as we continue our focus on generating cash flows to invest in long-term growth opportunities for the entire Bally’s portfolio. 51 Bally’s Twin River - In connection with our partnership with IGT, we have committed to invest $100 million in Bally’s Twin River over the term of our master contract, ending in 2043, with Rhode Island to expand the property and add additional amenities along with other capital improvements.
The transaction was structured as a tax-free capital contribution and a substantial portion of the proceeds will be applied to reduce the Company’s debt. These properties will be added to the Master Lease, increasing minimum annual payments by $48.5 million.
The transaction was structured as a tax-free capital contribution and a substantial portion of the proceeds were used to reduce the Company’s debt. These properties increased the minimum annual payments under the Master Lease by $48.5 million.
Also, we present Adjusted EBITDA because it is used by some investors and creditors as an indicator of the strength and performance of ongoing business operations, including our ability to service debt, and to fund capital expenditures, acquisitions and operations.
Also, we present consolidated Adjusted EBITDA and segment Adjusted EBITDAR because they are used by 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, acquisitions and operations.
Cash Flows Summary Years Ended December 31, (In thousands) 2022 2021 2020 Net cash provided by operating activities $ 270,971 $ 82,754 $ 19,502 Net cash used in investing activities (302,922) (2,296,904) (444,846) Net cash provided by financing activities 43,237 2,404,598 366,397 Effect of foreign currency on cash and cash equivalents (20,722) (42,163) — Change in cash and cash equivalents and restricted cash classified as assets held for sale (220) — — Net change in cash and cash equivalents and restricted cash (9,656) 148,285 (58,947) Cash and cash equivalents and restricted cash, beginning of period 274,840 126,555 185,502 Cash and cash equivalents and restricted cash, end of period $ 265,184 $ 274,840 $ 126,555 A description of changes in cash flows comparing the years ended December 31, 2021 and 2020 can be found in Part II.
Cash Flows Summary Years Ended December 31, (In thousands) 2023 2022 2021 Net cash provided by operating activities $ 188,614 $ 270,971 $ 82,754 Net cash used in investing activities (207,791) (302,922) (2,296,904) Net cash provided by financing activities 65,755 43,237 2,404,598 Effect of foreign currency on cash and cash equivalents 5,153 (20,722) (42,163) Change in cash and cash equivalents and restricted cash classified as assets held for sale (1,653) (220) — Net change in cash and cash equivalents and restricted cash 50,078 (9,656) 148,285 Cash and cash equivalents and restricted cash, beginning of period 265,184 274,840 126,555 Cash and cash equivalents and restricted cash, end of period $ 315,262 $ 265,184 $ 274,840 A description of changes in cash flows comparing the years ended December 31, 2022 and 2021 can be found in Part II.
Subject to receipt of regulatory approvals, it will house up to 750 slot machines and 30 table games. The casino will also provide, subject to receipt of separate licenses and certificates, retail sports betting, online sports betting and online gaming. We estimate the total cost of the project, including construction, licensing and iGaming/sports betting operations, to be approximately $120 million.
The casino will also provide, subject to receipt of separate licenses and certificates, retail sports betting, online sports betting and online gaming. We estimate the total cost of the project, including construction, licensing and iGaming/sports betting operations, to be approximately $120 million.
In 2022 we continued our spending on maintenance and planned projects at our casino properties, making significant progress on our Bally’s Twin River and Bally’s Atlantic City properties.
In 2023, we continued our spending on our planned projects and maintenance of our casino properties, making significant progress on our Bally’s Chicago, Bally’s Twin River and Bally’s Kansas City properties.
Credit Facility On October 1, 2021, we entered into the Credit Agreement providing for a senior secured term loan facility in an aggregate principal amount of $1.945 billion (the “Term Loan Facility”), which will mature in 2028, and a senior secured revolving credit facility in an aggregate principal amount of $620.0 million (the “Revolving Credit Facility”), which will mature in 2026. 48 The credit facilities allow us to increase the size of the Term Loan Facility or request one or more incremental term loan facilities or increase commitments under the Revolving Credit Facility or add one or more incremental revolving facilities in an aggregate amount not to exceed the greater of $650 million and 100% of the Company’s consolidated EBITDA for the most recent four-quarter period plus or minus certain amounts as specified in the Credit Agreement, including an unlimited amount subject to compliance with a consolidated total secured net leverage ratio.
The credit facilities allow us to increase the size of the Term Loan Facility or request one or more incremental term loan facilities or increase commitments under the Revolving Credit Facility or add one or more incremental revolving facilities in an aggregate amount not to exceed the greater of $650 million and 100% of the Company’s consolidated EBITDA for the most recent four-quarter period plus or minus certain amounts as specified in the Credit Agreement, including an unlimited amount subject to compliance with a consolidated total secured net leverage ratio.
We believe Adjusted EBITDAR is useful for equity valuation purposes because (i) its calculation isolates the effects of financing real estate, and (ii) using a multiple of Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize estimated liabilities arising from operating leases related to real estate. 40 Adjusted EBITDA and Adjusted EBITDAR should not be construed as an alternative to net income, the most directly comparable GAAP measure, as an indicator of our performance.
We believe Consolidated Adjusted EBITDAR is useful for equity valuation purposes because (i) its calculation isolates the effects of financing real estate, and (ii) using a multiple of Consolidated Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize estimated liabilities arising from operating leases related to real estate.
On January 3, 2023, we completed a transaction with GLP Capital, L.P., the operating partnership of GLPI, related to the land and real estate assets of Bally’s Tiverton and Hard Rock Biloxi for a total consideration of $635.0 million.
During 2023, the Company’s Bally’s Tiverton and Hard Rock Biloxi properties were added to the master lease on January 3, 2023, as a result of a transaction with GLP Capital, L.P., the operating partnership of GLPI, related to the land and real estate assets for a total consideration of $625.4 million.
Impairment Charges In 2022, we recorded total impairment charges of $464.0 million which included $390.7 million as a result of our annual goodwill and asset impairment analysis related to our North America Interactive segment and $73.3 million in the International Interactive segment related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition that is being de-emphasized for other newer brands in Asia and Rest of World.
Non-cash impairment charges for 2022 included $390.7 million related to our North America Interactive segment as part of our annual goodwill and asset impairment analysis and $73.3 million in the International Interactive segment related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition.
In periods of sustained inflation, it may be difficult to effectively control such increases to our costs and retain key personnel. Key Performance Indicators The key performance indicator used in managing our business is adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), a non-GAAP measure.
In periods of sustained inflation, it may be difficult to effectively control such increases to our costs and retain key personnel. Key Performance Indicators The key performance indicator used in managing our business is consolidated Adjusted EBITDA and segment Adjusted EBITDAR which are non-GAAP measures.
We discuss our significant accounting policies used in preparing the financial statements in Note 2 of our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
These estimates and judgements are based on past events and/or expectations of future outcomes. Actual results may differ from our estimates. We discuss our significant accounting policies used in preparing the financial statements in Note 2 of our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
This trademark is being de-emphasized for other newer brands in Asia and Rest of World, resulting in a decline in actual and projected revenues attributable to the trademark as compared to when the fair value was determined during the purchase price allocation of the Gamesys acquisition.
The trademark was determined to no longer have an indefinite life and is being de-emphasized for other newer brands in Asia, resulting in a decline in actual and projected revenues attributable to the trademark as compared to when the fair value was previously determined.
Bally’s Kansas City - We began construction on the planned redevelopment project of Bally’s Kansas City in November 2021. We believe the redevelopment of the property, which includes a 40,000 square foot land-based building, restaurant, bar and retail space, will improve the property and guest experience and drive growth and return on investment.
We believe the redevelopment of the property, which includes a 40,000 square foot land-based building, restaurant, bar and retail space, has improved the property and guest experience and will drive growth and our return on investment in the coming years. Spending on the project during 2023 was approximately $37 million.
Bally’s Atlantic City - Construction on our Bally’s Atlantic City property commenced in 2021. We are committed to invest approximately $100 million over five years to refurbish and upgrade Bally’s Atlantic City’s facilities and expand its amenities, including renovated hotel rooms and suites, an outdoor beer hall and lobby bar. Spending in 2023 is estimated at approximately $20 million.
We are committed to invest approximately $100 million over five years to refurbish and upgrade Bally’s Atlantic City’s facilities and expand its amenities, including renovated hotel rooms and suites, outdoor beer hall and lobby bar. Approximately $7.7 million of the committed investment remains as of December 31, 2023.
In connection with the entry into the host community agreement with the City of Chicago, the Company made a one-time up-front payment to the City of Chicago equal to $40.0 million, and the Developer will be required to make ongoing payments based on certain performance and time-based thresholds detailed in the host community agreement.
In connection with the entry into the host community agreement with the City of Chicago, the Company made a one-time up-front payment to the City of Chicago equal to $40.0 million. Beginning on the date of operations commencement, the Company will be required to pay annual fixed host community impact fees of $4.0 million.
The fair value of the trademarks was determined using a relief from royalty method, which utilized Level 3 inputs such as projected revenue, discount rates, long term growth rates and royalty rates.
The fair value of the trademark was determined using a relief from royalty method, which utilized Level 3 inputs such as projected revenue, discount rates, long term growth rates and royalty rates. To the extent revenues associated with the trademark decline in the near future, discount rates increase significantly, or selected royalty rates decline, we may recognize further impairments.
Capital Return Program We have a Board approved capital return program under which we may expend a total of up to $700 million for a share repurchases and payment of dividends.
Capital Return Program We have a Board approved capital return program under which we may expend a total of up to $700 million for a share repurchases and payment of dividends. During the year ended December 31, 2023 we repurchased 7,581,428 common shares for an aggregate purchase price of $99.1 million.
Rather, these intangible assets are tested annually for impairment, or more frequently if indicators of impairment exist, by comparing the fair value of the recorded assets to their carrying amount. If the carrying amounts of the indefinite-lived intangible assets exceed their fair value, an impairment loss is recognized.
Rather, these intangible assets are tested annually for impairment, or more frequently if indicators of impairment exist. If the carrying amounts of the indefinite-lived intangible assets exceed their fair value, an impairment loss is recognized. We assess the fair value of our gaming licenses and tradenames using the Greenfield Method and relief-from-royalty method, respectively, both under the income approach.
Refer to Note 15 “ Leases ” in Item 8 of this Annual Report on Form 10-K for further information. GLPI leases As of December 31, 2022, the Company’s Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities and Bally’s Black Hawk properties were leased under the terms of a master lease agreement (the “Master Lease”) with GLPI.
GLPI leases As of December 31, 2023, the Company’s Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities, Bally’s Black Hawk, Bally’s Tiverton and Hard Rock Biloxi properties were leased under the terms of a master lease agreement (the “Master Lease”) with GLPI.
As a percentage of revenue, net loss increased from 8.7% for the year ended December 31, 2021 to a net loss of 18.9% for the year ended December 31, 2022. Diluted loss per share for the year ended December 31, 2022 and 2021 was $7.32 and $2.31, respectively, and was impacted by the factors noted above.
Net loss and loss per share Net loss for the year ended December 31, 2023 was $187.5 million compared to $425.5 million in 2022. As a percentage of revenue, net loss decreased from 18.9% for the year ended December 31, 2022 to a net loss of 7.7% for the year ended December 31, 2023.
As a major component of this, we have constructed and opened a 14,000 square foot Korean-style spa, and are currently in the process of constructing a 40,000 square foot casino expansion, for a combined investment of approximately $60 million. The spa opened in January 2023, and the expanded casino is expected to open in the second quarter of 2023.
As a major component of this, we have constructed and opened a 14,000 square foot Korean-style spa, and a 40,000 square foot casino expansion, both of which opened in the first half of 2023. Approximately $64 million of the committed investment remains as of December 31, 2023.
Years Ended December 31, 2022 over 2021 2021 over 2020 (In thousands, except percentages) 2022 2021 2020 $ Change $ Change Revenue: Gaming Casinos & Resorts $ 907,431 $ 803,940 $ 298,070 $ 103,491 $ 505,870 North America Interactive 38,759 10,442 — 28,317 10,442 International Interactive 899,934 239,110 — 660,824 239,110 Total Gaming revenue 1,846,124 1,053,492 298,070 792,632 755,422 Non-gaming Casinos & Resorts 320,132 228,888 74,722 91,244 154,166 North America Interactive 42,941 27,910 — 15,031 27,910 International Interactive 46,508 12,153 — 34,355 12,153 Total Non-gaming revenue 409,581 268,951 74,722 140,630 194,229 Total revenue $ 2,255,705 $ 1,322,443 $ 372,792 $ 933,262 $ 949,651 Operating costs and expenses: Gaming Casinos & Resorts $ 313,569 $ 263,751 $ 95,901 $ 49,818 $ 167,850 North America Interactive 48,018 10,721 — 37,297 10,721 International Interactive 451,331 132,560 — 318,771 132,560 Total Gaming expenses 812,918 407,032 95,901 405,886 311,131 Non-gaming Casinos & Resorts 147,575 110,090 42,768 37,485 67,322 North America Interactive 14,538 9,299 — 5,239 9,299 International Interactive 34,205 8,658 — 25,547 8,658 Total Non-gaming expenses 196,318 128,047 42,768 68,271 85,279 General and administrative Casinos & Resorts 460,163 343,639 173,249 116,524 170,390 North America Interactive 113,913 46,908 — 67,005 46,908 International Interactive 149,168 43,015 — 106,153 43,015 Other 51,696 110,959 32,759 (59,263) 78,200 Total General and administrative $ 774,940 $ 544,521 $ 206,008 $ 230,419 $ 338,513 Margins: Gaming expenses as a percentage of Gaming revenue 44 % 39 % 32 % Non-gaming expenses as a percentage of Non-gaming revenue 48 % 48 % 57 % General and administrative as a percentage of Total revenue 34 % 41 % 55 % 42 Year ended December 31, 2022 compared to year ended December 31, 2021 Total revenue Our total revenue for the years ended December 31, 2022 and 2021 consisted of the following (in thousands): 2022 2021 $ Change % Change Gaming $ 1,846,124 $ 1,053,492 $ 792,632 75.2 % Hotel 153,750 95,356 58,394 61.2 % Food and beverage 115,322 92,906 22,416 24.1 % Retail, entertainment and other 140,509 80,689 59,820 74.1 % Total revenue $ 2,255,705 $ 1,322,443 $ 933,262 70.6 % We saw gaming, hotel, food and beverage, and retail, entertainment and other revenues grow, as we were able to operate with fewer restrictions across our properties compared to the prior year period as a result of developments in the COVID-19 pandemic and an increase in consumer confidence.
Years Ended December 31, 2023 over 2022 2022 over 2021 (In thousands, except percentages) 2023 2022 2021 $ Change $ Change Revenue: Gaming Casinos & Resorts $ 954,725 $ 907,431 $ 803,940 $ 47,294 $ 103,491 International Interactive 952,921 899,934 239,110 52,987 660,824 North America Interactive 84,395 38,759 10,442 45,636 28,317 Total Gaming revenue 1,992,041 1,846,124 1,053,492 145,917 792,632 Non-gaming Casinos & Resorts 408,566 320,132 228,888 88,434 91,244 International Interactive 20,289 46,508 12,153 (26,219) 34,355 North America Interactive 28,177 42,941 27,910 (14,764) 15,031 Total Non-gaming revenue 457,032 409,581 268,951 47,451 140,630 Total revenue $ 2,449,073 $ 2,255,705 $ 1,322,443 $ 193,368 $ 933,262 Operating costs and expenses: Gaming Casinos & Resorts $ 337,193 $ 313,569 $ 263,751 $ 23,624 $ 49,818 International Interactive 457,206 451,331 132,560 5,875 318,771 North America Interactive 94,538 48,018 10,721 46,520 37,297 Total Gaming expenses 888,937 812,918 407,032 76,019 405,886 Non-gaming Casinos & Resorts 194,612 147,575 110,090 47,037 37,485 International Interactive 11,985 34,205 8,658 (22,220) 25,547 North America Interactive 9,642 14,538 9,299 (4,896) 5,239 Total Non-gaming expenses 216,239 196,318 128,047 19,921 68,271 General and administrative Casinos & Resorts 658,021 510,929 397,064 147,092 113,865 International Interactive 191,358 149,168 43,015 42,190 106,153 North America Interactive 85,203 113,913 46,908 (28,710) 67,005 Other 179,394 51,696 110,959 127,698 (59,263) Total General and administrative $ 1,113,976 $ 825,706 $ 597,946 $ 288,270 $ 227,760 Margins: Gaming expenses as a percentage of Gaming revenue 45 % 44 % 39 % Non-gaming expenses as a percentage of Non-gaming revenue 47 % 48 % 48 % General and administrative as a percentage of Total revenue 45 % 37 % 45 % 45 Year ended December 31, 2023 compared to year ended December 31, 2022 Total revenue Our total revenue for the years ended December 31, 2023 and 2022 consisted of the following (in thousands): 2023 2022 $ Change % Change Gaming $ 1,992,041 $ 1,846,124 $ 145,917 7.9 % Hotel 200,650 153,750 46,900 30.5 % Food and beverage 143,521 115,322 28,199 24.5 % Retail, entertainment and other 112,861 140,509 (27,648) (19.7) % Total revenue $ 2,449,073 $ 2,255,705 $ 193,368 8.6 % Revenue for the year ended December 31, 2023 increased 8.6% compared to the year ended December 31, 2022.
A hypothetical 100 basis point decline in the discount rate or a 50 basis point decline in the terminal growth rate would not have resulted in an impairment charge.
The most sensitive inputs to the estimated fair value of the International Interactive reporting unit were the discount rate and terminal growth rate. A hypothetical 100 basis point increase in the discount rate or a 100 basis point decline in the terminal growth rate would not have resulted in any impairment charge.
The effective tax rate for the year ended December 31, 2022 was 6.4% compared to 3.7% in 2021.
Provision (benefit) for income taxes Provision for income taxes for the year ended December 31, 2023 was $1.8 million, compared to a benefit for income tax of $28.9 million in 2022. The effective tax rate for the year ended December 31, 2023 was (0.9)% compared to 6.4% in 2022.
Adjusted EBITDA and Adjusted EBITDAR by Segment Consolidated Adjusted EBITDA was $548.5 million for the year ended December 31, 2022, an increase of $218.6 million, or 66.3%, from $329.9 million in 2021. Adjusted EBITDA for the Casinos & Resorts segment for the year ended December 31, 2022 increased $27.9 million, or 8.8%, to $345.6 million from $317.7 million in 2021.
Adjusted EBITDAR for the Casinos & Resorts segment for the year ended December 31, 2023 was $429.0 million, an increase of $30.0 million, or 7.5%, for the year ended December 31, 2023 compared to $398.9 million in 2022.
(3) Other includes the following items: (i) professional fees and other costs incurred to establish the partnership with Sinclair and acquire Bally Interactive, (ii) storm related gains related to insurance recoveries received due to the effects of Hurricane Zeta on the Company’s Hard Rock Biloxi property, (iii) rebranding expenses in connection with Bally’s corporate name change, (iv) business interruption related recoveries, and (v) other individually de minimis expenses.
(10) Other includes the following items: (i) non-routine legal expenses and settlement charges for matters outside the normal course of business, (ii) storm related insurance and business interruption recoveries, (iii) rebranding expenses in connection with Bally’s corporate name change, (iv) professional fees and other costs incurred to establish the partnership with Sinclair and acquire Bally Interactive, and (v) other individually de minimis expenses. 48 Year ended December 31, 2022 compared to year ended December 31, 2021 This information can be found under Part II, Item 7.
Spending on the project is estimated to be approximately $50 million, with a target completion date in the summer of 2023. Centre County, PA - On December 31, 2020, we signed a framework agreement with entities affiliated with an established developer to design, develop, construct and manage a Category 4 licensed casino in Centre County, Pennsylvania.
Centre County, PA - On December 31, 2020, we signed a framework agreement with entities affiliated with an established developer to design, develop, construct and manage a Category 4 licensed casino in Centre County, Pennsylvania. Subject to receipt of regulatory approvals, which remain pending, it will house up to 750 slot machines and 30 table games.
Other Contractual Obligations Sponsorship Commitments - The Company has entered into several sponsorship agreements with various professional sports leagues and teams, allowing the Company use of official league marks for branding and promotions, among other rights. As of December 31, 2022, obligations related to these agreements were $83.3 million, with contracts extending through June 2036.
In addition, land acquisition costs and financing costs, among other types of costs, do not count towards satisfying such minimum expenditure. 52 Other Contractual Obligations Sponsorship Commitments - The Company has entered into several sponsorship agreements with various professional sports leagues and teams, allowing the Company use of official league marks for branding and promotions, among other rights.
The Company completed its annual assessment for goodwill impairment as of October 1, 2022, which resulted in impairment charges to goodwill. Reporting units with goodwill which were identified as having less than a substantial cushion were subject to a sensitivity analysis to determine the potential impairment losses.
Reporting units with goodwill which were identified as having less than a substantial cushion were subject to a sensitivity analysis to determine the potential impairment losses. The carrying value of the International Interactive reporting unit was $2.4 billion as of October 1, 2023 and the estimated fair value exceeded this amount by 7%.
Bally’s Chicago - On June 9, 2022, a wholly-owned indirect subsidiary of the Company, Bally’s Chicago Operating Company, LLC (the “Developer”), signed a host community agreement with the City of Chicago to develop a $1.7 billion destination casino resort, to be named Bally’s Chicago, in downtown Chicago, Illinois.
Bally’s Chicago - On June 9, 2022, a wholly-owned indirect subsidiary of the Company, Bally’s Chicago Operating Company, LLC (the “Developer”), signed a host community agreement with the City of Chicago to develop a destination casino resort, to be named Bally’s Chicago, in downtown Chicago, Illinois that will include approximately 3,400 slot machines, 170 table games, 10 food and beverage venues, 500 hotel rooms, a 65,000 square foot entertainment and event center, 20,000 square feet of exhibition space, 3,300 parking spaces and an outdoor green space.
The selected royalty rate represents the most sensitive input in our estimates and a hypothetical increase of 50 bps in the royalty rates would result in additional impairment of approximately $10.6 million on the assets that do not significantly exceed their carrying values.
The selected royalty rate represents the most sensitive input in our estimates and a hypothetical decrease of 50 basis points in the royalty rates would result in additional impairment of approximately $0.4 million. Additionally, the Company recognized an impairment loss of $76.7 million on three gaming licenses within the Casinos & Resorts segment.
Critical Accounting Estimates The preparation of our consolidated financial statements in accordance with US GAAP requires us to make estimates and apply judgments that affect reported amounts. These estimates and judgements are based on past events and/or expectations of future outcomes. Actual results may differ from our estimates.
The cumulative minimum obligation committed in these agreements is approximately $55.4 million, of which $14.1 million is expected to be paid in 2024, extending through 2028. Critical Accounting Estimates The preparation of our consolidated financial statements in accordance with US GAAP requires us to make estimates and apply judgments that affect reported amounts.
The project also provides the Developer with the exclusive right to operate a temporary casino for up to three years while the permanent casino resort is constructed. The temporary casino is expected to open in the second half of 2023, subject to regulatory approval and other customary conditions.
The project also provides the Company with the exclusive right to operate a temporary casino for up to three years while the permanent casino resort is constructed. The temporary casino commenced operations on September 9, 2023 at the Medinah Temple and includes approximately 800 gaming positions and 3 food and beverage venues.
(2) Includes acquisition costs, integration costs related to our Interactive business, financing related expenses, Bally’s Chicago costs, and restructuring costs. (3) Losses related to a North America Interactive business that Bally’s is marketing as held-for-sale as of December 31, 2022.
(5) Costs related to the decommissioning of the Company’s sports betting platform in favor of outsourcing the platform solution to third parties. (6) Losses related to a North America Interactive business that Bally’s is marketing as held-for-sale as of December 31, 2023.
A hypothetical 10% decline in forecasted revenues for the reporting unit would have resulted in an additional goodwill impairment charge of $10 million. Material changes in these estimates could occur and result in additional impairment in future periods.
Material changes in these estimates could occur and result in additional impairment in future periods.
Depreciation and amortization Depreciation and amortization for the year ended December 31, 2022 was $300.6 million, compared to $144.8 million in 2021 driven by the inclusion of incremental expense from our acquisition of Tropicana Las Vegas and our 2021 Acquisitions, which contributed, in the aggregate, $159.4 million year-over-year.
Depreciation and amortization Depreciation and amortization for the year ended December 31, 2023 was $350.4 million, compared to $300.6 million in 2022. This increase was largely driven by our Tropicana Las Vegas property where we recorded accelerated depreciation on assets as a result of our recently announced impending closure in April 2024.
Operating leases The Company is committed under various operating lease agreements for real estate and property used in operations. Minimum rent payable under operating leases was $1.71 billion as of December 31, 2022, of which $82.7 million is due within the next twelve months.
Minimum rent payable under operating leases was $2.31 billion as of December 31, 2023, of which $138.1 million is due within the next twelve months. Refer to Note 17 “ Leases ” in Item 8 of this Annual Report on Form 10-K for further information.
Investing Activities The decrease in cash used in investing activities was primarily driven by a decrease in cash paid for acquisitions year-over-year, coupled with a $200.0 million advance deposit received in connection with our transaction with GLPI for our Bally’s Tiverton and Hard Rock Biloxi properties, which closed in January 2023.
Investing Activities Net cash used in investing activities for 2023 was driven by capital expenditures and $135.3 million of gaming license fees in connection with the opening of our Bally’s Chicago temporary casino and cash paid for acquisitions in the year, offset by proceeds from our Tiverton and Hard Rock Biloxi sale-leaseback transactions.
General and administrative General and administrative expenses for the year ended December 31, 2022 increased $230.4 million from $544.5 million, in 2021, primarily due to inclusion of expenses from our acquisition of Tropicana Las Vegas and our 2021 Acquisitions which contributed, in the aggregate, $201.7 million.
The inclusion of expenses from our recently opened Bally’s Chicago temporary casino property and the incremental gaming expenses from our Recent Acquisitions also contributed to the increase in both gaming and non-gaming expenses compared to prior year. General and administrative General and administrative expenses for the year ended December 31, 2023 increased $288.3 million from $825.7 million, in 2022.
The Revolving Credit Facility contains a financial covenant regarding a maximum first lien net leverage ratio that applies when borrowings under the Revolving Credit Facility exceed 30% of the total revolving commitment. Refer to Note 14 “ Long-Term Debt ” in Item 8 of this Annual Report on Form 10-K for further information.
Refer to Note 16 “ Long-Term Debt ” in Item 8 of this Annual Report on Form 10-K for further information. Operating leases The Company is committed under various operating lease agreements for real estate and property used in operations.
The growth in 2022 was primarily driven by increases in customer volumes at certain casino properties, partially offset by local regulatory changes, such as smoking bans, adversely impacting the performance of certain other properties. Adjusted EBITDA for the North America Interactive segment for the year ended December 31, 2022 was $(65.7) million compared to $(12.4) million in 2021.
Adjusted EBITDAR loss for the North America Interactive segment for the year ended December 31, 2023 was $55.7 million compared to $65.7 million in 2022.
This decrease was driven by a loss on extinguishment of debt in the prior year of $103.0 million in connection with the termination of our obligations under our prior revolving credit facility and prior term loan facility and the redemption of our 6.75% senior notes due 2027 in connection with our credit facility entered into on October 1, 2021, coupled with a foreign exchange loss of $33.5 million in the prior year, compared to a gain of $0.5 million in 2022.
This increase was driven by increased interest expense on our debt, coupled with an increase in the value of our commercial rights liabilities, and a foreign exchange loss in the current year, compared to a gain in the prior year.
We use Adjusted EBITDA 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.
Segment Adjusted EBITDAR is Adjusted EBITDA (as defined above) for the Company’s reportable segments, plus rent expense associated with triple net operating leases with GLPI 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. 42 We use consolidated Adjusted EBITDA and segment Adjusted EBITDAR to analyze the performance of our business and they are used as determining factors for performance-based compensation for members of our management team.
Income (loss) from operations Loss from operations was $293.0 million for the year ended December 31, 2022 compared to income from operations of $93.4 million in 2021. This change year-over-year was primarily driven by the impairment charges noted above, partially offset by an overall benefit of $14.7 million from our acquisition of Tropicana Las Vegas and our 2021 Acquisitions.
These accelerated depreciation charges will extend through the first quarter of 2024. Income (loss) from operations Income from operations was $104.0 million for the year ended December 31, 2023 compared to loss from operations of $293.0 million in 2022.
Removed
We completed our acquisition of Tropicana Las Vegas, providing us with a presence on the Las Vegas Strip. We signed an agreement to develop Bally’s Chicago, a flagship destination casino resort in downtown Chicago, Illinois.
Added
In our Casinos & Resorts segment, we: • announced a binding deal with the Oakland Athletics of Major League Baseball to site their new ballpark on a portion of our Bally’s Las Vegas property; • opened our temporary casino at the Medinah Temple in Chicago, Illinois and are on track to break ground to develop a permanent flagship destination casino resort in downtown Chicago, Illinois; • opened our property expansion at Bally’s Kansas City and Bally’s Twin River, which provides for enhanced amenities to improve the customer experience; and • we acquired Bally’s Golf Links at Ferry Point in the Bronx, New York.
Removed
We made significant progress on our capital improvement and expansion projects at our Bally’s Atlantic City, Bally’s Lincoln, and Bally’s Kansas City properties focusing on enhancing amenities to improve the customer experience. We launched Bally Casino, an iCasino app, and Bally Bet Sportsbook & Casino, our first combined casino and sportsbook app.
Added
In our International Interactive and North America Interactive segments, we: • rolled out our new Bally Bet sportsbook app with our new partners, Kambi and White Hat Gaming in seven US states; • launched iGaming app in Pennsylvania; • launched Bally Casino, an iGaming app, and Bally Bet Sportsbook & Casino, our first combined casino and sportsbook app; and • anticipate launching a new iGaming app in Rhode Island following the legalization of iGaming in Rhode Island.
Removed
Beginning in the third quarter ended September 30, 2022, we revised our calculation of Adjusted EBITDA to exclude adjustments for launch costs and preopening expenses. The tables below within “Adjusted EBITDA and Adjusted EBITDAR by Segment” have been revised to reflect this new presentation for applicable periods.
Added
Consolidated Adjusted EBITDA and segment Adjusted EBITDAR should not be construed as alternatives to net income, the most directly comparable GAAP measure, as indicators of our performance.
Removed
Incremental revenues from the recent acquisition of Tropicana Las Vegas and the acquisitions completed in 2021, including Gamesys, Bally’s Evansville, Bally’s Lake Tahoe, Bally’s Quad Cities and our North America Interactive acquisitions (collectively the “2021 Acquisitions”), contributed, in the aggregate, $868.7 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+2 added−0 removed2 unchanged
Biggest changeMovements in currency exchange rates could impact the translation of assets and liabilities of these foreign operations which are translated at the exchange rate in effect on the balance sheet date. We have not historically used operational hedges or forward currency exchange rate contracts to manage the impact of currency exchange rate fluctuations on earnings and cash flows. 53
Biggest changeForeign currency transaction losses for the year ended December 31, 2023 were $11.0 million. Foreign currency transaction gains for the year ended December 31, 2022 were $0.5 million. Movements in currency exchange rates could impact the translation of assets and liabilities of these foreign operations which are translated at the exchange rate in effect on the balance sheet date.
Bally’s does not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2022, 2021 or 2020. Interest Rate Risk As of December 31, 2022, interest on borrowings under our credit facility was subject to fluctuation based on changes in short-term interest rates.
Bally’s does not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2023, 2022 or 2021. Interest Rate Risk As of December 31, 2023, interest on borrowings under our credit facility was subject to fluctuation based on changes in short-term interest rates.
Based upon a sensitivity analysis of our debt levels on December 31, 2022, a hypothetical increase of 1% in the effective interest rate would cause an increase in interest expense of approximately $20.6 million over the next twelve months while a decrease of 1% in the effective interest rate, not to exceed the interest rate floor, would cause a decrease in interest expense of approximately $20.6 million over the same period.
Based upon a sensitivity analysis of our debt levels on December 31, 2023, a hypothetical increase of 1% in the effective interest rate would cause an increase in interest expense of approximately $22.4 million over the next twelve months while a decrease of 1% in the effective interest rate, not to exceed the interest rate floor, would cause a decrease in interest expense of approximately $22.4 million over the same period.
On December 31, 2022, we had $2.06 billion of variable rate debt outstanding under our Term Loan and Revolving Credit Facilities and $1.50 billion of unsecured senior notes.
On December 31, 2023, we had $2.24 billion of variable rate debt outstanding under our Term Loan and Revolving Credit Facilities and $1.49 billion of unsecured senior notes.
We evaluate our exposure to market risk by monitoring interest rates in the marketplace and we have, on occasion, utilized derivative financial instruments to help manage this risk. We have not historically utilized derivative financial instruments for trading purposes.
We evaluate our exposure to market risk by monitoring interest rates in the marketplace and we have utilized derivative financial instruments to help manage this risk.
We do not believe that fluctuations in interest rates had a material effect on our business, financial condition or results of operations during the years ended December 31, 2022, 2021 or 2020. Foreign Currency Risk We are exposed to fluctuations in currency exchange rates as a result of our net investments and operations in countries other than the US.
We have not historically utilized derivative financial instruments for trading purposes. We do not believe that fluctuations in interest rates had a material effect on our business, financial condition or results of operations during the years ended December 31, 2023, 2022 or 2021.
A vast majority of our revenues are from the UK market and are conducted in GBP and are therefore susceptible to any movements in exchange rates between the GBP and USD. Foreign currency transaction gains for the year ended December 31, 2022 were $0.5 million. Foreign currency transaction losses for the year ended December 31, 2021 were $33.5 million.
Foreign Currency Risk We are exposed to fluctuations in currency exchange rates as a result of our net investments and operations in countries other than the US. A vast majority of our revenues are from the UK market and are conducted in GBP and are therefore susceptible to any movements in exchange rates between the GBP and USD.
Added
As part of the Company’s risk management and hedging program, the Company utilizes interest rate swaps and collars used to hedge and offset, respectively, the variable interest rates on the credit facility as described in Note 11, “ Derivative Instruments ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K.
Added
We have utilized operational hedges or forward currency exchange rate contracts, as well as derivative financial instruments, such as cross currency swaps, to manage the impact of currency exchange rate fluctuations on earnings and cash flows. 55

Other BALY 10-K year-over-year comparisons