Bally's Corp saw its shares drop over 25% during trading on Monday as investors reacted to concerning debt disclosures in the company’s second-quarter 10-Q filing with the Securities and Exchange Commission, submitted on August 14. In this filing, Bally's revealed it "does not project that it would satisfy the liquidity maintenance requirement" or the "consolidated net leverage ratio covenant" within its revolving credit facility for the upcoming year.
The disclosure stated, "While the company is actively engaged in discussions on several financing alternatives, the conditions and events raise substantial doubt about the company’s ability to continue as a going concern." Various potential financing options were reported, including "asset monetisation, an equity sale and debt financings." The operator disclosed that it had entered a non-binding term sheet in July for a loan to advance its $4 billion project in the Bronx; however, it cautioned that "there can be no assurance that the plans will be successfully implemented."
As of the end of the quarter, Bally's had $390.1 million in cash and equivalents against a long-term net debt of $4.46 billion. Shares finished at $10.31, marking a 26% decline for the day and bringing the year-to-date loss to 38%.
Looking at future projects, Bally's is managing three significant U.S. developments: a $1.7 billion permanent casino in Chicago, a $1.19 billion project on the Las Vegas Strip, and the Bronx casino, which was awarded one of three highly sought-after New York City licenses last December. Of these, selling the Las Vegas property could be the simplest exit as Chicago's construction is already underway and New York presents a larger opportunity. Since demolishing the Tropicana in October 2024, progress on the Las Vegas site has been minimal, with only one official rendering released. The company has suggested it may be more focused on establishing a retail-entertainment district rather than a casino-resort.
Concerns are rising as the MLB's Athletics are reportedly considering plans to spend up to $100 million on their own infrastructure at the site while Bally's continues to lag. The Las Vegas Convention and Visitors Authority has urged Bally's to present a financing plan, with no public comments made from either party regarding the deadline.
Citizens analyst Jordan Bender noted that Bally's may struggle to complete all its projects at current debt levels without asset sales or bringing in development partners, pointing to Las Vegas as the most probable candidate for such an action. In Bally's Q2 release, CEO Robeson Reeves mentioned the company is engaged in "advanced negotiations with potential partners for exciting retail and entertainment offerings," omitting any reference to a Las Vegas casino.
The situation in Chicago has also grown complicated. Earlier this month, Bally's paused construction on the non-gaming portions of its Chicago casino as a response to new city regulations allowing video gaming terminals. The expansion of these terminals could cost the company approximately $70 million annually in revenue and lead to job losses. This marks the third substantial halt on the project, which had previously secured an extension to its temporary license. Absent this extension, the temporary casino would have faced closure on September 9 ahead of an anticipated opening in early 2027, leaving a gap with no income generation.
Meanwhile, Bally's has earmarked $615 million for its Bronx project even before ground has been broken. This figure includes a $500 million fee for the New York license and $115 million to the Trump Organization as part of the acquisition deal made in 2023. The planned investment for Bronx, considerably exceeding that of Chicago, is set for a single-phase build-out aimed for completion in 2030. Construction must commence this month or next to adhere to the proposed schedule following the license approval in December.
Time is crucial in this competitive market, as Resorts World New York City is already operational, and Hard Rock Metropolitan Park is vying for a similarly ambitious 2030 opening with stronger financial stability.
Reeves indicated that raising capital for the Bronx project is a priority, highlighting ongoing efforts to attract both project debt and equity financing.
In terms of financial performance, Bally's reported robust Q2 results, albeit released late for the second consecutive quarter. Group revenue soared 20% year-on-year to $792.2 million, largely driven by acquisitions. Casino revenue increased by 2% to $401 million, while adjusted EBITDAR grew by around 3.5% to $109.6 million. The company also saw a 22% uplift in B2C revenue from Bally's Intralot, reaching $243.5 million, with digital revenue in North America climbing by 17% to $66.1 million. Bally's announced a $326 million acquisition of British sports betting and iGaming operator Evoke during the quarter, underscoring its drive towards becoming a major player in retail and online gaming.
