Bally's Corp shares took a significant hit, dropping over 25% during trading on Monday, following investor reactions to concerning debt details disclosed in the company’s second-quarter 10-Q filing to the Securities and Exchange Commission on August 14. In the filing, Bally's indicated that its current forecasts predict an inability to meet necessary liquidity maintenance requirements as well as compliance with the consolidated net leverage ratio covenant in its revolving credit facility within the coming year.
The filing stated, "As described below, 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." Among the financing alternatives discussed are "asset monetization, an equity sale, and debt financings." Bally’s also mentioned entering into a non-binding term sheet for a loan to support its ambitious $4 billion Bronx project, although it cautioned about the uncertainty of these plans.
As of the end of the quarter, Bally's recorded cash and equivalents of $390.1 million against long-term net debt of $4.46 billion. The company's shares closed at $10.31, down 26% on that day, reflecting a 38% drop year-to-date.
Bally's has three significant U.S. projects underway: a $1.7 billion permanent casino in Chicago, a $1.19 billion Las Vegas Strip project, and the Bronx project, for which Bally's secured one of three coveted New York City licenses last December.
Of these, the Las Vegas project may present the easiest option for divestiture, especially since construction is actively progressing in Chicago and New York represents a larger opportunity. Following the demolition of the former Tropicana in October 2024, progress on the Strip has been sluggish, with Bally’s providing just one rendering of its mixed-use proposal and signaling a focus on creating a retail-entertainment district rather than a casino-resort.
The slow development has caused frustrations, particularly as the Oakland Athletics, an MLB team, are reportedly considering spending up to $100 million on infrastructure at the site while Bally's has lagged. The Las Vegas Convention and Visitors Authority (LVCVA) pressed Bally's for a financing plan due by August, though neither party commented on this ultimatum to iGB last week.
Citizens analyst Jordan Bender expressed skepticism over Bally's capacity to complete its projects without divesting assets or seeking a development partner, identifying Las Vegas as the most likely candidate for such actions. Notably, Bally’s CEO, Robeson Reeves, overlooked references to the Las Vegas casino during the Q2 release, instead highlighting ongoing negotiations with potential partners for retail and entertainment developments.
Challenges also loom for the Chicago and New York projects. Earlier in August, Bally's halted construction on non-gaming aspects of its Chicago casino, prompted by the city's legalization of video gaming terminals—this could result in an annual revenue loss of approximately $70 million. This marked the third pause in construction for the Chicago project, which is expected to open in early 2027 if timelines remain on track.
In New York, Bally's has already earmarked $615 million for the Bronx project, which includes a $500 million fee for the casino license and $115 million paid to the Trump Organization upon successfully obtaining the variance. Despite this hefty investment, Bally's Bronx project, pegged at $4 billion, is more than double the cost of the company's Chicago endeavor, which itself faces delays. The Bronx project timeline suggests construction could commence eight to nine months post-licensing—Bally’s secured that license in December, indicating work should begin soon to meet a projected 2030 completion.
Competing with Resorts World New York City and Hard Rock's Metropolitan Park, Bally’s aims to match their timeline, all while seeking additional capital for development. Reeves reported that the company is seeking new investments, having signed a non-binding term sheet in July for a pre-construction loan and a letter of intent for equity financing in August.
Despite the turmoil surrounding these projects, Bally's Q2 results indicated a 20% year-over-year revenue increase to $792.2 million, largely driven by acquisitions. Casino revenue grew by 2% year-over-year to $401 million, with adjusted EBITDAR rising about 3.5% to $109.6 million. Bally's also reported a 22% increase in B2C revenue from its digital segment and announced a $326 million acquisition of the British sports betting and igaming company evoke during the quarter.
Bally’s continues to strive towards becoming a global powerhouse in both retail and online gaming, as indicated by its CEO's remarks about ongoing growth opportunities ahead.
