Bally's Corp saw its shares drop over 25% during trading on Monday, following investor concerns over disclosures regarding its debt in the second-quarter 10-Q filing with the Securities and Exchange Commission, submitted on August 14. The company revealed that, based on current forecasts, it does not expect to meet the liquidity maintenance requirement or the consolidated net leverage ratio covenant stipulated in its revolving credit facility within the next year.
The filing further expressed that discussions regarding various financing alternatives are ongoing, but current conditions raise substantial doubts about Bally's ongoing viability as a business. Potential financing solutions include asset monetization, equity sales, and debt financing. In July, Bally's entered into a non-binding term sheet for a loan aimed at its $4 billion Bronx project but cautioned that successful implementation of these plans cannot be guaranteed.
By the end of the last quarter, Bally's had $390.1 million in cash and equivalents set against long-term net debt of $4.46 billion. Shares were down to $10.31 on Monday, marking a 26% decrease for the day and a year-to-date decline of 38%.
Bally's has three significant projects in the pipeline: the $1.7 billion permanent casino in Chicago, a $1.19 billion project on the Las Vegas Strip, and the Bronx casino, which received a coveted New York City license in December. Among these, the Las Vegas project might present the most straightforward opportunity for an exit; this is particularly true given the progress struggles faced since the demolition of the former Tropicana in October 2024. The company has only released a single official rendering of the site and has indicated a shift from a casino-resort focus to a retail-entertainment district.
This shift has caused friction in Las Vegas, where the MLB's Athletics are reportedly developing plans to invest up to $100 million on site infrastructure as Bally's encounters delays. The Las Vegas Convention and Visitors Authority had urged Bally's to submit a financing plan by August, but neither the authority nor the company provided comments regarding the ultimatum last week.
Citizens analyst Jordan Bender remarked that Bally's might not finish all of its projects without selling assets or securing development partners, identifying Las Vegas as the most likely site to see a sale or partnership. Significantly, Bally's CEO Robeson Reeves did not mention a Las Vegas casino in the recent quarterly earnings release, instead noting the company is in “advanced negotiations with potential partners for exciting retail and entertainment offerings.”
Chicago's project similarly faces challenges. Earlier in August, Bally's stopped construction on the non-gaming components of its Chicago casino due to the city’s legalization of video gaming terminals, which could potentially take away $70 million a year in revenue and result in significant job losses, according to the company. This construction halt marked the third interruption for the project. Earlier in the year, Bally's secured an extension on its temporary Chicago license, delaying a potential closure of the temporary casino that was at risk of happening on September 9, as the permanent site won’t open before early 2027.
Bally's also allocated $615 million in 2023 for its Bronx project before ground has even broken, with $500 million of that amount devoted to the casino license fee and $115 million payable to the Trump Organization. The Bronx venture, with its $4 billion price tag, exceeds the Chicago project's costs and is planned as a single-phase build to be wrapped up by 2030. While specific timelines remain largely undisclosed, construction was expected to commence approximately eight to nine months after receiving its license, which was granted in December. This timeline implies that work should ideally begin soon to meet the 2030 completion goal, considering that competing casino Resorts World New York City is already operational, and Hard Rock Metropolitan Park pursues its own aggressive timeline.
Bally's Reeves stated that they are "actively raising additional capital for the further development and construction" of the Bronx project and noted significant interest from potential partners for financing.
Despite these challenges, Bally's reported a 20% increase in total revenue for the second quarter, reaching $792.2 million, thanks in large part to acquisitions. The company’s casino revenue increased 2% year-over-year to $401 million, and segment adjusted EBITDAR rose by 3.5% to $109.6 million, aided by successful operations in Baton Rouge and Marquette. On the digital side, revenue from Bally’s Intralot rose 22% year-over-year to $243.5 million, with North American digital revenue up 17% to $66.1 million. During the quarter, Bally's announced a $326 million acquisition of British sports betting and iGaming company Evoke.
In light of these developments, Bally's continues to work towards becoming a leading integrated provider of retail and online gaming experiences, focusing on executed growth opportunities.
