Bally’s Corporation has reported growth for its UK and North American online operations in the third quarter of 2024, but a year-over-year decline in overall revenue and International Interactive revenue.
UK online revenues in Q3 rose by almost 12% compared to the same period the previous year. Still, overall International Interactive revenue fell by over 5% YoY due to non-UK market performances.
Publishing its Q3 results, Bally’s declared company-wide revenue of $630m, down slightly YoY (Q3 2023: $632.5m) as gains seen in the UK and North America online markets were offset by declines in Casino & Resorts and International Interactive segments.
Per vertical, gaming revenue in Q3 rose to $523.9m (2023: $508.9m) while non-gaming revenue decreased to $106.1m (2023: $123.6m).
During the quarter, Bally’s also entered into a definitive merger agreement with Standard General LP, which will acquire the company’s outstanding shares for $18.25 per Bally’s share.
UK online revenue increase
International Interactive revenue dropped by 5.3% YoY to $230.9m (2023: $243.9m), as CEO Robeson Reeves mentioned that the 11.8% YoY growth in the UK was offset “in part by lingering weakness in other non-UK markets, with a particular emphasis on the ongoing logistical challenges impacting business in Asia”.
Reeves noted that UK growth was “driven by all-time high active customer levels and robust Average Revenue per User metrics along with growing traction for our online sports betting offerings which include a newly launched Bally’s-branded product that joins our initial Jackpotjoy offering”.
Recently, Bally’s entered into an agreement to sell its interactive business in Asia and certain other international markets to a company formed by members of the carved-out business management. The identities of the members of the buying company were not revealed.
Adjusted EBITDAR for the segment rose to $90m, up 5.3% in comparison to the same period the previous year (2023: $85.5m).
Reeves said: “Flow-through in our International Interactive segment remains very healthy as a result of diligent UK marketing spend, management of compensation expenses along with the continued realisation of synergies from our technology platform consolidation.”
Land-based wise, Bally’s highlighted during its Q3 earnings call that it acquired Aspers Casino in Newcastle, noting that while it is a “relatively modest” acquisition in comparison to the rest of its business, it sees it as part of its strategy to grow its UK presence and leverage its online player database.
Chicago and Las Vegas updates
The operator’s Casino and Resorts revenue was down 1.6% YoY to $353.4m (2023: $359m), with Reeves stating that the quarter reflected the general “stable domestic regional gaming environment” but a “flow-through decline” in comparison to the previous year occurred.
“Results at our Chicago Temporary Casino have moderated to a somewhat consistent monthly level and we are focused on running our Chicago operations with database growth in mind,” said Reeves.
“In Rhode Island, local bridge construction continues to disrupt traffic during peak periods which again impacted visitation and revenues at our flagship Lincoln property. In Atlantic City, previously noted turnover in our relationship marketing team had an adverse impact on results in the quarter which included the second half of the market’s all-important summer season.”
Reeves noted that “primarily reflecting these impacts, and lower-than-expected hold in Kansas City,” adjusted EBITDAR declined by 15% YoY to $100.4m (2023: $118.2m).
During the quarter, Bally’s secured a $940m construction and financing arrangement with Gaming & Leisure Properties (GLPI), allowing the company to begin construction of a permanent casino in downtown Chicago.
In addition, the company completed the controlled demolition of the Tropicana Las Vegas, moving a step closer to the start of construction of a baseball ballpark and entertainment resort in partnership with GLPI and the MLB’s Oakland Athletics, who will be moving into the new stadium.
As for New York, Bally’s mentioned during its earnings call that its current understanding is that the state will be accepting bids in late June 2025 and licences will be awarded in early 2026. The company proposes to develop an integrated resort adjacent to the Bally’s Links at Ferry Point in the Bronx.
“Upon completion, the Chicago and Las Vegas development projects feature unique positioning in their respective markets and represent two attractive additions to our portfolio that we expect will drive positive shareholder returns,” said Reeves.
President George Papanier added: “In Chicago, demolition of the former Tribune buildings continues while we work closely with our partners at GLPI and with the City to gain final approval for our re-imagined permanent Bally’s Chicago Casino master plan ahead of the start of construction next year.
“Our existing Chicago Temporary Casino is allowing us to build relationships with players in Chicago and establish our long-term presence in a market with favourable adult population and demographics.
“In Las Vegas, we are moving forward with the planning for a Bally’s casino on the Las Vegas Strip adjacent to the A’s stadium which will begin to rise next year following the recent implosion of the Tropicana hotel towers. Collectively, these growth opportunities leave us very optimistic regarding the long-term prospects of our C&R business.”
North American online growth
Bally’s North America Interactive revenue increased by 54.5% YoY to $45.7m (2023: $29.6m), with Reeves noting that the company is “very pleased” with igaming operations in Rhode Island and Pennsylvania, but this was offset by operational performance in New Jersey.
Adjusted EBITDAR for the segment improved compared to the previous year, but it was still minus $11m (2023: minus $17.6m).
“Ultimately, our igaming product offering and Bally Bet OSB continue to garner positive player feedback, and we remain excited by the long-term promise embedded in this segment,” the CEO added.
Bally’s net income for the quarter came in at a loss of $247.9m (2023: $61.8m loss). The company’s overall adjusted EBITDA for Q3 declined to $137.7m in comparison to the same period the previous year (2023: $141.6m) with a margin of 21.9% (2023: 22.4%). Overall adjusted EBITDAR for the quarter stood at $166.3m.
CFO Marcus Glover concluded: “Our broad asset portfolio again delivered healthy financial performance in the third quarter of 2024 despite some lingering headwinds.
“The entire team is working diligently to optimise our cost structure across the board and enhance the efficiency of our operations, particularly in the C&R segment and within International Interactive.
“While this work is in its early stages and will continue for the foreseeable future, we believe we will see tangible results in the near term as we improve profitability and enhance our operating performance.”
