Financial Data and Key Metrics Changes - Bally's Corporation reported revenues of $598.7 million, an increase of 9.2% year-over-year, and adjusted EBITDA of $126.4 million, up 10.2% year-over-year [21][27] - Adjusted EBITDA margin improved to 21.1% from 20.9% in Q1 2022, while adjusted EBITDAR margin was 26.3% [21][27] - The company anticipates EBITDAR guidance for 2023 to be between $665 million and $700 million, reflecting confidence in business strength [27][28] Business Line Data and Key Metrics Changes - The Casinos & Resorts segment generated record revenues of $329 million, up 9.4% year-over-year, with EBITDA of $105 million [15][21] - International Interactive segment achieved $80.2 million in EBITDA with a margin of 32.6%, and the UK business grew 9.6% year-over-year [23][17] - North America Interactive reported a negative EBITDAR of $10.5 million, but New Jersey is contributing over $1 million in profit monthly [24][19] Market Data and Key Metrics Changes - The UK market showed strong growth, with Bally's International Interactive segment up 9.6% year-over-year on a constant currency basis [23][17] - In Asia, positive trends were noted despite difficult comparisons, with expectations for easier comparisons moving forward [18] - Bally's aims to launch its online sports betting (OSB) in seven states and expand globally, including potential markets in the UK and Europe [13][20] Company Strategy and Development Direction - Bally's is focusing on becoming a premier, full-service vertically integrated casino and resort company, enhancing its online sports betting and iGaming capabilities [14][20] - The company has partnered with Kambi and White Hat Gaming to improve its North American sports betting platform, transitioning to a variable cost model [11][25] - Bally's plans to leverage its omni-channel data capabilities to enhance customer engagement and drive growth across its brands [12][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the integration of Bally's internal systems and the performance of its operating businesses [9][10] - The recent UK government white paper on gambling regulation is expected to have a short-term impact but is seen as beneficial for larger operators in the long run [10][37] - Management remains vigilant regarding consumer spending trends but has not observed significant negative impacts on business performance [27] Other Important Information - Bally's has undergone significant management changes, with Marcus Glover appointed as the new CFO [6][7] - The company repurchased 1 million common shares for $19.8 million and $15 million of bonds for $10.6 million during the quarter [29][29] - Bally's has a strong liquidity position with over $344 million in cash and $3 billion in net debt [29] Q&A Session Summary Question: Management transition and appeal of the CFO role - Marcus Glover expressed enthusiasm for joining Bally's, highlighting the company's entrepreneurial spirit and the opportunity to build on existing foundations [34] - Robeson Reeves emphasized Glover's operational experience and financial acumen as key to driving growth [35] Question: Financial implications of the UK white paper - Robeson Reeves indicated that the short-term impact would be minimal, with larger operators likely to gain market share as smaller competitors exit [37] Question: Guidance and business trends - Robert Lavan noted that the company is taking a conservative approach to guidance upgrades early in the year, reflecting positive trends [39] Question: North America Interactive restructuring and future losses - Lavan mentioned that the company expects to close the gap in losses as iCasino grows and the new partnerships with Kambi and White Hat are implemented [41][52] Question: Tropicana's strategy and asset value - Lavan discussed the potential for development options at Tropicana, emphasizing a disciplined long-term view [43] Question: Capital allocation and share repurchases - Lavan stated that the company will continue to evaluate capital allocation, balancing share buybacks, debt repurchases, and investments in Chicago [45] Question: North America Interactive labor efficiencies - Robeson Reeves explained that the transition to a variable cost model with Kambi and White Hat would enhance profitability and operational efficiency [48][70]

Financial Performance - Total revenue for Q1 2023 was $598.7 million, an increase of 9.2% from $548.3 million in Q1 2022[219] - Income from operations rose significantly to $376.7 million in Q1 2023, compared to $22.5 million in Q1 2022[219] - Net income for Q1 2023 was $178.3 million, a substantial increase from $1.9 million in Q1 2022, reflecting a growth of 9,284%[219] - Total revenue for the three months ended March 31, 2023, increased by 9.2% to $598.7 million, compared to $548.3 million in the same period last year, driven by growth in gaming, hotel, and food and beverage segments[226] - Total gaming revenue rose by $23.2 million, or 5.0%, to $486.9 million, while total non-gaming revenue increased by $27.3 million to $111.8 million[226] - Net income for the three months ended March 31, 2023, was $178.3 million, or $3.24 per diluted share, compared to $1.9 million, or $0.03 per diluted share, for the same period in 2022[234] - Adjusted EBITDA for the three months ended March 31, 2023, was $126.4 million, an increase of $11.7 million, or 10.2%, from $114.7 million in the same period last year[234] Expenses and Costs - Gaming and non-gaming expenses as a percentage of total revenue decreased to 45.1% in Q1 2023 from 47.4% in Q1 2022[221] - General and administrative expenses increased to 42.0% of total revenue in Q1 2023, up from 34.1% in Q1 2022[221] - General and administrative expenses increased by $64.6 million, or 34.5%, to $251.6 million, primarily due to higher operating lease expenses and costs associated with recent acquisitions[228] - The company recorded a decrease in gaming expenses by $1.6 million to $217.7 million, attributed to lower marketing costs for iGaming products[227] - Total other expense increased by $34.4 million to $60.7 million, primarily due to higher interest expenses and changes in naming rights liabilities[232] Strategic Initiatives - The company is focusing on expanding its interactive gaming segment, which is seen as a significant strategic opportunity for future growth[204] - Bally's has made progress in integrating acquired assets and deploying capital for strategic growth projects, positioning itself as a vertically integrated iGaming company[205] - The company plans to invest $100 million in Rhode Island over the extended term of its master contracts, which includes expansions and new amenities[211] - Incremental revenue from recent acquisitions, including Tropicana Las Vegas and Casino Secret, contributed $35.1 million during the quarter[226] - The company has committed to invest $100 million in Bally's Twin River over the term of its master contract, with significant progress on a 14,000 square foot spa and a 40,000 square foot casino expansion[257] - Bally's Atlantic City is undergoing a $100 million refurbishment and upgrade, with approximately $20 million estimated spending in 2023[258] - The company signed a framework agreement for a Category 4 licensed casino in Centre County, Pennsylvania, with an estimated total project cost of approximately $120 million[259] - Bally's Chicago will feature approximately 3,400 slot machines, 170 table games, and 500 hotel rooms, with an estimated cost of $70 million for the temporary casino development expected to open by late summer 2023[260] Cash Flow and Financing - For the three months ended March 31, 2023, net cash used in operating activities was $16.1 million, a decrease from net cash provided of $20.8 million in the same period last year[243] - Net cash provided by investing activities increased to $319.6 million, compared to net cash used of $72.0 million for the same period in 2022, driven by $411.0 million from sale-leaseback transactions[244] - Net cash used in financing activities was $173.6 million, a significant change from net cash provided of $4.4 million in the prior year, primarily due to increased long-term debt repayments[245] - Capital expenditures for the three months ended March 31, 2023, were $43.7 million, down from $54.5 million in the same period last year, as the company focuses on generating cash flows for long-term growth[256] - The company repurchased 1,026,343 common shares for $19.8 million under its capital return program, with $174.8 million remaining available for future repurchases[246] Debt and Interest Rates - As of March 31, 2023, the company had $1.92 billion in variable rate debt and a hypothetical 1% increase in interest rates would raise interest expenses by approximately $19.2 million over the next 12 months[266] - The effective tax rate for the first quarter of 2023 was 43.6%, compared to 151.2% in the prior year, reflecting changes in valuation allowance and tax liabilities[233] Economic Environment - The company faces macroeconomic challenges, including rising inflation and interest rates, which could impact discretionary consumer spending[212] - The company does not believe that inflation had a material effect on its business during the three months ended March 31, 2023[265] - Foreign currency transaction losses for the three months ended March 31, 2023, were $4.3 million, compared to a gain of $0.2 million for the same period in 2022[268] - The company has not historically used operational hedges or forward currency exchange contracts to manage currency exchange rate fluctuations[268] Other Commitments - The company has sponsorship commitments totaling $107.5 million, with contracts extending through June 2036[264] - The company is responsible for various gaming license fees, including a $250,000 land-based gaming fee and a $15 million reconciliation fee upon issuance of a Temporary Operating Permit[263] - The company made a one-time payment of $40 million to the City of Chicago and will pay annual fixed host community impact fees of $4 million starting from operations commencement[261] - Bally's Chicago Operating Company will pay $150 million to Chicago Tribune Company for the lease termination, with $140 million secured by standby letters of credit[262] Construction and Development - The permanent casino construction is estimated to be completed by the end of 2026[260] - The company recorded a gain on extinguishment of debt of $4.0 million from repurchasing $15.0 million of Senior Notes due 2031[247] - As of March 31, 2023, cash and cash equivalents totaled $396.9 million, an increase from $223.7 million at the end of the previous year[242]

Financial Performance - Total revenue for 2022 was $2,255.7 million, a significant increase from $1,322.4 million in 2021, representing a year-over-year growth of approximately 70.5%[251] - The net loss for 2022 was $425.5 million, compared to a net loss of $114.7 million in 2021, indicating a deterioration in profitability[252] - Consolidated Adjusted EBITDA for 2022 was $548.5 million, an increase of 66.3% from $329.9 million in 2021[266] - The net income (loss) for the year ended December 31, 2022, was $(425,546,000), compared to $(114,697,000) in 2021, indicating a worsening financial performance[271] - Cash provided by operating activities increased to $270,971,000 in 2022 from $82,754,000 in 2021, demonstrating improved operational efficiency[277] Revenue Breakdown - Gaming revenue increased by $792,632, or 75.2%, from $1,053,492 in 2021 to $1,846,124 in 2022[257] - The acquisition of Tropicana Las Vegas and other 2021 acquisitions contributed $868.7 million to total revenue[258] - Total revenue for the year ended December 31, 2022, was $2,255,705, an increase of 70.6% from $1,322,443 in 2021[257] Expenses and Costs - Gaming and non-gaming expenses accounted for 44.7% and 34.4% of total revenue in 2022, respectively, showing an increase in operational costs compared to previous years[253] - Total gaming expenses increased by $405.9 million, primarily due to acquisitions, resulting in total gaming expenses of $812,918[259] - General and administrative expenses rose by $230.4 million to $774,940, largely due to the inclusion of expenses from acquisitions[260] - Impairment charges rose to 20.6% of total revenue in 2022, up from 0.4% in 2021, indicating increased challenges in asset valuation[253] - The company reported total impairment charges of $463,978,000 in 2022, primarily related to the North America Interactive segment[271] Acquisitions and Investments - The company completed the acquisition of Tropicana Las Vegas, enhancing its presence on the Las Vegas Strip, and signed an agreement to develop Bally's Chicago[243] - The company launched Bally Casino and Bally Bet Sportsbook & Casino, expanding its online gaming solutions and positioning itself as a full-service iGaming company[243] - The company plans to continue investing in its land-based casino business and expand its interactive/iGaming operations[276] - The company is committed to invest approximately $100 million in Bally's Twin River over the term of its master contract, with a $60 million investment for a 40,000 square foot casino expansion expected to open in Q2 2023[295] - Bally's Chicago project involves a total investment of $1.7 billion, including 3,400 slots and a 500-room hotel tower, with a temporary casino expected to open in the second half of 2023[298] Debt and Financing - As of December 31, 2022, the company had $2.06 billion of variable rate debt outstanding under Term Loan and Revolving Credit Facilities and $1.50 billion of unsecured senior notes[315] - The company received $597,000,000 in revolver proceeds for the year ended December 31, 2022, compared to $375,000,000 in 2021, reflecting increased borrowing activity[282] - 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[315] Capital Return and Share Repurchase - The company has a Board-approved capital return program with a total expenditure of up to $700 million for share repurchases and dividends[283] - The company repurchased 4.7 million common shares at a price of $22.00 per share, totaling $103.3 million, and an additional 6,621,841 shares for $153.4 million during the year ended December 31, 2022[284] - As of December 31, 2022, there was $194.6 million available under the Capital Return Program for future share repurchases[284] Tax and Valuation - The company established a $60.1 million valuation allowance for deferred tax assets as of December 31, 2022, due to uncertainties in realization[310] - The fair value of trademarks was determined using a relief from royalty method, which utilized Level 3 inputs such as projected revenue and discount rates[308] - The company assessed its deferred tax liabilities and concluded they are not a sufficient source of income for the realization of deferred tax assets[310] Macroeconomic Factors - The company is facing macroeconomic challenges, including rising inflation and interest rates, which could impact consumer spending and operational costs[245] - The company does not believe that fluctuations in interest rates had a material effect on its business during the years ended December 31, 2022, 2021, or 2020[316] - The company has not historically used operational hedges or forward currency exchange rate contracts to manage currency exchange rate fluctuations[317]

Financial Data and Key Metrics Changes - Bally's Corporation reported revenues expected to be between $2.5 billion to $2.6 billion for 2023, with adjusted EBITDA projected at $660 million to $700 million, including $40 million to $50 million in losses from North America Interactive [14][15] - The company closed the Tiverton Biloxi sale, resulting in over $400 million in cash on the balance sheet and $3 billion in net debt, indicating ample liquidity for announced projects [15] Business Line Data and Key Metrics Changes - Casinos & Resorts reported $96 million of EBITDAR in the quarter, with a core portfolio EBITDA margin exceeding 36% [13] - International Interactive achieved approximately $89 million of EBITDA at a 39% margin, with the UK business growing 12% year-over-year [13] - North America Interactive reported $6 million of negative EBITDA, with expectations for significant cost savings from restructuring [14] Market Data and Key Metrics Changes - The UK market is experiencing consolidation, with Bally's gaining market share due to effective targeting and a high-quality tech stack [18] - In Asia, Bally's is seeing positive year-on-year growth, with a strong player base and improving margins [9][49] Company Strategy and Development Direction - The company aims to focus on profitable growth in North America Interactive and expand its omni-channel data capabilities [12] - Bally's plans to invest in growth opportunities in Europe, Latin America, and Asia, with a particular emphasis on iCasino and sports betting [9][10] - The company is pursuing a two-site approach for new casino bids, leveraging its recent Chicago bid experience [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory in Asia and the UK, while acknowledging potential consumer pullback starting in the second quarter of 2023 [52][49] - The company is preparing for upward pressure on wages due to a tight labor market but is focused on controlling costs [45][47] Other Important Information - Bally's is restructuring its Interactive segment to streamline operations and improve profitability [9] - The company is committed to maintaining a debt-to-EBITDA ratio below five times, expected to be achieved by mid-2024 [15] Q&A Session Summary Question: Success in the UK market - Management attributed success to market consolidation and effective targeting with a high-quality tech stack, leading to robust revenues [18] Question: Update on new casino bids - Management confirmed participation in the RFA process, seeing significant potential in the market and considering a two-site approach [20] Question: Headwinds in Japan - Management noted improved sentiment and market share in Japan, with positive margin control [22] Question: Differences in customer demographics - Management observed growth in unique customers and a shift towards younger demographics, particularly in table games [25] Question: Future consumer expectations - Management expects to exceed guidance if current consumer trends hold, but anticipates potential weakness starting in Q2 [52] Question: Temporary facility opening - Management confirmed the temporary facility is on track to open in summer 2023, with all necessary approvals accelerated [54] Question: Expansion into South America - Management expressed interest in the Brazilian market, viewing it as a significant opportunity for the Bally's brand [57] Question: Cross-marketing opportunities - Management confirmed cross-marketing benefits between regional and Las Vegas properties, enhancing customer engagement [59]

Business Overview & Strategy - Bally's operates three main businesses: regional casinos in the US, iCasino operations primarily in the UK and Asia, and interactive gaming including sports betting and iCasino in North America[3] - The company is evolving into a premier, omni-channel gaming leader with a focus on integrating physical and online experiences[4, 10] - Bally's is investing in new slot products to enhance player engagement and drive incremental revenue[16, 18, 20] - A unified gaming experience is being developed through a single wallet system to power cashless gaming and integrated play across physical and online platforms[26] Expansion & Development - Bally's Chicago is a flagship casino project expected to open in phases, with a temporary facility in Summer 2023 and a permanent facility in Summer 2026, targeting 45 million annual admissions[12] - The company acquired the Tropicana Las Vegas in September 2022 and is evaluating development opportunities[13] - Several property projects are underway, including redevelopment in Kansas City and Atlantic City, with the Chicago permanent facility expected to generate $250 million in EBITDAR at full run rate[9] Financial Performance & Outlook - The company provided 2023 guidance of $25 to $26 billion in sales and $540 to $580 million in Adjusted EBITDA[56] - Casinos & Resorts are expected to contribute over $14 billion in revenues and $460 million in EBITDAR in 2023[56] - North America Interactive is projected to have an Adjusted EBITDA loss of approximately $40 to $50 million in 2023[56] - The company has total net debt of $2987 billion as of January 3, 2023[58] - Bally's estimates a real estate value range of $12 to $14 billion based on monetizeable properties[62] Interactive Division & Cost Structure - Bally's is restructuring its North America Interactive business to improve profitability, with expected cost savings of $50 million through headcount reductions ($35 million net of growth) and disposition of non-core assets ($15 million)[45] - The company is live with iCasino in New Jersey with a 3%+ market share, aiming to grow to 6-8%, and is also live in Ontario[42] - Gamesys has a player-centric approach focused on enhancing the player journey, utilizing various tools such as incentive generators and churn predictors[49, 54]

Business Operations - As of September 30, 2022, the company owns and manages 15 land-based casinos and one horse racetrack, operating approximately 14,400 slot machines and 600 table games[219]. - The company plans to develop a destination casino resort in downtown Chicago, Illinois, and has signed an agreement with the City of Chicago for this project[221]. - The company aims to invest $100 million in Rhode Island over an extended term, including expansions and new amenities at Bally's Twin River[229]. - The company has expanded its interactive business by launching the Bally Sports Network and acquiring Bally's Interactive, enhancing its omni-channel gaming offerings[221]. - The company operates under a Regulatory Agreement in Rhode Island, which includes financial covenants and restrictions on acquisitions and competitive activities[227]. - The COVID-19 pandemic has significantly impacted operations, although all properties are currently open with minimal restrictions[230]. - The company has diversified its portfolio through acquisitions, mitigating susceptibility to regional economic downturns and regulatory changes[220]. - The company’s business is organized into three segments: Casinos & Resorts, North America Interactive, and International Interactive[224]. Financial Performance - Total revenue for Q3 2022 was $578.2 million, a 83.8% increase from $314.8 million in Q3 2021[236]. - Income from operations for Q3 2022 was $53.7 million, compared to $27.7 million in Q3 2021, reflecting a 93.5% increase[236]. - For the first nine months of 2022, total revenue reached $1.68 billion, up 116.5% from $774.8 million in the same period last year[236]. - The company reported a net income of $0.6 million for Q3 2022, a significant recovery from a net loss of $57.6 million in Q3 2021[238]. - Gaming revenue for Q3 2022 was $465.7 million, a 100.9% increase from $231.8 million in Q3 2021[244]. - Non-gaming revenue for Q3 2022 was $112.5 million, up 35.6% from $83.0 million in Q3 2021[244]. - Total operating costs and expenses for Q3 2022 were $524.5 million, representing 90.7% of total revenue[240]. - Advertising, general and administrative expenses for Q3 2022 were $192.0 million, which is 33.2% of total revenue[240]. - The company has revised its calculation of Adjusted EBITDA to exclude launch costs and preopening expenses starting Q3 2022[235]. - Total revenue for the three months ended September 30, 2022 increased by 83.7% to $578.2 million, compared to $314.8 million in the same period last year[248]. - Incremental revenues from 2021 acquisitions contributed $232.4 million and $845.5 million to total revenue for the three and nine months ended September 30, 2022, respectively[249]. - Total operating costs and expenses for the three months ended September 30, 2022 increased by 82.8% to $524.6 million, compared to $287.0 million in the same period last year[250]. - Income from operations for the three months ended September 30, 2022 was $53.7 million, up from $27.7 million in the comparable period in 2021[256]. - Net income for the three months ended September 30, 2022 was $0.6 million, or $0.01 per diluted share, an increase of 101.0% from a net loss of $57.6 million in the same period last year[260]. - Consolidated Adjusted EBITDA for the three months ended September 30, 2022 was $151.0 million, up 93.9% from $77.8 million in the same period last year[261]. - Adjusted EBITDA for the North America Interactive segment for the three months ended September 30, 2022 decreased to $(19.7) million, mainly due to increased operating costs[262]. - Depreciation and amortization for the three months ended September 30, 2022 was $73.9 million, an increase of $44.9 million compared to the same period last year[255]. - The effective tax rate for the three months ended September 30, 2022 was 65.7%, compared to 8.6% for the same period in 2021[259]. - Total other expense for the three months ended September 30, 2022 was $51.9 million, a decrease from $90.8 million in the same period last year[257]. - Net income for the three months ended September 30, 2022, was $50,970,000, compared to a net loss of $22,675,000 for North America Interactive[263]. - Adjusted EBITDA for the same period was $106,905,000, with a significant increase from the previous year's adjusted EBITDA of $93,102,000[264]. Cash Flow and Capital Expenditures - The company reported a net cash provided by operating activities of $225,316,000 for 2022, up from $70,843,000 in 2021[270]. - Total cash and cash equivalents at the end of the period were $220,131,000, a decrease from $2,009,017,000 at the beginning of the period[270]. - The company incurred interest expenses of $53,000 for the three months ended September 30, 2022, compared to $31,311,000 for the same period in the previous year[264]. - The provision for income taxes for the three months ended September 30, 2022, was $17,394,000, compared to a benefit of $4,683,000 in the previous year[263]. - The company reported a depreciation and amortization expense of $15,536,000 for the three months ended September 30, 2022[263]. - Acquisition, integration, and restructuring costs amounted to $164,000 for the three months ended September 30, 2022[263]. - The company has maintained a strategy of moderate leverage and substantial capital resources to invest in its businesses and acquire properties[269]. - Adjusted EBITDAR for the three months ended September 30, 2022, was $118,740,000, reflecting the company's operational efficiency[263]. - Net cash provided by operating activities for the nine months ended September 30, 2022, was $225.3 million, a significant increase from $70.8 million in the same period of 2021[271]. - Net cash used in investing activities decreased to $69.5 million for the nine months ended September 30, 2022, down from $302.1 million in 2021, primarily due to a $223.1 million reduction in cash paid for acquisitions[272]. - Net cash used in financing activities was $189.9 million for the nine months ended September 30, 2022, compared to net cash provided of $2.16 billion in 2021, largely due to the absence of senior note proceeds and equity issuances[273]. - Capital expenditures for the nine months ended September 30, 2022, were $167.4 million, up from $65.1 million in the same period last year, with expectations to exceed 2021 amounts[285]. - The company plans to invest approximately $100 million in Bally's Twin River, with an estimated spending of $50 million in 2022 for expansion and improvements[286]. - Bally's Chicago project is set to be a $1.7 billion destination casino resort, featuring 3,400 slots and 170 table games, with a temporary casino expected to open by the end of the first half of 2023[289]. Debt and Interest Rate Exposure - The company has a total of $1.70 billion in minimum rent payable under operating leases as of September 30, 2022[283]. - As of September 30, 2022, the company had $2.01 billion of variable rate debt outstanding under its Term Loan and Revolving Credit Facilities[296]. - A hypothetical increase of 1% in the effective interest rate would result in an increase in interest expense of approximately $20.1 million over the next 12 months[296]. - The company has $215.4 million available for use under its capital return program as of September 30, 2022[274]. - The company has not historically utilized derivative financial instruments for trading purposes and does not believe that fluctuations in interest rates had a material effect on its business during the three months ended September 30, 2022 and 2021[297]. Foreign Currency Exposure - Foreign currency transaction gains for the three months ended September 30, 2022 were $0.3 million, while losses for the same period in 2021 were $42.9 million[298]. - For the nine months ended September 30, 2022, foreign currency transaction gains were $2.2 million, compared to losses of $43.4 million in the same period of 2021[298]. - A vast majority of the company's revenues are derived from the UK market and are conducted in British Pound Sterling (GBP), making them susceptible to exchange rate fluctuations between GBP and USD[298]. - The company has 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[298].

Financial Data and Key Metrics Changes - For Q3 2022, the company reported $119 million of EBITDA from the Casinos and Resorts segment, with an EBITDA margin of 39.5% excluding Atlantic City [12][8] - Adjusted EBITDA for the quarter was impacted by $3 million of rent associated with the purchase of Tropicana Las Vegas, which closed on September 26 [12] - The company updated its 2022 financial forecasts, expecting revenues of $2.25 billion and adjusted EBITDA of $540 million, including $75 million of North America Interactive EBITDA losses [13][14] Business Line Data and Key Metrics Changes - The Casinos and Resorts segment showed strong performance, with Lincoln achieving nearly double-digit revenue growth and Atlantic City reporting $9.5 million positive EBITDA [8][12] - International Interactive had approximately $76 million of EBITDA at a 33.5% margin, with the UK showing a slight year-over-year increase and Asia down 3% on a constant currency basis [12][9] - North America Interactive reported $20 million of negative EBITDA, with $7 million of EBITDA drag from non-core assets [12][13] Market Data and Key Metrics Changes - New Jersey iGaming market share climbed to 3.5%, with a focus on broadening options for the bricks-and-mortar database [7] - The UK market showed a record performance, with expectations for continued growth in Q4 [9] - Asia experienced a 3.3% decline year-over-year, prompting a revision of marketing strategies to maintain profitability [9] Company Strategy and Development Direction - The company is focused on the optimal integration of its combined assets and continues to deliver strong free cash flow [6] - There is an emphasis on identifying non-core assets in North America Interactive that do not show a near-term path to profitability [16] - The company remains interested in potential acquisitions in the casino space and is exploring opportunities outside the US for Interactive growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing performance of the Casinos and Resorts segment and noted that October trends continued positively [14][15] - The company is preparing for potential outcomes related to the delayed UK white paper and remains optimistic about the market [20] - Management acknowledged macro factors affecting the Asian market but expressed confidence in future growth [27] Other Important Information - The company ended the quarter with $3.3 billion of net debt and has ample liquidity to fund announced projects [14] - Capital expenditures are expected to be $250 million for the year, with a long-term commitment to reduce debt to EBITDA below 5x by mid-2024 [13][14] Q&A Session Summary Question: How has October been trending? - Management indicated that October is performing well, with Casinos and Resorts continuing the positive trend seen in Q3, while the UK finished October up around 10% [14][15] Question: Can you elaborate on evaluating money-losing businesses in North America Interactive? - Management stated that they are closely examining assets that do not show a near-term path to profitability and will make decisions quickly [16] Question: What are the expectations regarding the new minister in charge of the white paper? - Management expressed positive first impressions of the new minister and noted that while the gambling review is important, it may not be the top priority [20] Question: What are the drivers of the softness in Asia? - Management attributed the decline in Asia to macro factors and expressed confidence in the region's potential for growth [27] Question: What is the long-term leverage target? - Management confirmed the target is to be below 5x debt to EBITDA by 2024 [40] Question: How flexible are share repurchases in light of potential slowdowns? - Management indicated that while they plan to continue share repurchases, they will evaluate the macro environment and prioritize funding for key projects [45]

Business Strategy & Key Initiatives - Bally's aims to create engaging experiences everywhere through a unified online and retail wallet and omni-channel rewards program[5] - The company focuses on acquiring, engaging, and retaining customers through media partnerships, free-to-play games, and exclusive content[19, 21] - Bally's is tying together physical and online experiences, establishing brand presence with flagship properties like Bally's Chicago, which is expected to have 4.5 million admissions annually after the permanent facility opens in June 2026[28, 30] - The company acquired Tropicana Las Vegas in September 2022 to establish a global presence in Las Vegas[33] Financial Performance & Outlook - Gamesys' revenue evolved from $89 million in FY2010A to $1.083 billion in FY2021A, representing a CAGR of 25.5%[46] - The company anticipates approximately $400 million in EBITDAR from Casinos & Resorts on ~$1.15+ billion in revenues for 2022[55] - Bally's projects a 2022 Adjusted EBITDA loss of approximately $75 million for North America Interactive[55] - The company's 2022 guidance includes $2.25 billion in sales and $540 million in Adjusted EBITDA[55] Debt and Capital Expenditures - As of September 30, 2022, Bally's had $166 million in cash and cash equivalents and a total net debt of $3.339 billion[52] - Total capital expenditures for 2022 are projected at $250 million, including $110 million for casino expansion, $60 million for casino maintenance, $60 million for interactive SDC, and $20 million for corporate integration[56] Environmental, Social, and Governance (ESG) - Bally's is focused on reducing its carbon footprint, with the Lincoln property in Rhode Island reducing its footprint by an average of 2,327 tons per year[61] - Gamesys achieved carbon neutral certification by the Carbon Trust[61] - Bally's is committed to diversity and inclusion across all levels of the organization[65]

Financial Data and Key Metrics Changes - Bally's Corporation reported $99 million of EBITDAR in the quarter, with Atlantic City contributing negative $3 million, resulting in an EBITDAR margin of 39.2% excluding Atlantic City [17][18] - International Interactive achieved approximately $83 million of EBITDA with a margin of 35.2%, while North America Interactive reported $17 million of negative EBITDA [18][19] - The company updated its 2022 financial forecast, expecting revenue between $2.2 billion to $2.3 billion and adjusted EBITDA of $535 million to $550 million, including $60 million of North America Interactive EBITDA losses [19][21] Business Line Data and Key Metrics Changes - In the Casinos & Resorts segment, Lincoln continued to outperform expectations, while Atlantic City underperformed with negative EBITDA of $3 million against expectations of positive $4 million [8][17] - International Interactive saw a 2% year-over-year increase in the UK on a constant currency basis, despite a 30% reduction in marketing spend [9][18] - North America Interactive is in ramp-up mode, with New Jersey generating nearly $3 million of NGR in June, and the company expects continued growth and profitability for the rest of the year [10][11] Market Data and Key Metrics Changes - The UK market experienced a flat quarter in Asia, with FTDs down due to a large affiliate promotion being moved to Q3 [9][10] - The company anticipates growth from its recently launched sportsbook, benefiting from the World Cup and increased uptake from its refer-a-friend program [10] - The company is targeting a 6% to 8% market share in New Jersey by 2023, with expectations of further growth in Pennsylvania and Ontario [11][45] Company Strategy and Development Direction - Bally's is focused on integrating its casino database to provide a unified wallet and omnichannel rewards, while developing proprietary technologies for unique customer experiences [12] - The company is prioritizing iCasino states and plans to focus resources on live markets, including Pennsylvania and Ontario, while preparing for potential iGaming regulations in other states [11][50] - Bally's Chicago project is a significant strategic initiative, with plans for a temporary facility opening in June 2023 and a permanent facility by June 2026, projected to generate substantial EBITDAR [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged global turbulence but emphasized strong cash flow generation from Casinos & Resorts and International Interactive segments as critical success factors [7] - The company is cautious about inflationary pressures and is closely monitoring costs while expecting improvements in Atlantic City [8][26] - Management expressed confidence in the UK consumer base strengthening and the potential for improved performance in the second half of the year [44][69] Other Important Information - Bally's ended the quarter with $3.4 billion of debt and $176 million of cash, maintaining ample liquidity for announced projects [20] - The company announced a real estate sale to GLPI, expected to bring in $635 million in cash proceeds, with plans for further evaluations of potential sales [21] - Bally's is committed to maintaining a debt-to-EBITDA ratio below five times by mid-2024 [20][78] Q&A Session Summary Question: Update on FX impact on EBITDA - Management indicated a 10% FX impact resulting in a $20 million hit to EBITDA, factoring in Asian currencies [24] Question: Update on consumer trends in brick-and-mortar business - Management noted that trends from Q1 have continued, with some softness in lower-income areas but overall stability [26] Question: Chicago project next steps and risks - Management expressed confidence in the project timeline and budget, addressing inflation and supply chain risks [30][32] Question: Confidence in EBITDA forecasts for Chicago facilities - Management highlighted strong visitation trends and community engagement as key factors supporting their EBITDA forecasts [34][39] Question: International Interactive marketing reduction impact - Management reported a 9% reduction in FTD count despite a 30% decrease in marketing spend, indicating efficiency in marketing strategies [42][44] Question: Market share goals in New Jersey and other states - Management is targeting a 6% to 8% market share in New Jersey by 2023, with plans for expansion in Pennsylvania and Ontario [45][50] Question: Strategy for sale-leaseback transactions - Management discussed the potential for future sale-leaseback transactions, emphasizing the importance of strategic asset management [56] Question: Promotional environment across properties - Management noted stable margins and a focus on higher-end customer segments, with no significant impact from competitors [58][60] Question: Update on New York downstate casino opportunities - Management remains interested in potential opportunities and is exploring sites, awaiting the RFP process [70] Question: Expectations from the new UK prime minister on gambling regulations - Management does not expect significant changes in the regulatory landscape, anticipating a stable trajectory [73] Question: Capital strategy and leverage outlook - Management outlined a focus on maintaining a strategic balance between owned and leased assets, with a goal of sub-five times leverage by mid-2024 [77] Question: Preemptive actions regarding the UK white paper - Management has been preparing for potential regulatory changes and has adjusted strategies accordingly [79]

Business Overview - Bally's is the 3 regional casino network in the US[5], with 17 casino properties in 11 states[7, 38, 42] - The company aims to create a unified gaming experience through a single wallet powering cashless gaming and integrated play across physical and online betting[33] - Bally's is focused on acquiring, engaging, and retaining customers through a frictionless journey and continuous engagement[18] Financial Performance and Projections - Gamesys' revenue evolved from $89 million in FY 2010 to $1083 million in FY 2021, a CAGR of 25.5%[45] - The company projects $2.2-$2.3 billion in sales and $535-$550 million in Adjusted EBITDA for 2022[54] - Bally's anticipates $380-$385 million EBITDAR from Casinos & Resorts in 2022[54] - The company expects to generate $226 million in Free Cash Flow in 2022[56] Strategic Initiatives - Bally's acquired Bally's Atlantic City in November 2020 for $25 million and committed to invest $100 million[14] - The company is developing Bally's Chicago, with an initial facility opening in June 2023 and a permanent facility in June 2026, expecting 4.5 million admissions annually[29, 31] - Bally's is acquiring Tropicana Las Vegas, expected to close in the Third Quarter 2022[34] - The company has market sports betting access in 19 states and is growing[42] Share Information - Common Shares Outstanding as of July 29, 2022: 47,900,321[49] - Total Fully Diluted Shares Outstanding: 60,941,957[50]