Financial Performance - Casinos & Resorts revenues increased by 9% year-over-year (y/y) in 3Q23, driven by growth in Rhode Island, Kansas City, Black Hawk, and Quad Cities[6, 30] - International Interactive revenue grew by 7% y/y in 3Q23 in USD[16, 31] - North America Interactive (NAI) revenue increased by 34% in 3Q23[31] - International Interactive margins improved to 35%, a 150 bps y/y increase[6, 16, 32] - Total Adjusted EBITDAR for 3Q23 was $173 million, a 6% increase[32] - The company is guiding for full-year 2023 total revenues of $24 billion to $25 billion and Adjusted EBITDAR of $640 million to $655 million[33] Business Developments - The temporary casino in Chicago opened on September 9th, with strong customer feedback[7] - The Kansas City redevelopment project was completed in mid-September[7] - Bally Bet OSB was rolled out in 4 states[7, 26] - Bally's UK is estimated to hold approximately 15% share of the iGaming market and is a slot operator with approximately 17% share[16] Strategic Initiatives - The permanent Chicago Casino remains on schedule for a 2026 opening[8] - The Oakland A's of MLB will relocate onto 9 acres of the LV Tropicana site[8] - North America Interactive iGaming continues its growth momentum with strength in New Jersey and Pennsylvania[6, 22, 24]

Financial Data and Key Metrics Changes - The company reported record second quarter revenues of $606 million, an increase of 10% year-on-year, with adjusted EBITDA of $161 million, reflecting a margin of 26.6% [20][25] - The adjusted EBITDA after accounting for rent expense was $130 million, with a margin of 21.5% [20] - The Casinos & Resorts segment generated revenues of $333 million, up 11% year-on-year, and adjusted EBITDA of $111 million, up 12% year-on-year [21][15] Business Line Data and Key Metrics Changes - The Casinos & Resorts segment reported an EBITDA margin of 33.3%, while the core portfolio, excluding lower-margin properties, had a margin of 39.4% [21] - International Interactive generated revenues of $248 million with an adjusted EBITDA of $84 million at a margin of 33.9%, driven by strong performance in the U.K., which grew 12% [21][16] - North America Interactive reported revenues of $25 million but had a negative adjusted EBITDA of $18 million, with a focus on growing iGaming in New Jersey and Pennsylvania [22][23] Market Data and Key Metrics Changes - The U.K. market continues to be a strong driver for the company's international interactive business, growing 12% in the second quarter [16][21] - The company is optimistic about the iGaming market in Pennsylvania, which launched in early June, and anticipates launching in Rhode Island in March 2024 [13][22] - The company is also focusing on expanding its presence in Ontario and leveraging its brand for online sports betting internationally [14][17] Company Strategy and Development Direction - The company is focused on integrating its three business segments and enhancing operational performance while managing its development pipeline [19][8] - Significant projects include the temporary casino at Medinah Temple in Chicago, expected to generate $50 million to $60 million of EBITDA in 2024, and the development of a permanent facility anticipated to open in 2026 [10][11] - The company aims to become a premier, full-service, vertically integrated Casinos & Resorts iGaming and online sports betting company [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining guidance for 2023, expecting revenues between $2.5 billion to $2.6 billion and adjusted EBITDA of $665 million to $700 million [25][26] - The company is closely monitoring consumer spending trends and is prepared to adjust strategies as necessary [24] - Management highlighted the positive impact of the smoking ban repeal in Shreveport, Louisiana, as a potential driver for performance [11] Other Important Information - The company has over $184 million in cash on its balance sheet and $3.2 billion in net debt [27] - A share repurchase program was executed, with approximately 748,500 shares repurchased for $10.7 million [26] - The company is exploring financing options for the Chicago project, with construction expected to begin in the second quarter of 2024 [72] Q&A Session Summary Question: Transition of CFO and adjustments - The new CFO, Marcus Glover, expressed excitement about joining a strong team and the positive performance of the Casinos & Resorts and International Interactive segments [29][30] Question: Capital allocation and deleveraging path - The focus is on the development pipeline, particularly the Chicago project, with confidence in managing Tropicana's future [31][32] Question: iGaming potential in Rhode Island - Management believes iGaming will drive higher customer spend without cannibalizing land-based operations [34][35] Question: Market share growth in New Jersey - Growth will be driven by utilizing the retail casino database and enhancing product offerings, particularly with the addition of sports betting [36][37] Question: Performance of Atlantic City property - The property has shown profitability and record revenue since its relaunch, with expectations for continued improvement [39] Question: North America Interactive expenses and profitability - The focus remains on iGaming opportunities, with expectations for reduced losses and improved profitability in the future [40][41] Question: Chicago project cash flows and financing - The temporary casino is expected to generate $50 million to $60 million annually, with cash flow estimates of $3.5 million to $5 million per month post-opening [46][47] Question: International Interactive growth sustainability - Management is confident in continued growth in the U.K. market, driven by market consolidation and customer acquisition [50][51] Question: Updates on asset integration and cost containment - The company is balancing shared services and property-level operations to maintain performance while optimizing costs [58][59] Question: Digital product strengths - The focus is on utilizing data to enhance product offerings and customer engagement, with a belief that product quality will drive business success [60][61]

Financial Performance - Total revenue for Q2 2023 was $606.2 million, an increase of 9.7% from $552.5 million in Q2 2022[217] - Income from operations for Q2 2023 was $6.0 million, down from $85.3 million in Q2 2022[217] - Net loss for Q2 2023 was $25.7 million, compared to a net income of $59.5 million in Q2 2022[217] - For the first six months of 2023, total revenue reached $1,204.9 million, up from $1,100.8 million in the same period of 2022[217] - Total revenue for Q2 2023 increased by $53.7 million to $606.2 million, up 9.7% from $552.5 million in Q2 2022[225] - Total revenue for the six months ended June 30, 2023 rose by $104.2 million to $1.20 billion, a 9.5% increase from $1.10 billion in the same period last year[225] - Gaming revenue for Q2 2023 was $493.3 million, an increase of $38.2 million or 8.4% compared to $455.1 million in Q2 2022[225] - Non-gaming revenue for Q2 2023 was $112.9 million, up $15.5 million or 15.9% from $97.4 million in Q2 2022[221] - Net income for the first half of 2023 was $152.7 million, an increase of $91.3 million, or 148.7%, from $61.4 million in the same period last year[235] - For the six months ended June 30, 2023, the total net income was $152.7 million, compared to a net income of $61.4 million for the same period in 2022, representing a year-over-year increase of approximately 148%[243] Expenses and Costs - General and administrative expenses for Q2 2023 increased by $57.2 million to $250.0 million, a 29.6% rise from $192.7 million in Q2 2022[228] - Gaming expenses for Q2 2023 rose by $14.9 million to $218.9 million, an increase of 7.3% from $204.1 million in Q2 2022[226] - Non-gaming expenses for Q2 2023 increased by $5.9 million to $52.3 million, a rise of 12.7% from $46.4 million in Q2 2022[227] - Total operating costs and expenses for Q2 2023 were 99.0% of total revenue, compared to 84.6% in Q2 2022[219] - Total other expense increased by $39.9 million to $60.3 million for Q2 2023, primarily due to increased interest expense[232] - The company’s total interest expense for the six months ended June 30, 2023, was $130.4 million, compared to $91.5 million for the same period in 2022, reflecting an increase of approximately 42%[243] Adjusted EBITDA - Adjusted EBITDA is a key performance indicator for the company, reflecting its core operating results[212] - Adjusted EBITDA for Q2 2023 was $130.0 million, a decrease of $7.0 million, or 5.1%, from $137.0 million in Q2 2022[235] - Adjusted EBITDA for the Casinos & Resorts segment decreased by $8.3 million to $79.7 million in Q2 2023 compared to the same period last year[236] - Adjusted EBITDA for the International Interactive segment increased by $2.0 million, or 2.4%, to $84.6 million in Q2 2023 compared to Q2 2022[237] - Adjusted EBITDA loss for the North America Interactive segment improved to $(17.7) million in Q2 2023 from $(20.9) million in Q2 2022[238] - Adjusted EBITDA for the six months ended June 30, 2023, was $256.4 million, compared to $251.7 million for the same period in 2022, indicating a slight increase of about 1%[244] Cash Flow and Investments - Net cash provided by operating activities decreased to $64.1 million for the six months ended June 30, 2023, down from $164.5 million in the same period of 2022, reflecting a decline of approximately 61%[250] - Net cash provided by investing activities increased significantly to $224.0 million for the six months ended June 30, 2023, compared to a cash outflow of $55.8 million in the prior year, marking a year-over-year improvement of $279.8 million[251] - The company repurchased 1,774,845 common shares for a total cost of $30.5 million under its capital return program during the six months ended June 30, 2023[252] - As of June 30, 2023, the company had $372.8 million in cash and cash equivalents, an increase from $231.4 million at the end of the same period in 2022, representing a growth of approximately 61%[249] - The company recorded a gain on extinguishment of debt of $4.0 million after repurchasing and retiring $15.0 million of Senior Notes due 2031[253] - The company has $164.1 million available for use under its capital return program as of June 30, 2023, subject to regulatory and debt agreement limitations[252] Economic and Operational Outlook - The company faces risks from global economic challenges, including inflation and supply-chain disruptions, which may impact consumer spending[211] - The company operates 15 land-based casinos and one horse racetrack across ten states in the US, with approximately 14,700 slot machines and 500 table games[200] - The company is set to become the exclusive provider of iGaming in Rhode Island for 20 years starting March 1, 2024[202] - The company aims to enhance guest experiences at its casinos and resorts by providing popular games and high-quality amenities[201] - The company has committed to invest $100 million in Rhode Island over the extended term of its master contracts, which includes expansions and new amenities[210] Capital Expenditures and Future Investments - Capital expenditures for the first half of 2023 were $119.5 million, slightly up from $116.1 million in the same period last year[264] - The Company is committed to invest approximately $100 million in Bally's Twin River over the term of the master contract, with $60 million already spent on expansions[265] - Bally's Atlantic City refurbishment is estimated to cost around $100 million over five years, with $20 million planned for 2023[266] - The total estimated cost for the Category 4 licensed casino in Centre County, Pennsylvania is approximately $120 million[267] - The Company expects to spend at least $1.34 billion on the design, construction, and equipping of the temporary and permanent casino in Chicago[270] Debt and Lease Obligations - As of June 30, 2023, the Company had a minimum rent payable under operating leases of $2.36 billion[259] - The Master Lease with GLPI requires combined minimum annual payments of $100.5 million, with an annual escalation of at least 1%[260] - The acquisition of Bally's Tiverton and Hard Rock Biloxi properties for $625.4 million increased the Master Lease payments by $48.5 million[261] - As of June 30, 2023, the Company had $1.93 billion of variable rate debt outstanding, with a potential interest expense increase of $19.3 million from a 1% rate hike[276] Foreign Currency Impact - Foreign currency transaction losses for the six months ended June 30, 2023, were $5.9 million, compared to gains of $2.0 million in the same period of 2022[278]

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]

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]