Bally's (BALY) - 2024 Q3 - Quarterly Report

Business Operations - As of September 30, 2024, the company owns and manages 15 land-based casinos across 10 states in the US, with approximately 14,900 slot machines and 550 table games [195]. - The company entered into a Merger Agreement on July 25, 2024, involving the merger with Queen Casino & Entertainment, which will enhance its market presence [198]. - On October 31, 2024, the company agreed to carve out components of its interactive business in Asia for €30 million, focusing on North American and European markets [199]. - The company aims to increase revenues by enhancing guest experiences at its casinos and resorts, which includes popular games and high-quality service [196]. - The company has a strategic focus on interactive gaming as a significant growth opportunity, particularly in regulated markets [196]. Financial Performance - Consolidated Adjusted EBITDA for Q3 2024 was $630.0 million, slightly down from$632.5 million in Q3 2023, while total revenue for the first nine months of 2024 was $1,870.1 million, compared to$1,837.4 million in the same period of 2023 [214]. - The net loss for Q3 2024 was $247.9 million, compared to a net loss of$61.8 million in Q3 2023, indicating a significant decline in profitability [214]. - Total gaming revenue for Q3 2024 was $523.9 million, an increase of$15.0 million from $508.9 million in Q3 2023, while total non-gaming revenue decreased to$106.1 million from $123.6 million [218]. - General and administrative expenses increased to$273.6 million in Q3 2024, up from $230.6 million in Q3 2023, reflecting a rise in operational costs [218]. - The company reported a loss from operations of$157.7 million in Q3 2024, compared to income from operations of $37.2 million in Q3 2023, highlighting a significant operational challenge [214]. Cost Management - Gaming expenses as a percentage of gaming revenue remained stable at 45$630.0 million, while total revenue for the first nine months increased 1.8% to $1.87 billion compared to the same periods in 2023 [219]. - The Bally's Chicago temporary casino contributed approximately$32.6 million and 64.2 million to revenue for Q3 and the first nine months of 2024, respectively [219]. - Adjusted EBITDAR for the Casinos & Resorts segment decreased by 17.7 million to $100.4 million for Q3 2024, and by$44.7 million to $289.7 million for the first nine months compared to the prior year [230]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2024, was$76.2 million, a decrease of 35.6% compared to $118.4 million for the same period in 2023 [239]. - Net cash used in investing activities for the nine months ended September 30, 2024, was$191.1 million, an increase of $188.8 million compared to$2.2 million in the prior year [241]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $75.7 million, compared to net cash used of$79.6 million in the same period of 2023 [242]. - The company issued $750 million aggregate principal amount of 5.625$750 million aggregate principal amount of 5.875% senior notes due 2031 [245]. Regulatory and Compliance - The company is subject to a Regulatory Agreement with the Rhode Island Department of Business Regulation, which includes financial covenants and operational restrictions [205]. - The effective tax rate for 2024 was 0.8%, significantly lower than the 62.7% in 2023, primarily due to an increase in the valuation allowance [226]. Future Commitments and Plans - The Company plans to sell and lease back its Bally's Twin River property for $735 million, with initial annual rent of$58.8 million, expected to be completed by 2026 [261]. - The Company has a commitment to invest $100 million in Bally's Twin River over the term of its master contract, with approximately$48.2 million remaining as of September 30, 2024 [264]. - The Company has entered into a Binding Term Sheet with GLP for up to $940 million in construction financing for the Bally's Chicago permanent casino [260]. - The Company is required to pay annual fixed host community impact fees of$4.0 million in connection with the Bally's Chicago project [269].