Bally’s Corporation Sees Positive Q1 Growth with Strong Interactive Segment Performance

07.05.2024

Bally’s Corporation has reported a modest revenue increase of 3.3% in the first quarter of 2024, reaching $618.5 million.

This growth has been primarily driven by substantial gains in its Casinos & Resorts and North America Interactive segments, despite a slight downturn in its International Interactive operations.

Diverse Segment Performance

Robeson Reeves, CEO of Bally’s Corporation, lauded the quarter as a “strong” start to the year. Particularly noteworthy was the North America Interactive segment, which saw a dramatic 70.2% increase in revenue to $41.5 million. This surge was significantly aided by the introduction of legal online casino operations in Rhode Island, where Bally’s exclusively holds the operating license.

In contrast, the International Interactive revenue dipped to $234.7 million from $245.6 million in Q1 2023. Despite this, Reeves remains optimistic about the company’s core UK operations, attributing the international segment’s decline to challenges in markets outside the UK.

Robust Casino and Resort Operations

The Casinos & Resorts division of Bally’s also demonstrated growth, increasing 4.1% year-over-year to $342.3 million. This boost is largely attributed to contributions from the company’s temporary Chicago casino and ongoing preparations for the demolition of Tropicana Las Vegas in October, paving the way for the new Oakland Athletics stadium.

Reeves emphasized the strategic importance of these moves, noting, “This step is crucial for keeping to our expected timeline, which includes the start of construction of their new stadium in the second half of 2025.”

Financial Details and Operational Efficiency

Bally’s total gaming operations generated the bulk of the group’s revenue, totaling $516.1 million, up by 6.0% from the previous year. However, non-gaming activities saw a decrease, pulling in $102.4 million, an 8.4% drop from the prior year.

Facing a substantial 211.9% rise in net operating costs at $692.4 million, Bally’s is taking decisive action. Marcus Glover, Chief Financial Officer, stated, “We are evaluating all business areas and implementing initiatives to streamline or centralize operations where it makes sense,” showcasing the company’s focus on enhancing operational efficiency and cost reduction.

Strategic Challenges and Outlook

Amid these developments, Bally’s maintains its revenue guidance for 2024, expecting to achieve between $2.5 billion and $2.7 billion, with adjusted EBITDAR projected to be between $655 million and $695 million.

However, concerns remain as analysts from Macquarie Group have pointed out potential issues with leverage and free cash flow, contributing to a 6% year-to-date decline in Bally’s shares. Macquarie has adjusted its EBITDA estimates for Bally’s from 2024 to 2026, highlighting risks related to project execution and consumer spending trends in the US.