Operator News
US – Bally’s fourth quarter propped up by casino results with online needing ‘restructuring’
By Phil - 14 February 2023
Bally’s Corporation has reported preliminary revenue for the fourth quarter ended December 31, 2022, of of $576.7m with casinos and resorts hitting a personal best but online revenue described as ‘unacceptable’.
This yielded a net loss of $476.8m including non-cash goodwill and asset impairment charges of $464m, primarily related to the Bet.Works, Monkey Knife Fight and Gamesys acquisitions, giving Adjusted EBITDA of $145.8m. Bally’s expects to report its full 2022 results of operations after market close on February 23, 2023.
Robeson Reeves, current Bally’s President – Interactive, and incoming Chief Executive Officer, said: “As our businesses continue to integrate, we are pleased to achieve record results in both our Casinos & Resorts and International Interactive segments. Our core businesses are generating fantastic cash flows. UK revenue grew 12 per cent organically in the fourth quarter as regulations continue to play through, while in December, Asia saw positive year-over-year organic growth, proving that our initiatives to maintain a competitive advantage in that market are effective.”
Reeves, continued: “Simply put, our North America Interactive results in 2022 were unacceptable. In response, through our announced restructuring plan of the Interactive business in January, we are taking a deep dive in our approach to North America to ensure that investments we make in sports have a near-term path to profitability. In iCasino states, we continue to take share in New Jersey and Ontario as we integrate this business in a scalable way. As part of the restructuring, we are evaluating multiple options, including leasing technology structures that integrate quickly and effectively with our world class iCasino and Marketing tech stacks. We also expect our restructuring efforts to drive benefits in our International Interactive segment.”
George Papanier, current Bally’s President – Casinos & Resorts, and incoming Bally’s President, said: “Casinos & Resorts saw continued momentum across the portfolio as we welcomed new spa amenities in Lincoln. Additionally, we broke ground on the temporary facility in Chicago, which we expect will contribute to the business in the second half of 2023. Though it generated an expected loss during a slower fourth quarter, Atlantic City continues to progress and we expect the property to be profitable in 2023. Significant capital expenditures toward property improvements will decrease in 2023 as we focus on generating cash flows to invest in long-term growth opportunities for the entire Bally’s portfolio. Finally, business momentum continues strong into 2023, with no slowdown in the consumer as we continue to closely watch market macro dynamics.”
Bally’s estimates revenue for the year ending December 31, 2023 in the range of $2.5bn to $2.6bn and Adjusted EBITDAR in the range of $660m to $700m, which includes approximately $124m of rent expense (cash rent of $119m) and a range of $40 to $50m of Adjusted EBITDA losses in North America Interactive.
Bally’s has also announced that Lee Fenton, CEO, will step down and Robeson Reeves, President – Interactive, will take over as CEO, effective March 31, 2023. Additionally, George Papanier, long-time Bally’s executive, will become Bally’s sole President.
Fenton became CEO of Bally’s on October 1, 2021 following the acquisition of Gamesys Group PLC where he had been CEO since 2015. Fenton will also step down from the Bally’s Board of Directors.
Soo Kim, Chairman of Bally’s Corporation’s Board of Directors, said, “On behalf of the Board of Directors, I want to thank Lee for his excellent leadership and valuable contributions to Bally’s. Lee has led Bally’s through the effective integration of Gamesys, leaving us well positioned for future growth. During his time, he also established the purpose and values of what is now an integrated Bally’s group. We look forward to building on what Lee has helped develop, and we wish him all the best in his next chapter.”
Kim continued, “I am excited to have Robeson succeed Lee as CEO. Robeson has an extraordinary mind and the drive required to excel as he takes the helm. Robeson has been a member of the Board since the Gamesys acquisition and his appointment represents the Board’s commitment to the development of the very best talent at Bally’s.”
Lee Fenton, Bally’s outgoing Chief Executive Officer, said, “I want to thank Soo and the rest of the Board for my time at Bally’s and for the work through the transition to Robeson’s leadership. Bally’s is an extraordinary business with extraordinary people, and I want to thank each and every one of them for the support they have shown me and the commitment they continue to bring to the business. It is particularly special for me to be able to hand the reigns to Robeson with whom I have worked for over 14 years. Robeson is a unique talent and the time is right for him to lead Bally’s.”
Robeson Reeves, Bally’s incoming Chief Executive Officer, said: “I am honored to lead Bally’s and grateful for the support and confidence shown in me by my fellow Board members. We are a unique company with a robust core and an extraordinary set of opportunities ahead of us. I look forward to working hard with my Executive Team and all our teams to take those opportunities and maximize our growth.”
Bobby Lavan, Bally’s Chief Financial Officer, provided commentary on recent news reports regarding Diamond Broadcast Group. “In 2020, Bally’s acquired naming rights over Diamond’s regional sports networks. Sinclair Broadcast Group separately agreed to promote the Bally’s brand over Sinclair networks. However, the Bally’s brand and naming rights are owned by Bally’s alone. Bally’s has no liability related to Diamond’s debt and Diamond holds no equity or other ownership rights in Bally’s. We continue to monitor the Diamond situation closely and look forward to working with the new management team. Bally’s will continue to promote its brand through multiple means, including our national portfolio of Bally’s branded casinos, various media partnerships like that with Sinclair and the Tennis Channel and our global digital portfolio.”
