Rhode Island-based Bally’s Corp. reported a profit of $2 million on revenues of $548 million and $115 million in cash flow. This was achieved despite a variety of headwinds, including $5 million in weather-related losses in January, a $6.5 million loss in Atlantic City, and $19 million in red ink from interactive operations.
On the plus side, CFO Robert Levan reported positive numbers from the Boardwalk in March and April. In addition, due to the return of smoking and the lifting of a mask mandate, the company’s legacy properties in Rhode Island were experiencing revenues not seen since early 2019, “significantly above our long-term forecast.” The only potential headwind, executives said, is inflation, which so far has been negated by pent-up demand and a leaner, post-pandemic, cost structure.
In the digital sphere, Bally’s launched live-dealer games in Virginia, went live in Arizona on March 4, and expects New York State to follow later in the second quarter. Looking further forward, the company plans to focus its igaming energies on states where internet casino gambling is either imminent or has a strong chance of legalization.
As for inflationary pressures, Levan said, “We’re watching the low-income customer very carefully and adjusting our priorities accordingly.”
“The quarter started weak,” Leven continued, “with weather impact” that drove terrestrial-casino revenues down five percent from 2021, “but April has been strong.” Still, Bally’s expects revenue to be at the lower end of guidance for the next few years. The company has budgeted $100 million for property upgrades and maintenance this year, which is turning the corner for Bally’s Atlantic City, where ongoing refurbishment of the aged property is manifesting in the form of positive return on investment.
A buyout offer from Chairman Soo Kim’s Standard General corporation has petered out, “in significant part,” said Leven, because it was to be financed by sales and leasebacks of Bally’s real estate, for which the company has other plans. Since an agreement could not be reached, Bally’s will be making an as-yet-unspecified tender offer to increase the return to shareholders.
Bally’s made numerous headlines in Chicago after the Chicago Sun-Times reported that Mayor Lori Lightfoot has unilaterally tapped the company’s Bally’s Tribune proposal (pictured) as the one to get a Windy City casino concession, an allegation Lightfoot swiftly denied. Company executives weren’t asked about, nor did they comment on, the controversy, sticking to skeletal details of the $1.7 billion proposal.
President of Retail George Papanier speculated that it could take nine to 18 months to get a temporary casino ready should Bally’s receive the nod, with a permanent resort requiring three years of construction. The project would be funded by monetizing Bally’s existing casino properties, with executives hinting at more REIT transactions, as well as tapping what they called “a very significant land bank.”
Leadership was even tighter-lipped on the future of the Tropicana Las Vegas, the acquisition of which they expect to close in the autumn. Virtually all that was said was that any development would be done with a joint-venture partner and that such a redevelopment “would be a long-term opportunity,” according to Papanier, potentially spelling doom for the venerable Las Vegas Strip resort in its current form.
Bally’s also has a significant online presence in the United Kingdom, where gaming companies are keenly awaiting the results of the government’s Gambling Review. CEO Lee Fenton characterized the process as “delay on delay in terms of getting the white paper out,” plus “growing noises that we don’t want growing documentation of players,” particularly at the low end. Fenton said this was drawing support from conservative members of Parliament, “who don’t want a nanny state.” As for responsible-gaming enforcement, “Most of what will be proposed in the UK, we’re already operating inside of.”
