Bally’s Corporation posted a $1.45 per share loss for 2021 today, as it estimated its year-long revenues as being between $2.4 billion and $2.5 billion, with cash flow in the neighborhood of $560 million to $580 million. Bally’s is carrying $3.5 billion in debt with $200 million cash on hand.
Fourth-quarter cash flow was negatively impacted by a modest loss at Bally’s Atlantic City. Gaming revenue nevertheless dominated the picture, with the hotel, food and beverage, retail, and entertainment segments each failing to crack the $100 million mark. Bally’s spent $2.5 millionon rebranding, including the former Jumer’s Casino Rock Island (now Bally’s Quad Cities) and Tropicana Evansville (redubbed Bally’s Evansville).
Omicron was blamed for depressing late-year results, along with a smoking ban that negatively impacted Bally’s Shreveport. Even so, CEO Lee Fenton pronounced himself “extremely excited” about both the recent past and near future, citing “significant progress” in 2021.
“We’ve got a tremendous opportunity with the assets we’ve pulled together over the last 24 months. Going into 2022, we expect revenues to be relatively flat,” compared to prior-year revenues, Fenton added, with a company focus on – among other things – capex reinvestment in its properties. Fenton said Bally’s Atlantic City was “front-loaded” in that respect, but that the Kansas City casino, which has seen spectacular revenue increases since rebranding, will receive 40,000 square feet of additional amenities.
The company’s original casino, Twin River in Lincoln, Rhode Island, is also being enlarged by 40,000 square feet. The emphasis will be on more gambling product, but extra Asian food options and a Korean spa are being added, with an eye to pushing back against the pull of Encore Boston Harbor.
As for future Bally’s projects, the casino-selection process in Chicago has been delayed a month until April, although Fenton said, “We continue our dialogue” with Mayor Lori Lightfoot.
Bally’s had no comment, however, on its plans for the Tropicana Las Vegas, an acquisition expected to close in the third quarter of this year. All Bally’s execs would say was that they are in talks with development partners for the Las Vegas Strip property, although Fenton allowed that he was “excited about the opportunity to be in Las Vegas.”
Much more was said on the digital front. Fenton led off by insisting that he didn’t want to rush product to the market, indicating that the company’s sports-betting product would launch only in Arizona and New York, two fast-growing markets, then expand to Ontario in the summer. He also wanted to avoid “continued irrational spending on sports betting,” one of the reasons for the slow rollout. Even so, he said, “We have good momentum” in Bally’s i-casino thanks to the company’s TV presence via Bally’s Sports.
Marketing in New York state was being budgeted with an eye on the 51 percent tax rate on revenue and Bally’s is leaning heavily on its “ample” New Jersey database, which contains myriad customers from New York. Fenton predicted, “I don’t think you’ll see the same tactics from Bally’s as the other major players with [their] very, very heavy spend above the line.”
As far as interactive-expansion costs are concerned, the company forecast a $60 million negative return on investment this year and again next year, moving to profitability in 2024. Bally’s also repurchased $87 million in shares in the fourth quarter, but would make no commitments beyond that.
In the United Kingdom, Fenton admitted to being kept on tenterhooks waiting for the issuance of the governmental White Paper on gaming regulation, particularly with regard to marketing. He said Bally’s spend-per-customer is low, “so it looks good for us,” but he expects small companies to exit the market (some already have), while bigger ones may consolidate.
