Bally’s Corporation has issued an update on bankruptcy rumours that have begun to swirl around its branded sports division, as the group’s inbound CEO seeks a path to near-term profitability.
This latter point saw Robeson Reeves, who is to replace Lee Fenton at the helm from March 31, 2023, stress that Bally’s remains “committed to taking a deep dive approach in North America to ensure that investments we make in sports have a near-term path to profitability”.
Regarding this division, the casino and entertainment operator issued an update after Sinclair Broadcast Group missed a debt interest payment that was thought to be in the region of $140m. This, local media reported, started a 30-day window to determine if the group is capable of meeting its obligations.
“Bally’s has no liability related to Diamond’s debt and Diamond holds no equity or other ownership rights in Bally’s”Bobby Lavan, Bally’s Chief Financial Officer
Bobby Lavan, Bally’s Chief Financial Officer, said of the recent news reports: “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.”
These comments come as the group disclosed its performance across 2022’s final quarter and full-year, with revenue and adjusted EBITDA up and net loss taking a significant hit.
During Q4 this latter financial reporting segment slipped from a profit of $118.69m through 2021 to a loss of $487.52m, which compounded its FY performance to close at a loss of $425.54m (2021: -$114.69m).
Revenue increased slightly through the quarter to $576.69m (2021: $547.66m), with the full-year figure up 70.57 per cent to $2.25bn (2021: $1.32bn). Gaming comprised the largest chunk across each time frame.
Adjusted EBITDA increased 22.85 per cent and 66.26 per cent during Q4 and FY to $145.81m (2021: $118.69m) and $548.51m (2021: $329.9m), respectively.
Robeson Reeves, current group President of Interactive, and incoming Chief Executive Officer, commented: “As previously reported in our preliminary release of these financial results, we are pleased to have achieved record results in both our casinos and resorts and international interactive segments. Our core businesses continue to generate fantastic cash flows.
“Significant capital expenditures toward property improvements will decrease in 2023 as we focus on generating cash flows to invest in long-term growth opportunities”George Papanier, Bally’s President of Casinos & Resorts
“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.
Adding: “In casino states, we’ve increased our market share in both New Jersey and Ontario as we integrate this business in a scalable way.”
Furthermore, the company is also reaffirming 2023 guidance, which estimates revenue closing between $2.5bn-$2.6bn and AEBITDA finishing the year in a range of $660m to $700m.
This latter figure, it was noted, includes in the region of $124m of rent expenses and between $40m and $50m of losses associated with the North American interactive division.
George Papanier, current Bally’s President of Casinos & Resorts, and incoming President, said, “As previously noted, casinos and resorts saw continued momentum across the portfolio during the fourth quarter. We also broke ground on our temporary facility in Chicago, which we expect will contribute to the business in the second half of 2023.
“Though Atlantic City generated a loss during a slower fourth quarter, it 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 to be strong into 2023, with no slowdown in the consumer, as we continue to closely monitor market macro dynamics.”