Bally’s Corporation has reported a “solid” second quarter of 2024, as growth across Casino & Resorts, North America Interactive and the UK was offset by lower revenues in other International Interactive markets.
The company added that it expects to be at the lower end of its 2024 annual guidance.
UK growth
Publishing its Q2 financials, Bally’s reported $621.7m in consolidated revenue, a 2.5% increase when compared to the same period the previous year (Q2 2023: $606.2m).
Growth in the company’s gaming operations was offset by declines in non-gaming revenue. Gaming revenue at the end of the quarter stood at $524.8m (2023: $493.3m), while non-gaming revenue came in at $96.9m (2023: $112.9m).
Across segments, Casino & Resorts revenue rose by 3% year-over-year to $343.1m (2023: $333.2m), North America Interactive revenue improved by 94.7% to $49.2m (2023: $25.3m), while International Interactive revenue fell by 7.4% to $229.4m (2023: $247.8m).
Bally’s CEO, Robeson Reeves, noted that Casino & Resorts revenue benefited from the “ongoing ramp of operations” at Chicago Temporary Casino and stability across most of its portfolio, offset by Tropicana’s closure and “property-specific headwinds in certain markets”, resulting in the segment’s Q2 adjusted EBITDAR falling by 10% YoY.
Taking a closer look at International Interactive, Bally’s stated that a decline in revenue occurred due to lower revenues from non-UK operations.
UK revenue grew by 9% in comparison to the same period the previous year, a record performance, but other markets offset this growth. Adjusted EBITDAR for the segment dropped by 3.9% YoY to $81.3m.
Reeves commented: “The strength of our UK market reflects continuing igaming share gains and the initial results from accelerating the soft launch of our online sports betting offering.
“Outside the UK, our business in Asia was challenged in the quarter as we continue to work through several logistical and operational hurdles which directly impacted players. We believe the Asian Interactive market remains an attractive opportunity and we will continue to work to manage and grow our position in this important region.”
For North America Interactive operations, Reeves stated that Bally’s was able to outperform internal expectations following a strong performance in Rhode Island, New Jersey and Pennsylvania, as well as Bally Bet online sports betting operations. However, adjusted EBITDAR stood at a loss of $6.8m.
“We outperformed our internal expectations for this segment in the second quarter as we benefited from strong performance from our igaming operations in Rhode Island,” said the CEO.
“Further, we continue to generate excellent results in our New Jersey and Pennsylvania igaming markets as well as from our Bally Bet OSB operations, driven in part by the ongoing integration of the Kambi and White Hat technology platforms which have garnered positive player feedback and enhanced our ability to deliver a leading product offering.”
Acquisition offer
Reeves also commented on Bally’s recently accepting an acquisition offer from major shareholder Standard General, which values the operator at around $4.6bn and will see the company merge with regional casino operator The Queen Casino & Entertainment.
The Queen Casino & Entertainment operates four casinos across Illinois, Iowa and Louisiana.
“As part of the merger transaction, Bally’s stockholders will receive cash consideration of $18.25 per Bally’s share with an option to elect to maintain their equity investment in Bally’s,” Reeves said.
“The addition of four properties to our existing domestic property portfolio not only expands our platform and databases but will further diversify the markets in which we operate.
“The combination of QC&E’s development pipeline also to our own growth pipeline provides the company with a clear path toward additional revenue, cash flow growth and value accretion. We expect to provide more details around this transformative transaction in a forthcoming proxy statement.”
Looking ahead, Bally’s noted that it expects to be at the lower end of its 2024 annual guidance. The company expects its revenue in the range of $2.5bn to $2.7bn and its adjusted EBITDAR in the range of $655m to $695m.
Bally’s stated: “The company continues to take mitigation measures and has implemented tighter capital allocation strategies to maintain or improve its free cash flow position.”
Capital expenditure and software development for its core portfolio has been reduced by approximately $50m to an expected $115m. It doesn’t include developmental CapEx for the Tropicana and permanent Chicago casino development projects.