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    Bally's Corp (BALY)

    Q3 2024 Earnings Summary

    Reported on Apr 4, 2025 (After Market Close)
    Pre-Earnings Price$17.62Last close (Nov 6, 2024)
    Post-Earnings Price$17.60Open (Nov 7, 2024)
    Price Change
    $-0.02(-0.11%)
    • North America Interactive revenue surged by 55% and the rollout of Bally's branded sports betting product—with launches in 10+ markets and planned expansion into additional states—demonstrates robust growth potential in a high-margin digital segment.
    • The continued expansion of the land-based portfolio, exemplified by the strong performance of the Chicago temporary facility and upcoming permanent casino developments, provides a solid foundation for long-term revenue uplift and customer engagement.
    • Strategic initiatives, such as shifting to a high-margin royalty model for specific markets and strengthening the U.K. Interactive segment (with 12% revenue growth), underline a refined focus on operational efficiency and profitability enhancement.
    • Market Headwinds Impacting Revenues and Margins: The performance in segments like Casino & Resorts faced headwinds—evidenced by a 2% revenue decline in the segment and a 15% decrease in adjusted EBITDAR—with specific challenges such as infrastructure disruptions (e.g., in Rhode Island) and issues in Atlantic City.
    • Regulatory Uncertainty: Delays in state licensing processes—illustrated by the prolonged process for awarding new downstate casino licenses in New York (bids expected in June 2025 and awards in early 2026)—raise concerns about near-term project execution and revenue realization.
    • Execution Risks in Development Projects: The reliance on large-scale development, such as the flagship Chicago casino, carries execution risks related to regulatory approvals, site plan confirmations, and construction schedules, which could delay revenue generation from these investments.
    TopicPrevious MentionsCurrent PeriodTrend

    North America Interactive Growth

    Q1 highlighted strong iGaming operations with a 70% YoY revenue growth driven by launches in Rhode Island, New Jersey, and Pennsylvania. Q2 reported revenue of $49.2 million with a 95% YoY improvement and emphasis on tech integration challenges impacting iGaming growth.

    Q3 reported a 55% YoY improvement with $46 million in revenue, focusing on online sports betting expansion and positioning for positive EBITDA.

    Consistent focus on growth with evolving performance metrics and improved outlook, though the YoY growth rate shows some variability.

    Technology Integration Challenges

    Q1 detailed duplicative technology stacks and the need to transition to unified platforms. Q2 discussed ongoing migration efforts using Kambi and White Hat platforms with a planned full integration by Q4 2024.

    Q3 emphasized migration to the White Hat platform coupled with efficiency initiatives and separation of Asia operations into a licensing royalty model.

    Evolving from integration challenges to leveraging efficiency initiatives and a new licensing model, reflecting operational improvements.

    Chicago Casino Facility Development and Expansion

    Q1 focused on ramping up the temporary facility with ambitious upgrades and outlined a permanent facility opening by September 2026. Q2 elaborated on significant funding commitments, detailed project features, and approvals in progress.

    Q3 reported stabilized temporary facility performance, strong customer database growth, and maintained the permanent facility timeline for a September 2026 opening.

    Steady progress across periods with consistent long-term timelines and operational stabilization at the temporary facility.

    UK Interactive Performance and Digital Sports Betting Expansion

    Q1 noted strong UK performance with increased revenues, record active customers, and plans for OSB launches in the UK and Spain. Q2 confirmed continued revenue growth (9–8% increases), improved margins, and further market launches, including OSB expansion in North America.

    Q3 reported a 12% revenue increase in the UK, with digital sports betting expansion through Bally Bet now live in 10 markets and an upcoming launch in New Jersey.

    Consistently strong performance with ongoing expansions in both the UK and US markets, underpinning a robust interactive strategy.

    Regulatory and Execution Risks in Casino and Development Projects

    Q1 provided detailed discussions on delays in New York licensing, construction challenges (e.g., Tropicana demolition), and union-related cost pressures. Q2 expanded on regulatory uncertainties in New York and execution risks in Chicago and Las Vegas projects with multiple approvals pending.

    Q3 contained more muted mentions—discussions on city approvals for Chicago and hints at ongoing licensing delays, with fewer elaborations than earlier periods.

    A reduced focus in Q3 suggests that some earlier regulatory and execution challenges may be resolving or are being managed more efficiently.

    Market Headwinds and Infrastructure Disruptions in Casino & Resorts Operations

    Q1 cited severe winter weather impacting margins, Providence Bridge construction disruptions, and union contract-induced wage pressures. Q2 highlighted similar infrastructure issues in Rhode Island and turnover in the Atlantic City relationship team, along with ramp-ups in Chicago.

    Q3 noted modest revenue declines (2%) driven by continuing infrastructure disruptions in Rhode Island and challenges in Atlantic City—but adverse weather and labor cost pressures were not mentioned.

    Infrastructure challenges persist, yet issues like adverse weather and labor cost pressures have dissipated, indicating some stabilization in operational headwinds.

    Emergence of Bally's Branded Sports Betting Product Expansion

    Q1 discussed the rollout of Bally Bet across multiple markets and its role as a funnel for iGaming growth, along with leveraging sports betting to capture cross-product play. Q2 emphasized further market launches in North America and improvements from platform consolidation.

    Q3 introduced a new Bally's branded sports betting product (in addition to Jackpotjoy), with Bally Bet now active in 10 markets and a major launch in New Jersey scheduled alongside a platform migration.

    The product expansion is accelerating, with clear strategic moves to broaden market reach and enhance technological integration.

    Adoption of a High-Margin Royalty Model

    No discussion in Q1 or Q2.

    Q3 introduced the separation of Asia operations into a licensing royalty model, aiming to monetize high-margin license revenues while exiting a costly development team, with only modest EBITDA dilution.

    A new strategic topic emerging in Q3 to improve margins through operational restructuring.

    International Market Risks

    Q1 addressed Japan’s weakened yen (34‐year low) and its impact on revenue, while also noting the launch of online Pachinko to counterbalance risks. Q2 discussed further risks in Japan and Asia due to currency devaluation and regulatory sentiment, affecting consumer behavior.

    Q3 did not include any specific mention of international market risks such as Japan’s currency fluctuations.

    An issue that was prominent in earlier quarters is not mentioned in Q3, suggesting either stabilization or reduced emphasis.

    Adverse Weather and Labor Cost Pressures (No Longer Prominent)

    Q1 included detailed analysis of severe winter weather affecting margins (dropping from 30% to 24%) and union contract renewals causing significant wage pressures. Q2 did not mention these factors.

    Q3 did not mention adverse weather or labor cost pressures.

    Issues that were significant in Q1 have effectively dissipated by Q2 and Q3, indicating a normalization of operating conditions.

    1. No Q&A
      Q: Were any Q&A questions asked?
      A: The available transcripts only include prepared remarks and do not contain any Q&A session details (N/A).