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Item 9A. Controls and Procedures

2023-03-01 compared with 2022-03-01 · 71 added, 52 removed, 232 unchanged (35% of the section changed)

3 unchanged sentences

Based on this evaluation, our chief executive officer and chief financial officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective.

Refer to the below for a discussion of the Company’s remediation of previously reported material weaknesses.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).

During the year ended December 31, 2021, the Company completed its acquisitions of Bally’s Evansville, Bally’s Quad Cities, Bally’s Lake Tahoe, SportCaller, MKF, Bally Interactive, AVP, Telescope, Degree 53 and Gamesys, collectively (the “Acquired Companies”).

Since the Company has not yet fully incorporated the internal controls and procedures of the Acquired Companies into the Company’s internal control over financial reporting, management excluded the Acquired Companies from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021.

These acquisitions on a combined basis constituted approximately $864.9 million, or 13.2%, of the Company’s total consolidated assets, and approximately $427.6 million, or 32.3%, of the Company’s consolidated revenues as of and for the year ended December 31, 2021.

The Company completed its acquisition of Tropicana Las Vegas on September 26, 2022 and has not yet fully incorporated the internal controls and procedures of Tropicana Las Vegas into the Company’s internal control over financial reporting.

Therefore, management excluded Tropicana Las Vegas from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022.

This acquisition constituted approximately $326.8 million, or 5.2%, of the Company’s total consolidated assets, and approximately $24.1 million, or 1.1%, of the Company’s consolidated revenues as of and for the year ended December 31, 2022.

Based on our assessment, management believes that, as of December 31, 2022, the Company’s internal control over financial reporting is effective based on these criteria.

Deloitte & Touche LLP, the Company’s independent registered public accounting firm that audited the Consolidated Financial Statements for the year ended December 31, 2022, issued an attestation report on the Company’s internal control over financial reporting which immediately follows this report.

Remediation of Previously Reported Material Weaknesses

As previously disclosed in Part II, 9A.

Controls and Procedures in the Company’s Form 10-K/A for the year ended December 31, 2021, subsequent to the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, management identified deficiencies in internal control over financial reporting that resulted in material weaknesses.

Specifically, the Company did not appropriately design a control to monitor the functional currency assessment of its subsidiaries in accordance with ASC Topic 830, Foreign Currency Matters, specifically with regard to foreign currency held by a newly formed subsidiary to effectuate a large international acquisition.

The Company did not record the foreign currency transaction loss through earnings as required by ASC Topic 830 and did not reassess this conclusion upon review of the accumulated other comprehensive loss account each subsequent period.

This design deficiency contributed to the potential for there to have been material errors in the Company’s financial statements and therefore resulted in the following material weaknesses:

• Risk Assessment— control deficiencies constituting a material weakness, either individually or in the aggregate, relating to identifying and assessing changes in the business that could impact the system of internal controls;

• Control Activities— control deficiencies constituting a material weakness, either individually or in the aggregate, relating to:

(i) designing controls that would address relevant risks identified through the assessment of changes in the business and (ii) operation at a level of precision to identify all potentially material errors.

The material weaknesses contributed to the correction of an error in the consolidated financial statements as originally filed for the year ended December 31, 2021, for which the Company concluded such error required an immaterial revision of the previously reported financial statements and related notes thereto.

In response to the material weaknesses in the Company’s internal control over financial reporting, management enhanced its risk assessment to identify changes in its business that could impact the system of internal controls and implemented control activities related to the monitoring of foreign currency and the application of ASC 830.

Management concluded that these controls were operating effectively at December 31, 2022.

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2021, the Company completed its acquisitions of the Acquired Companies, as defined above.

See Note 5 “ Acquisitions ” included in Part II.

Item 8 of this Annual Report on Form 10-K for a discussion of the acquisitions and related financial data.

The Company is currently in the process of integrating the Acquired Companies’ internal controls over financial reporting.

Except for the inclusion of the Acquired Companies, there has been no change in our internal control over financial reporting that occurred during the fourth quarter of 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

During the year ended December 31, 2022, the Company completed its acquisition of Tropicana Las Vegas, as defined above.

See Note 6 “ Business Combinations ” included in Part II.

Item 8 of this Annual Report on Form 10-K for a discussion of the acquisition and related financial data.

The Company is currently in the process of integrating Tropicana Las Vegas’ internal controls over financial reporting and except for its inclusion and the remediation of the previously reported material weakness described above, there has been no change in our internal control over financial reporting that occurred during the fourth quarter of 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated March 1, 2023, expressed an unqualified opinion on those financial statements.

Bally’s Evansville, Bally’s Quad Cities, Bally’s Lake Tahoe, SportCaller, Monkey Knife Fight, Bally Interactive, AVP, Telescope, Degree 53, and Gamesys, collectively (the “Acquired Companies”), whose financial statements constitute, on a combined basis, approximately $864.9 million, or 13.2%, of the Company’s consolidated assets and approximately $427.6 million, or 32.3% of the Company’s consolidated net revenues as of and for the year ended December 31,2021.

Accordingly, our audit did not include the internal control over financial reporting at the Acquired Companies.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at the Tropicana Las Vegas Hotel and Casino, Inc., which was acquired on September 26, 2022, whose financial statements constitute approximately 5.2%, of the Company’s total consolidated assets and approximately 1.1% of the Company’s consolidated net revenues as of and for the year ended December 31, 2022.

Accordingly, our audit did not include the internal control over financial reporting at the Tropicana Las Vegas Hotel and Casino, Inc.

Basis for Opinion

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A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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/s/ Deloitte & Touche LLP

Stamford, Connecticut

New York, New York

March 1, 2023

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item will be contained in our Definitive Proxy Statement on Schedule 14A for our Annual Meeting of Stockholders to be held on May 17, 2022 (the “2022 Proxy Statement”) under the captions “Directors and Nominees for Director,” “Directors and Executive Officers of the Registrant,” “Delinquent Section 16(a) Reports,” and “Committees of the Board of Directors—Audit Committee” and is incorporated herein by this reference.

The information required by this item will be contained in our Definitive Proxy Statement on Schedule 14A for our Annual Meeting of Stockholders to be held on May 17, 2023 (the “2023 Proxy Statement”) and is incorporated herein by this reference.

EXECUTIVE COMPENSATION

The information required by this item will be contained in the 2022 Proxy Statement under the captions “Non-employee Director Compensation,” “Executive Compensation”, “Compensation Discussion and Analysis”, “Executive Compensation Tables,” “Potential Payments Upon Termination or Change-in-Control,” “CEO Pay Ratio,” “Risk Oversight,” “Compensation Risk,” “Compensation Committee Interlocks and Insider Participation” and “Report of the Compensation Committee” and is incorporated herein by this reference.

The information required by this item will be contained in the 2023 Proxy Statement and is incorporated herein by this reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be contained in the 2022 Proxy Statement under the caption “Stock Ownership of Certain Beneficial Owners and Management”, and is incorporated herein by this reference.

The information required by this item will be contained in the 2023 Proxy Statement and is incorporated herein by this reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated herein by reference to our 2022 Proxy Statement under the caption “Certain Relationships and Related Transactions.”

The information required by this item will be contained in the 2023 Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated herein by reference to our 2022 Proxy Statement under the caption “Ratification of the Appointment of Independent Registered Public Accounting Firm.”

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The information required by this item will be contained in the 2023 Proxy Statement and is incorporated herein by reference.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(2) Documents filed as a part of this Annual Report on Form 10-K.

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Financial Statement Schedules .

Schedule II - Valuation and Qualifying Accounts for the Years Ended December 31, 2021, 2020 and 2019 is included in our consolidated financial statements included in Item 8.

All other schedules are omitted because they are not applicable.

All schedules have been omitted because they are either not required or the information required is included in our consolidated financial statements or the notes thereto included in Item 8 hereof.

The exhibits filed as part of this Annual Report on Form 10-K are listed in the Exhibit Index immediately following “Item 16.

38 unchanged sentences

001-38850) filed on October 7, 2021)

4.4* Description of Registrant’s Securities

4.4* Second Supplemental Indenture, dated as of April 13, 2022, among the guarantors party thereto and U.S.

Bank Trust Company, National Association, as trustee

4.5* Third Supplemental Indenture, dated as of December 30, 2022, among the guarantors party thereto and U.S.

Bank Trust Company, National Association, as trustee

Number Description of Exhibit

4.6 Description of Registrant’s Securities (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K (File No.

001-38850) filed on March 1, 2022)

4.7 Form of Warrant (incorporated by reference to Exhibit 4.6 to the Company’s Annual Report on Form 10-K (File No.

2 unchanged sentences

001-38850) filed on March 10, 2021)

Number Description of Exhibit

10.1 License Agreement, dated May 15, 2003, by and between Hard Rock Hotel Licensing, Inc., Premier Entertainment Biloxi LLC, and Premier Entertainment, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-4/A (File No.

25 unchanged sentences

333-228973) filed on January 25, 2019)

Number Description of Exhibit

10.11 Sixth Amendment to Master Video Lottery Terminal Contract, dated May 3, 2017, by and between the Division of Lotteries of the Rhode Island Department of Revenue (f/k/a the Division of Lotteries of the Rhode Island Department of Administration) and UTGR, Inc.

4 unchanged sentences

333-228973) filed on January 25, 2019)

Number Description of Exhibit

10.13 Eighth Amendment to Master Video Lottery Terminal Contract, dated February 17, 2022, by and between the Division of Lotteries of the Rhode Island Department of Revenue (f/k/a the Division of Lotteries of the Rhode Island Department of Administration) and UTGR, Inc.

14 unchanged sentences

333-228973) filed on January 25, 2019)

Number Description of Exhibit

10.21 Sixth Amendment to Master Video Lottery Terminal Contract, dated March 12, 2018, by and among the Division of Lotteries of the Rhode Island Department of Revenue (f/k/a the Division of Lotteries of the Rhode Island Department of Administration), Premier Entertainment II, LLC, d/b/a Newport Grand (assignee of Newport Grand, LLC (f/k/a Newport Grand Jai Alai, LLC)) and Twin-River Tiverton, LLC (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-4/A (File No.

2 unchanged sentences

333-228973) filed on January 25, 2019)

Number Description of Exhibit

10.23 Assignment, Assumption and Amendment of Master Video Lottery Terminal Contract, dated September 13, 2018, by and between Premier Entertainment II, LLC and Twin River-Tiverton LLC (incorporated by reference to Exhibit 10.22 to the Company’s Registration Statement on Form S-4/A (File No.

23 unchanged sentences

001-38850) filed on March 13, 2020)

Number Description of Exhibit

10.34** Employment Agreement, effective as of March 29, 2016, by and between Twin River Management Group, Inc.

8 unchanged sentences

001-38850) filed on March 10, 2021)

Number Description of Exhibit

10.37** Employment Agreement, effective as of January 1, 2019, by and between Twin River Worldwide Holdings, Inc.

and Stephen H.

Capp (incorporated by reference to Exhibit 10.32 to the Company’s Registration Statement on Form S-4/A (File No.

333-228973) filed on January 25, 2019)

10.38** Amendment to Employment Agreement, effective February 23, 2021, by and between Bally’s Corporation and Stephen H.

Capp (incorporated by reference to Exhibit 10.39 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No.

001-38850) filed on March 10, 2021)

10.37** Amendment No.

3 to Employment Agreement, dated February 13, 2023, by and between Bally’s Corporation and George Papanier (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No.

001-38850) filed on February 13, 2023)

10.38** Separation Agreement and Release, dated March 11, 2022 by and between Bally’s Corporation and Stephen Capp (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No.

001-38850) filed March 14, 2022)

10.39** Employment Agreement, dated March 11, 2022, by and between Bally’s Corporation and Robert Lavan (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No.

001-38850) filed March 14, 2022)

10.40** Employment Agreement, effective July 10, 2013, by and between Twin River Management Group, Inc.

1 unchanged sentence

001-38850) filed on March 13, 2020)

10.40** Employment Agreement, effective May 1, 2019, by and between Twin River Worldwide Holdings, Inc.

and Marc Crisafulli (incorporated by reference to Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No.

001-38850) filed on March 10, 2021)

10.41** Amendment No.

1 to Employment Agreement, effective February 21, 2019, by and between Twin River Worldwide Holdings, Inc.

and Marc Crisafulli (incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No.

001-38850) filed on March 10, 2021)

10.42** Employment Agreement Amendment, effective March 15, 2021, by and between Bally’s Corporation and Marc Crisafulli (incorporated by reference to Exhibit 10.41 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (File No.

001-38850) filed on May 10, 2021)

10.41** Form of Lee Fenton Service Agreement, effective October 1, 2021 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No.

001-38850) filed on October 7, 2021)

10.44** * Form of Robeson Reeves Service Agreement, effective October 1, 2021

10.42** Form of Robeson Reeves Service Agreement, effective October 1, 2021 (incorporated by reference to Exhibit 10.44 to the Company’s Annual Report on Form 10-K (File No.

001-38850) filed on March 1, 2022

10.43** * Amendment No.

1 to Service Agreement, dated June 1, 2022, by and between Bally’s Corporation and Robeson Reeves

10.44** Amendment No.

2 to Service Agreement, dated February 13, 2023, by and between Bally’s Corporation and Robeson Reeves (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No.

001-38850) filed on February 13, 2023)

10.45** * Form of Kim Barker Lee Employment Agreement, effective December 7, 2022

10.46** Separation Agreement and Release, dated February 13, 2023, by and between Bally’s Corporation and Lee Fenton (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No.

001-38850) filed February 13, 2023)

10.47 Credit Agreement, dated October 1, 2021, among Bally’s Corporation, the subsidiary guarantors party thereto, the lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File 001-38850) filed on October 7, 2021)

Number Description of Exhibit

10.48 Amended and Restated Regulatory Agreement, dated February 17, 2022, by and among the Rhode Island Department of Business Regulation, the Division of Lotteries of the Rhode Island Department of Revenue, Bally’s Corporation, Twin River Management Group, Inc., UTGR, Inc.

and Twin River-Tiverton, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File 001-38850) filed on February 24, 2022)

10.47** * Bally’s Corporation 2021 Equity Incentive Plan - Performance Unit Award Agreement

10.48** * Bally’s Corporation 2021 Equity Incentive Plan - Restricted Stock Unit Award Agreement

10.49** Bally’s Corporation 2021 Equity Incentive Plan - Performance Unit Award Agreement (incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K (File No.

001-38850) filed on March 1, 2022

10.50** Bally’s Corporation 2021 Equity Incentive Plan - Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K (File No.

001-38850) filed on March 1, 2022

21.1* Schedule of Subsidiaries

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99.1* Description of Government Regulations

Number Description of Exhibit

101.INS Inline XBRL Instance Document - the instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document

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BALLY’S CORPORATION

/s/ Stephen H.

Executive Vice President and Chief Financial Officer

/s/ ROBERT M.

Chief Financial Officer

(Principal Financial and Accounting Officer)

Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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Fenton (Principal Executive Officer)

/s/ Stephen H.

Capp Executive Vice President and Chief Financial Officer March 1, 2022

Capp (Principal Financial and Accounting Officer)

/s/ ROBERT M.

LAVAN Chief Financial Officer March 1, 2023

Lavan (Principal Financial and Accounting Officer)

/s/ SOOHYUNG KIM Chairman March 1, 2023

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Terrence Downey

/s/ TRACY HARRIS Director March 1, 2023

/s/ GEORGE T.

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ROLLINS Director March 1, 2023

Ryan Director March 1, 2022

WILSON Director March 1, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures