What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-03 · 310 added, 262 removed, 914 unchanged (38% of the section changed)

43 unchanged sentences

Additional paid-in-capital 1,407,118 1,400,479

Treasury stock, at cost, no shares outstanding as of March 31, 2024 and December 31, 2023

Treasury stock, at cost, no shares outstanding as of June 30, 2024 and December 31, 2023

Accumulated deficit ( 790,005 ) ( 555,895 )

8 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Gaming $ 524,751 $ 493,296 $ 1,040,808 $ 980,191

8 unchanged sentences

Total operating costs and expenses 616,084 600,224 1,308,521 822,212

(Loss) income from operations ( 73,955 ) 376,732

Income (loss) from operations 5,573 5,982 ( 68,382 ) 382,714

Other (expense) income:

3 unchanged sentences

(Loss) income before income taxes ( 61,697 ) ( 54,300 ) ( 204,229 ) 261,778

Provision for income taxes 31,382 137,742

(Benefit) provision for income taxes ( 1,501 ) ( 28,649 ) 29,881 109,093

Net (loss) income $ ( 60,196 ) $ ( 25,651 ) $ ( 234,110 ) $ 152,685

5 unchanged sentences

BALLY’S CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited)

(In thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net (loss) income $ ( 60,196 ) $ ( 25,651 ) $ ( 234,110 ) $ 152,685

21 unchanged sentences

Balance as of March 31, 2024 40,483,375 $ 405 $ 1,402,384 $ — $ ( 729,809 ) $ ( 223,603 ) $ 428 $ 449,805

Issuance of restricted stock and other stock awards 135,981 1 262 — — — — 263

Share-based compensation — — 4,472 — — — — 4,472

Other comprehensive loss — — — — — ( 793 ) — ( 793 )

Net loss — — — — ( 60,196 ) — — ( 60,196 )

Balance as of June 30, 2024 40,619,356 $ 406 $ 1,407,118 $ — $ ( 790,005 ) $ ( 224,396 ) $ 428 $ 393,551

Common Stock Additional

10 unchanged sentences

Balance as of March 31, 2023 45,767,764 $ 457 $ 1,605,087 $ — $ ( 340,793 ) $ ( 243,567 ) $ 428 $ 1,021,612

Issuance of restricted stock and other stock awards 125,842 1 ( 495 ) 529 — — — 35

Share-based compensation — — 6,290 — — — — 6,290

Retirement of treasury shares — ( 7 ) ( 25,279 ) 10,176 14,805 — — ( 305 )

Share repurchases ( 748,502 ) — — ( 10,705 ) — — — ( 10,705 )

Issuance of MKF penny warrants — — 7,371 — — — — 7,371

Penny warrants exercised 377,253 4 — — — — — 4

Settlement of consideration to SportCaller 103,656 1 1,883 — — — — 1,884

Other comprehensive income — — — — — 38,625 — 38,625

Net loss — — — — ( 25,651 ) — — ( 25,651 )

Balance as of June 30, 2023 45,626,013 $ 456 $ 1,594,857 $ — $ ( 351,639 ) $ ( 204,942 ) $ 428 $ 1,039,160

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2024 2023

1 unchanged sentence

Net (loss) income $ ( 234,110 ) $ 152,685

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization 238,528 153,748

1 unchanged sentence

Share-based compensation 7,530 12,330

Impairment charges 12,757 9,653

Amortization of debt discount and debt issuance costs 5,781 5,563

7 unchanged sentences

Foreign exchange (gain) loss ( 3,799 ) 5,947

Proceeds from interest rate contracts 4,399 —

Other operating activities 2,277 1,041

Changes in operating assets and liabilities ( 40,227 ) 34,111

Net cash used in operating activities ( 7,854 ) ( 16,112 )

Net cash provided by operating activities 39,699 64,050

Cash flows from investing activities:

1 unchanged sentence

Proceeds from sale-leaseback — 411,000

Proceeds from net investment hedges 2,051 —

Capital expenditures ( 63,762 ) ( 119,546 )

17 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2024 2023

8 unchanged sentences

Investment in RI Joint Venture — 17,832

March 31, December 31,

June 30, December 31,

Reconciliation of cash and cash equivalents and restricted cash:

73 unchanged sentences

The Company records its share of net income or loss within “Other non-operating income, net” in the condensed consolidated statements of operations.

For the three months ended March 31, 2024 and 2023, the Company recorded a gain on equity method investments of $ 0.6 million and $ 2.1 million, respectively.

For the three months ended June 30, 2024 and 2023, the Company recorded income from equity method investments of $ 0.2 million and $ 1.0 million, respectively, and for the six months ended June 30, 2024 and 2023, the Company recorded income from equity method investments of $ 0.8 million and $ 3.1 million, respectively.

Variable Interest Entities

11 unchanged sentences

As a result, the Company consolidates all of the assets, liabilities and results of operations of Breckenridge and its subsidiaries in the accompanying condensed consolidated financial statements.

As of March 31, 2024 and December 31, 2023, Breckenridge had total assets of $ 154.9 million and $ 161.3 million, respectively, and total liabilities of $ 85.5 million and $ 87.7 million, respectively.

Breckenridge had revenues of $ 61.9 million and $ 84.0 million for the three months ended March 31, 2024 and 2023, respectively.

The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

The Company performs this analysis on an ongoing basis.

As of June 30, 2024 and December 31, 2023, Breckenridge had total assets of $ 147.2 million and $ 161.3 million, respectively, and total liabilities of $ 78.2 million and $ 87.7 million, respectively.

Breckenridge had revenues of $ 46.5 million and $ 76.5 million for the three months ended June 30, 2024 and 2023, respectively, and $ 108.4 million and $ 160.5 million for the six months ended June 30, 2024 and 2023, respectively.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company performs this analysis on an ongoing basis.

Cash and Cash Equivalents and Restricted Cash

3 unchanged sentences

Accounts receivable, net consists of the following:

March 31, December 31,

June 30, December 31,

(in thousands) 2024 2023

13 unchanged sentences

The Company will then pay the new bill to the intermediary institutions, inclusive of any embedded premium, which the Company records as “Interest expense, net,” within three months or less.

Amounts outstanding under these deferred payable arrangements were $ 41.9 million as of March 31, 2024 and are included in Accrued and other current liabilities on the condensed consolidated balance sheets.

For the three months ended March 31, 2024, the Company incurred $ 0.8 million of interest expense under these arrangements.

There was no interest expense incurred under these arrangements for the three months ended March 31, 2023.

During the three and six months ended June 30, 2024, the Company borrowed $60.1 million and $102.3 million, respectively, under these deferred payable arrangements and during the three months ended June 30, 2024 repaid $41.5 million.

Amounts outstanding under these deferred payable arrangements were $ 60.2 million as of June 30, 2024 and are included in “Accrued and other current liabilities” on the condensed consolidated balance sheets.

For the three and six months ended June 30, 2024, the Company incurred $ 1.4 million and $ 2.2 million of interest expense, respectively, under these arrangements.

These arrangements were not utilized by the Company during the three and six months ended June 30, 2023.

Gaming Expenses

Gaming expenses include, among other things, payroll costs and expenses associated with the operation of VLTs, slots and table games, including gaming taxes payable to jurisdictions in which the Company operates outside of Rhode Island and Delaware, and marketing costs directly associated with the Company’s iGaming products and services.

These marketing expenses are included within Gaming expenses in the condensed consolidated statements of operations and were $ 46.2 million and $ 45.9 million for the three months ended March 31, 2024 and 2023, respectively.

These marketing expenses are included within Gaming expenses in the condensed consolidated statements of operations and were $ 47.0 million and $ 47.8 million for the three months ended June 30, 2024 and 2023, respectively, and $ 93.2 million and $ 93.7 million for the six months ended June 30, 2024 and 2023, respectively.

Gaming expenses also include racing expenses comprised of payroll costs, off track betting (“OTB”) commissions and other expenses associated with the operation of live racing and simulcasting.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Advertising Expense

The Company expenses advertising costs as incurred.

For the three months ended March 31, 2024 and 2023, advertising expense was $ 5.6 million and $ 5.4 million, respectively.

For the three months ended June 30, 2024 and 2023, advertising expense was $ 4.0 million and $ 3.2 million, respectively, and for the six months ended June 30, 2024 and 2023, advertising expense was $ 9.6 million and $ 8.6 million, respectively.

Advertising costs are included in “General and administrative” on the condensed consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Share-Based Compensation

The Company recognized total share-based compensation expense of $ 3.1 million and $ 6.0 million for the three months ended March 31, 2024 and 2023, respectively.

The total income tax benefit for share-based compensation arrangements was $ 0.8 million and $ 1.6 million for the three months ended March 31, 2024 and 2023, respectively.

The Company recognized total share-based compensation expense of $ 4.5 million and $ 6.3 million for the three months ended June 30, 2024 and 2023, respectively, and $ 7.5 million and $ 12.3 million for the six months ended June 30, 2024 and 2023, respectively.

The total income tax benefit for share-based compensation arrangements was $ 1.2 million and $ 1.7 million for the three months ended June 30, 2024 and 2023, respectively, and $ 2.0 million and $ 3.2 million for the six months ended June 30, 2024 and 2023, respectively.

Strategic Partnership - Sinclair Broadcast Group

5 unchanged sentences

The total intangible asset (“Commercial rights intangible asset”) represents the present value of the naming rights fees and other consideration, including the fair value of the warrants and options, and an estimate of the tax-sharing payments, each explained below.

The Commercial rights intangible asset, net of accumulated amortization, was $ 218.2 million and $ 225.9 million as of March 31, 2024 and December 31, 2023, respectively.

Amortization was $ 7.8 million and $ 7.7 million for the three months ended March 31, 2024 and 2023, respectively.

The Commercial rights intangible asset, net of accumulated amortization, was $ 210.4 million and $ 225.9 million as of June 30, 2024 and December 31, 2023, respectively.

Amortization was $ 7.8 million and $ 7.7 million for the three months ended June 30, 2024 and 2023, respectively, and $ 15.6 million and $ 15.5 million for the six months ended June 30, 2024 and 2023, respectively.

Refer to Note 9 “ Goodwill and Intangible Assets ” for further information.

The present value of the naming rights fees was recorded as part of intangible assets, with a corresponding liability, which will be accreted through interest expense.

The present value of the naming rights fees was recorded as part of intangible assets, with a corresponding liability, which was accreted through interest expense.

As of December 31, 2023, the total value of the liability was $ 57.7 million, with $ 8.0 million recorded within “Accrued and other current liabilities” related to the short-term portion of the liability, and $ 49.7 million related to the long-term portion of the liability reflected as “Commercial rights liability” in the condensed consolidated balance sheets.

Accretion expense reported in “Interest expense, net” in our condensed consolidated statements of operations was $ 1.1 million for the three months ended March 31, 2023.

Accretion expense reported in “Interest expense, net” in our condensed consolidated statements of operations was $ 1.1 million and $ 2.2 million for the three and six months ended June 30, 2023, respectively.

In the first quarter of 2024, the Company’s obligation to pay Diamond for the naming rights terminated upon the bankruptcy court’s approval of certain settlement terms, which the court approved on March 1, 2024.

Refer to Note 17 “ Commitments and Contingencies ” for further information.

Under the Framework Agreement, the Company issued to Sinclair (i) an immediately exercisable warrant to purchase up to 4,915,726 shares of the Company at an exercise price of $ 0.01 per share (“the Penny Warrants”), (ii) a warrant to purchase up to a maximum of 3,279,337 additional shares of the Company at a price of $ 0.01 per share subject to the achievement of various performance metrics (the “Performance Warrants”), and (iii) an option to purchase up to 1,639,669 additional shares in four tranches with purchase prices ranging from $ 30.00 to $ 45.00 per share, exercisable over a seven-year period beginning on the fourth anniversary of the November 18, 2020 closing (the “Options”).

Under the Framework Agreement, the Company issued to SBG Gaming, LLC, a designated subsidiary of Sinclair (“SBG”) (i) an immediately exercisable warrant to purchase up to 4,915,726 shares of the Company at an exercise price of $ 0.01 per share (“the Penny Warrants”), (ii) a warrant to purchase up to a maximum of 3,279,337 additional shares of the Company at a price of $ 0.01 per share subject to the achievement of various performance metrics (the “Performance Warrants”), and (iii) an option to purchase up to 1,639,669 additional shares in four tranches with purchase prices ranging from $ 30.00 to $ 45.00 per share, exercisable over a seven-year period beginning on the fourth anniversary of the November 18, 2020 closing (the “Options”).

The exercise and purchase prices and the number of shares issuable upon exercise of the warrants and options are subject to customary anti-dilution adjustments.

Refer to Note 20 “Subsequent Events” for further information.

The Penny Warrants and Options are equity classified instruments under ASC 815.

The fair value of the Penny Warrants approximates the fair value of the underlying shares and was $ 150.4 million on November 18, 2020 at issuance, and was recorded to “Additional paid-in-capital” in the condensed consolidated balance sheets, with an offset to the Commercial rights intangible asset.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Performance Warrants are accounted for as a derivative liability because the underlying performance metrics represent an adjustment to the settlement amount that is not indexed to the Company’s own stock and thus equity classification is precluded under ASC 815.

2 unchanged sentences

Changes in the estimate of the tax benefit to be realized and tax rates in effect at the time, among other changes, are treated as an adjustment to the intangible asset.

The liability for these obligations was $ 17.7 million and $ 19.1 million as of March 31, 2024 and December 31, 2023, respectively, and is reflected in Commercial rights liabilities within our condensed consolidated balance sheets.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The liability for these obligations was $ 17.0 million and $ 19.1 million as of June 30, 2024 and December 31, 2023, respectively, and is reflected in “Commercial rights liabilities” within our condensed consolidated balance sheets.

Provision for Income Taxes

During the three months ended March 31, 2024 and 2023, the Company recorded a provision for income tax of $ 31.4 million, at an effective year to date tax rate of ( 22.0 )% and a provision for income tax of $ 137.7 million, at an effective year to date tax rate of 43.6 %, respectively.

During the six months ended June 30, 2024 and 2023, the Company recorded a provision for income tax of $ 29.9 million, at an effective year to date tax rate of ( 14.6 )% and a provision for income tax of $ 109.1 million, at an effective year to date tax rate of 41.7 %, respectively.

The 2024 year to date effective tax rate differed from the US federal statutory tax rate of 21%, creating a provision for income tax on the Company’s Loss before income taxes, largely due to an increase in the valuation allowance, coupled with a tax liability for foreign discrete items.

2 unchanged sentences

General and Administrative Expense

Amounts included in General and administrative for the three months ended March 31, 2024 and 2023 were as follows:

Amounts included in General and administrative for the three and six months ended June 30, 2024 and 2023 were as follows:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

2 unchanged sentences

Restructuring 376 3,440 18,989 20,262

Impairment charges (1)

12,757 9,653 12,757 9,653

Total general and administrative $ 252,419 $ 249,957 $ 500,855 $ 501,565

__________________________________

(1) Includes impairment charges on long-lived assets within the International Interactive segment in the second quarter of 2024 and impairment charges related to assets held-for-sale within the North America Interactive segment in 2023.

Other Non-Operating Income, Net

Amounts included in Other non-operating income, net for the three months ended March 31, 2024 and 2023 were as follows:

Amounts included in Other non-operating income, net for the three and six months ended June 30, 2024 and 2023 were as follows:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

Change in value of commercial rights liabilities $ 6,317 $ 7,558 $ 6,317 $ 7,291

Net gain on equity method investments 555 2,100

Net income from equity method investments 234 990 789 3,090

Gain on extinguishment of debt — — — 4,044

2 unchanged sentences

Total other non-operating income, net $ 6,930 $ 6,811 $ 11,484 $ 9,421

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

7 unchanged sentences

The Company is currently in the process of evaluating the impact of this amendment on its condensed consolidated financial statements and related disclosures.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

In November 2023, the FASB issued ASU No.

13 unchanged sentences

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers , which requires companies to recognize revenue in a way that depicts the transfer of promised goods or services.

In addition, the standard requires more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers , which requires the revenue to be recognized when a performance obligation is satisfied by transferring the control of promised goods or services and is measured at the transaction price or the amount of consideration that the Company expects to receive through satisfaction of the identified performance obligations.

The Company generates revenue from four principal sources:

(1) gaming (which includes retail gaming, online gaming, sports betting and racing), (2) hotel, (3) food and beverage and (4) retail, entertainment and other.

The Company determines revenue recognition through the following steps:

• Identify the contract, or contracts, with the customer;

• Identify the performance obligations in the contract;

• Determine the transaction price;

• Allocate the transaction price to performance obligations in the contract;

• Recognize revenue when or as the Company satisfies performance obligations by transferring the promised goods or services.

The amount of revenue recognized by the Company is measured at the transaction price or the amount of consideration that the Company expects to receive through satisfaction of the identified performance obligations.

Retail gaming, online gaming and sports betting revenue, each as described below, contain two performance obligations.

Retail gaming transactions have an obligation to honor the outcome of a wager and to pay out an amount equal to the stated odds, including the return of the initial wager, if the customer receives a winning hand.

These elements of honoring the outcome of the hand of play and generating a payout are considered one performance obligation.

Sales tax and other taxes collected on behalf of governmental authorities are accounted for on a net basis and are not included in revenue or operating expenses.

Gaming Revenue

Performance Obligations

Retail gaming service contracts involving our land-based casinos, each have an obligation to honor the outcome of a wager and to pay out an amount equal to the stated odds, including the return of the initial wager, if the customer receives a winning hand.

These elements of honoring the outcome of the hand of play and generating a payout are considered one performance obligation, with an additional performance obligation for those customers earning incentives under the Company’s player loyalty program.

Online gaming and sports betting represent a single performance obligation for the Company to operate contests or games and award prizes or payouts to users based on results of the arrangement.

Revenue is recognized at the conclusion of each contest, wager or wagering game hand.

Incentives can be used across online gaming products.

The Company allocates a portion of the transaction price to certain customer incentives that create material future customer rights and are a separate performance obligation.

In addition, in the event of a multi-stage contest, the Company will allocate transaction price ratably from contest start to the contest’s final stage.

Racing revenue is earned through advance deposit wagering which consists of patrons wagering through an advance deposit account.

Each wagering contract contains a single performance obligation.

The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered.

The transaction price for racing operations, inclusive of live racing events conducted at the Company’s racing facilities, is the commission received from the pari-mutuel pool less contractual fees and obligations primarily consisting of purse funding requirements, simulcasting fees, tote fees and certain pari-mutuel taxes that are directly related to the racing operations.

The transaction price for hotel, food, beverage, retail, entertainment and other is the net amount collected from the customer for such goods and services.

Hotel, food, beverage, retail, entertainment and other services have been determined to be separate, stand-alone performance obligations and revenue is recognized as the good or service is transferred at the point in time of the transaction.

Additionally, the use of incentives across the online gaming products create future customer rights and are a separate performance obligation.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following contains a description of each of the Company’s revenue streams:

Gaming Revenue

Retail Gaming

The Company recognizes retail gaming revenue as the net win from gaming activities, which is the difference between gaming inflows and outflows, not the total amount wagered.

Progressive jackpots are estimated and recognized as revenue at the time the obligation to pay the jackpot is established.

Gaming revenues are recognized net of certain cash and free play incentives.

Gaming services contracts have two performance obligations for those customers earning incentives under the Company’s player loyalty programs and a single performance obligation for customers who do not participate in the programs.

Racing revenue is earned through advance deposit wagering, which consists of patrons wagering through an advance deposit account.

Each wagering contract contains a single performance obligation.

Transaction Price

The Company applies a practical expedient to account for its gaming contracts on a portfolio basis as such wagers have similar characteristics and the Company reasonably expects the impact on the consolidated financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from the application of an individual wagering contract.

For purposes of allocating the transaction price in a wagering contract between the wagering performance obligation and the obligation associated with incentives earned under loyalty programs, the Company allocates an amount to the loyalty program contract liability based on the stand-alone selling price of the incentive earned for a hotel room stay, food and beverage or other amenity.

The transaction price for a retail gaming, online gaming or sports betting wagering contract is the difference between wins and losses, not the total amount wagered.

In addition, in the event of a multi-stage contest, the Company will allocate transaction price ratably from contest start to the contest’s final stage.

The transaction price for racing operations, inclusive of live racing events conducted at the Company’s racing facilities, is the commission received from the pari-mutuel pool less contractual fees and obligations, primarily consisting of purse funding requirements, simulcasting fees, tote fees and certain pari-mutuel taxes that are directly related to the racing operations.

The performance obligation related to loyalty program incentives are deferred and recognized as revenue upon redemption by the customer.

The amount associated with gaming wagers is recognized at the point the wager occurs, as it is settled immediately.

Gaming revenue includes the share of VLT revenue for Bally’s Twin River and Bally’s Tiverton, in each case, as determined by each property’s respective master VLT contracts with the State of Rhode Island.

Bally’s Twin River is entitled to a 28.85 % share of VLT revenue on the initial 3,002 units and a 26.00 % share on VLT revenue generated from units in excess of 3,002 units.

Bally’s Tiverton is entitled to receive a percentage of VLT revenue that is equivalent to the percentage received by Bally’s Twin River.

From July 1, 2021 through December 31, 2022, Bally’s Twin River and Bally’s Tiverton were entitled to an additional 7.00 % share of revenue, as the Technology Provider, on VLTs owned by the Company.

Beginning on January 1, 2023, the Company contributed all of its VLT assets to the RI Joint Venture and the RI Joint Venture, as the sole Technology Provider, is now entitled to that additional 7.00% of VLT revenue.

Gaming revenue also includes Bally’s Twin River’s and Bally’s Tiverton’s share of table games revenue.

Bally’s Twin River and Bally’s Tiverton each were entitled to an 83.5 % share of table games revenue generated as of March 31, 2024 and 2023.

Revenue is recognized when the wager is settled, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment.

The Company records revenue from its Rhode Island operations on a net basis which is the percentage share of VLT and table games revenue received as the Company acts as an agent in operating the gaming services on behalf of the State of Rhode Island.

Gaming revenue also includes Bally’s Dover’s share of revenue as determined under the Delaware State Lottery Code from the date of its acquisition.

Bally’s Dover is authorized to conduct video lottery, sports wagering, table game and internet gaming operations as one of three “Licensed Agents” under the Delaware State Lottery Code.

Licensing, administration and control of gaming operations in Delaware is under the Delaware State Lottery Office and Delaware’s Department of Safety and Homeland Security, Division of Gaming Enforcement.

As of March 31, 2024 and 2023, Bally’s Dover was entitled to an approximate 42 % share of VLT revenue and 80 % share of table games revenue.

Revenue is recognized when the wager is complete, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment.

The Company records revenue from its Delaware operations on a net basis, which is the percentage share of VLT and table games revenue received, as the Company acts as an agent in operating the gaming services on behalf of the State of Delaware.

Gaming revenue includes casino revenue of the Company’s other properties which is the aggregate net difference between gaming wins and losses, with deferred revenue recognized for prepaid deposits by customers prior to play, for chips outstanding and “ticket-in, ticket-out” coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots.

Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the number of credits played, are charged to revenue as the amount of the progressive jackpots increase.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Online Gaming

The Company’s online gaming operations, similar to land-based casinos, generates revenue from player wagers net of payouts and incentives awarded to players.

The revenue is earned from operating online bingo and casino websites, which consists of the difference between total amounts wagered by players less winnings payable to players, bonuses allocated and jackpot contributions.

Revenue Recognition

The allocated revenue for retail gaming wagers is recognized when the wagering occurs as all such wagers settle immediately.

Online gaming revenue is recognized at the point in time when the player completes a gaming session and payout occurs.

There is no significant degree of uncertainty involved in quantifying the amount of gaming revenue earned, including bonuses, jackpot contributions and loyalty points.

Bonuses, jackpot contributions and loyalty points are measured at fair value at each reporting date.

Sports Betting

Sports betting involves a player wagering money on an outcome or series of outcomes.

If a player wins the wager, the Company pays the player a pre-determined amount known as fixed odds.

Sports betting revenue is generated through built-in theoretical margins in each sports wagering opportunity offered to players.

Revenue is recognized as total wagers net of payouts made and incentives awarded to players.

The Company has entered into several multi-year agreements with third-party operators for online sports betting and iGaming market access in several jurisdictions from which the Company has received or expects to receive one-time, up front market access fees in cash or equity securities (specific to one operator agreement) and certain other fees in cash generally based on a percentage of the gross gaming revenue generated by the operator, with certain annual minimum guarantees due to the Company.

The one-time market access fees received have been recorded as deferred revenue and will be recognized as gaming revenue ratably over the respective contract terms, beginning with the commencement of operations of each respective agreement.

The Company recognized commissions in certain states from online sports betting and iGaming which are included in gaming revenue for the three months ended March 31, 2024 and 2023.

Deferred revenue associated with third-party operators for online sports betting and iGaming market access was $ 3.6 million and $ 3.7 million as of March 31, 2024 and December 31, 2023, respectively, and is included in “Accrued and other current liabilities” and “Other long-term liabilities” in the condensed consolidated balance sheets.

Racing revenue includes several of our casinos and resorts’ share of wagering from live racing and the import of simulcast signals.

Racing revenue is recognized upon completion of the wager based upon an established take-out percentage.

The Company functions as an agent to the pari-mutuel pool.

Therefore, fees and obligations related to the Company’s share of purse funding, simulcasting fees, tote fees, pari-mutuel taxes, and other fees directly related to the Company’s racing operations are reported on a net basis and included as a reduction to racing revenue.

If a player wins the wager, the Company pays the player a pre-determined amount known as fixed odds, and its revenue is recognized as total wagers net of payouts made and incentives awarded to players.

Racing revenue includes several of our casinos and resorts’ share of wagering from live racing and the import of simulcast signals, and is recognized upon completion of the wager based upon an established take-out percentage.

The estimated retail value related to goods and services provided to customers without charge or upon redemption under the Company’s player loyalty programs included in departmental revenues, and therefore reducing gaming revenues, are as follows for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

Hotel $ 20,435 $ 24,123 $ 40,906 $ 46,558

Food and beverage 20,302 19,823 40,515 39,297

Retail, entertainment and other 2,442 2,420 4,870 5,011

$ 43,179 $ 46,366 $ 86,291 $ 90,866

Non-gaming Revenue

Non-gaming revenue consists of hotel, food, beverage, retail, entertainment and other revenue.

Performance Obligations

Hotel, food and beverage, and retail, entertainment and other services have been determined to be separate, stand-alone performance obligations and revenue is recognized as the good or service is transferred at the point in time of the transaction.

Transaction Price

The transaction price for hotel, food and beverage, and retail, entertainment and other, is the net amount collected from the customer for such goods and services.

The estimated standalone selling price of hotel rooms is determined based on observable prices.

The standalone selling price of these goods and services are determined based upon the actual retail prices charged to customers for those items.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Revenue Recognition

Hotel revenue is recognized when the customer obtains control through occupancy of the room over their stay at the hotel.

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Food, beverage and retail revenues are recognized at the time the goods are sold from Company-operated outlets.

The estimated standalone selling price of hotel rooms is determined based on observable prices.

The standalone selling price of food, beverage, retail, entertainment and other goods and services are determined based upon the actual retail prices charged to customers for those items.

Other revenue includes cancellation fees for hotel and meeting space services, which are recognized upon cancellation by the customer, and golf revenues from the Company’s operations of Bally’s Golf Links, which are recognized at the time of sale.

Additionally, other revenue includes market access and business-to-business service revenue generated by the International Interactive and North America Interactive reportable segments, which is recognized at the time the goods are sold or the service is provided, and are included in Non-gaming revenue within our condensed consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The estimated retail value related to goods and services provided to guests without charge or upon redemption under the Company’s player loyalty programs included in departmental revenues, and therefore reducing gaming revenues, are as follows for the three months ended March 31, 2024 and 2023:

Three Months Ended

(in thousands) 2024 2023

The following tables provide a disaggregation of revenue by segment (in thousands):

Three Months Ended June 30, 2024 Casinos & Resorts International Interactive North America Interactive Total

Gaming $ 255,545 $ 227,149 $ 42,057 $ 524,751

Hotel 35,264 — — 35,264

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Retail, entertainment and other 19,119 2,247 7,153 28,519

$ 43,120 $ 44,500

Sales tax and other taxes collected on behalf of governmental authorities are accounted for on a net basis and are not included in revenue or operating expenses.

The following tables provide a disaggregation of revenue by segment (in thousands):

Three Months Ended March 31, 2024 Casinos & Resorts International Interactive North America Interactive Total

Total non-gaming revenue 87,506 2,247 7,153 96,906

Total revenue $ 343,051 $ 229,396 $ 49,210 $ 621,657

Three Months Ended June 30, 2023

Gaming $ 231,018 $ 243,167 $ 19,111 $ 493,296

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Total revenue $ 333,162 $ 247,774 $ 25,270 $ 606,206

Three Months Ended March 31, 2023

Six Months Ended June 30, 2024

Gaming $ 505,963 $ 458,416 $ 76,429 $ 1,040,808

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Total revenue $ 685,380 $ 464,079 $ 90,680 $ 1,240,139

Six Months Ended June 30, 2023

Gaming $ 464,125 $ 480,348 $ 35,718 $ 980,191

Hotel 98,723 — — 98,723

Food and beverage 68,832 — — 68,832

Retail, entertainment and other 30,268 12,998 13,914 57,180

Total non-gaming revenue 197,823 12,998 13,914 224,735

Total revenue $ 661,948 $ 493,346 $ 49,632 $ 1,204,926

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Contract Assets and Contract Related Liabilities

The Company’s receivables related to contracts with customers are primarily comprised of marker balances and other amounts due from gaming activities, amounts due for hotel stays and amounts due from tracks and OTB locations.

The Company’s receivables related to contracts with customers were $ 35.5 million and $ 38.5 million as of March 31, 2024 and December 31, 2023, respectively.

The Company’s receivables related to contracts with customers are primarily comprised of marker balances, interactive platform business-to-business service receivables, other amounts due from gaming activities, amounts due for hotel stays and amounts due from tracks and OTB locations.

The Company’s receivables related to contracts with customers were $ 33.5 million and $ 38.5 million as of June 30, 2024 and December 31, 2023, respectively.

The Company has the following liabilities related to contracts with customers:

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therefore, the majority of these incentives outstanding at the end of a period will either be redeemed or expire within the next 12 months.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Advance deposits are typically for future banquet events, hotel room reservations and interactive player deposits.

The banquet and hotel reservation deposits are usually received weeks or months in advance of the event or hotel stay.

Advance deposits are typically interactive player deposits and customer deposits for future banquet events, hotel room reservations, and gift cards.

The Company holds restricted cash for interactive player deposits and records a corresponding withdrawal liability.

The banquet and hotel reservation deposits are usually received weeks or months in advance of the event or hotel stay.

Unpaid wagers include the Company’s outstanding chip liability and unpaid slot, pari-mutuel and sports betting tickets.

Liabilities related to contracts with customers as of March 31, 2024 and December 31, 2023 were as follows:

March 31, December 31,

Liabilities related to contracts with customers as of June 30, 2024 and December 31, 2023 were as follows:

June 30, December 31,

(in thousands) 2024 2023

Loyalty programs $ 15,349 $ 16,803

Advanced deposits from customers $ 28,464 $ 29,052

Loyalty programs 14,775 16,803

Unpaid wagers 11,704 20,481

Total $ 54,943 $ 66,336

The Company recognized $ 7.6 million and $ 5.9 million of revenue related to loyalty program redemptions for the three months ended March 31, 2024 and 2023, respectively.

The Company recognized $ 7.8 million and $ 9.9 million of revenue related to loyalty program redemptions for the three months ended June 30, 2024 and 2023, respectively, and $ 15.5 million and $ 17.6 million of revenue related to loyalty program redemptions for the six months ended June 30, 2024 and 2023, respectively.

BUSINESS COMBINATIONS

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This acquisition continues the Company’s strategic objective of developing a diversified portfolio within its Casinos & Resorts segment.

Total purchase consideration also included contingent consideration valued at $ 58.6 million, the fair value at acquisition date, under GAAP, of expected cash payments totaling up to $ 125 million to the seller, based upon future events, which are uncertain.

The contingent consideration was recorded at fair value, using discounted cash flow analyses, and will be remeasured quarterly, with fair value adjustments recognized in earnings, until the contingencies are resolved.

Total purchase consideration also includes contingent consideration valued at $ 58.6 million, which is the fair value, under GAAP, of expected cash payments totaling up to $ 125 million to the seller, based upon future events, which are uncertain.

The contingent consideration was recorded at fair value, using discounted cash flow analyses with level 3 inputs, and is remeasured quarterly, with fair value adjustments recognized in earnings, until the contingencies are resolved.

Inputs to this valuation approach include the Company’s estimated probabilities of achieving the conditions for payment, expected terms between 1.5 and 3 Years, and discount rates between 7.2 % and 7.8 %.

The settlement of the contingent consideration liabilities will be due to the seller in the event the license agreement is extended or if the Company is successful in its bid for a casino license.

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the Casinos & Resorts acquisition as of March 31, 2024:

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the Casinos & Resorts acquisition as of June 30, 2024:

Bally’s Golf Links

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(1) Bally’s Golf Links’ intangible assets include a concessionaire license of $ 6.5 million, which is being amortized over its estimated useful life of approximately 12 years.

(2) The Company recorded adjustments to the preliminary purchase price allocation during the three months ended March 31, 2024 which decreased Goodwill and the total purchase price by $ 0.2 million.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(2) The Company recorded adjustments to the preliminary purchase price allocation during the six months ended June 30, 2024 which decreased Goodwill and the total purchase price by $ 0.2 million.

Goodwill recognized is deductible for local tax purposes and has been assigned as of the acquisition date to the Company’s Casinos & Resorts reportable segment, which includes the reporting unit expected to benefit from the synergies of the acquisitions.

Qualitative factors that contribute to the recognition of goodwill include expected synergies from integrating the business into the Company’s casino portfolio and future development of its omni-channel strategy.

The Company incurred $ 0.2 million of acquisition costs related to the above Casinos & Resorts acquisition during the three months ended March 31, 2024.

There were no acquisition costs related to the above Casinos & Resorts acquisition during the three months ended March 31, 2023.

The Company incurred $ 0.1 million and $ 0.3 million of acquisition costs related to the above Casinos & Resorts acquisition during the three and six months ended June 30, 2024, respectively.

There were no acquisition costs related to the above Casinos & Resorts acquisition during the three and six months ended June 30, 2023.

These costs are included within “General and administrative” of the condensed consolidated statements of operations.

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(1) Casino Secret intangible assets include player relationships and trade names of $ 26.0 million and $ 3.5 million, respectively, which are both being amortized on a straight-line basis over their estimated useful lives of approximately 7 years.

(2) The Company did not record adjustments to the preliminary purchase price allocation during the three months ended March 31, 2024.

(2) The Company did not record adjustments to the preliminary purchase price allocation during the six months ended June 30, 2024.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Total goodwill recorded in connection with the above acquisition was $ 18.4 million, and is not deductible for local tax purposes.

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The goodwill of the acquisition has been assigned, as of the acquisition date, to the Company’s International Interactive reportable segment.

The Company incurred $ 1.2 million of acquisition costs related to the above International Interactive acquisition during the three months ended March 31, 2023.

There were no acquisition costs related to the International Interactive acquisition during the three months ended March 31, 2024.

The Company incurred $ 1.2 million of acquisition costs related to the above International Interactive acquisition during the six months ended June 30, 2023.

There were no acquisition costs related to the International Interactive acquisition during the three months ended June 30, 2023 or three and six months ended June 30, 2024.

These costs are included within “General and administrative” of the condensed consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of March 31, 2024 and December 31, 2023, prepaid expenses and other current assets was comprised of the following:

March 31, December 31,

As of June 30, 2024 and December 31, 2023, prepaid expenses and other current assets was comprised of the following:

June 30, December 31,

(in thousands) 2024 2023

Services and license agreements $ 45,777 $ 32,466

Short term derivative assets 11,031 9,530

Due from payment service providers 10,606 12,662

Prepaid marketing 12,406 8,685

Prepaid insurance 7,497 12,181

Short term derivative assets 11,191 9,530

Gaming taxes and licenses 10,518 9,309

Prepaid insurance 10,321 12,181

Due from payment service providers 9,025 12,662

Sales tax 5,429 7,565

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PROPERTY AND EQUIPMENT

As of March 31, 2024 and December 31, 2023, property and equipment was comprised of the following:

March 31, December 31,

As of June 30, 2024 and December 31, 2023, property and equipment was comprised of the following:

June 30, December 31,

(in thousands) 2024 2023

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Property and equipment, net $ 1,124,546 $ 1,174,888

Depreciation expense relating to property and equipment was $ 99.5 million for the three months ended March 31, 2024, and $ 18.7 million for the three months ended March 31, 2023.

Depreciation expense during the three months ended March 31, 2024 included $ 80.1 million of accelerated depreciation related to the closure of the Tropicana Las Vegas property.

Refer to Note 13 “ Restructuring Expens e ” for further information.

During the three months ended March 31, 2024 and March 31, 2023, the Company recorded capitalized interest of $ 1.8 million and $ 2.9 million, respectively.

Bally’s Chicago

A wholly-owned indirect subsidiary of the Company, Bally’s Chicago Operating Company, LLC entered into a Lease Termination and Short Term License Agreement with Chicago Tribune Company, LLC (“Tribune”), effective March 31, 2023, which, among other things, provides that the Company will have possession of 777 West Chicago Avenue, Chicago, Illinois 60610 on or before July 5, 2024, subject to $ 150 million in payments by the Company to Tribune payable in full upon Tribune vacating the site on or prior to July 5, 2024 (the “Payment”).

$ 10 million of the Payment was paid upon execution of the Lease Termination and Short Term License Agreement and $ 90 million of the Payment was paid during the third quarter of 2023.

The balance Payment amount of $ 50 million is secured by cash-collateralized letters of credit, issued by Citizens Bank.

Cash collaterals are reported as restricted cash as of March 31, 2024.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company recorded the present value of the remaining payments of $ 48.7 million within “Accrued and other current liabilities” with an offsetting increase to “Property and equipment, net” within the condensed consolidated balance sheets as of March 31, 2024.

Depreciation expense relating to property and equipment was $ 19.8 million and $ 19.0 million for the three months ended June 30, 2024 and 2023, respectively, and $ 119.3 million and $ 37.6 million for the six months ended June 30, 2024 and 2023, respectively.

Depreciation expense during the six months ended June 30, 2024 included $ 80.1 million of accelerated depreciation related to the closure of the Tropicana Las Vegas property on April 2, 2024.

Refer to Note 13 “ Restructuring Expense ” for further information.

The Company recorded capitalized interest of $ 2.1 million during each of the three months ended June 30, 2024 and 2023, and $ 3.9 million and $ 5.0 million during the six months ended June 30, 2024 and 2023, respectively.

Bally’s Chicago

A wholly-owned indirect subsidiary of the Company, Bally’s Chicago Operating Company, LLC entered into a Lease Termination and Short Term License Agreement with Chicago Tribune Company, LLC (“Tribune”), effective March 31, 2023, which, among other things, provided that the Company will have possession of 777 West Chicago Avenue, Chicago, Illinois 60610 on or before July 5, 2024, subject to $ 150 million in payments by the Company to Tribune payable in full upon Tribune vacating the site on or prior to July 5, 2024 (the “Payment”).

$ 10 million of the Payment was paid upon execution of the Lease Termination and Short Term License Agreement and $ 90 million of the Payment was paid during the third quarter of 2023.

The balance Payment amount of $ 50 million was secured by cash-collateralized letters of credit, issued by Citizens Bank.

Cash collaterals are reported as restricted cash as of June 30, 2024.

The Company paid the remaining $ 50 million on July 9, 2024 and gained possession of the property per the agreement with Tribune.

The Company recorded the present value of the remaining payments of $ 49.7 million within “Accrued and other current liabilities” with an offsetting increase to “Property and equipment, net” within the condensed consolidated balance sheets as of June 30, 2024.

GOODWILL AND INTANGIBLE ASSETS

The change in carrying value of goodwill by reportable segment for the three months ended March 31, 2024 is as follows (in thousands):

Casinos & Resorts International Interactive North America Interactive Total

Goodwill as of December 31, 2023 (1)

$ 313,493 $ 1,586,590 $ 35,720 $ 1,935,803

Effect of foreign exchange — ( 20,647 ) ( 95 ) ( 20,742 )

Purchase accounting adjustments on prior year business acquisition ( 208 ) — — ( 208 )

Goodwill as of March 31, 2024 (1)

$ 313,285 $ 1,565,943 $ 35,625 $ 1,914,853

__________________________________

(1) Amounts are shown net of accumulated goodwill impairment charges of $ 5.4 million and $ 140.4 million for Casinos & Resorts and North America Interactive, respectively.

The change in intangible assets, net for the three months ended March 31, 2024 is as follows (in thousands):

The change in intangible assets, net for the six months ended June 30, 2024 is as follows (in thousands):

Intangible assets, net as of December 31, 2023

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Accumulated amortization ( 119,240 )

Intangible assets, net as of March 31, 2024

Intangible assets, net as of June 30, 2024

BALLY’S CORPORATION

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The Company’s identifiable intangible assets consist of the following:

March 31, 2024

(in thousands, except years) Gross Carrying Amount Accumulated

June 30, 2024

(in thousands) Gross Carrying Amount Accumulated

Amortization Net

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(1) Commercial rights intangible asset in connection with the Framework Agreement.

Refer to Note 2 “ S ummary of S ig nificant Accounting Policies ” for further information.

Refer to Note 2 “ Summary of Significant Accounting Policies ” for further information.

December 31, 2023

(in thousands, except years) Gross Carrying Amount Accumulated

(in thousands) Gross Carrying Amount Accumulated

Amortization Net

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Amortization of intangible assets was approximately $ 60.3 million and $ 55.9 million for the three months ended March 31, 2024 and 2023, respectively.

The following table reflects the remaining amortization expense associated with the finite-lived intangible assets as of March 31, 2024:

Amortization of intangible assets was approximately $ 59.0 million and $ 60.2 million for the three months ended June 30, 2024 and 2023, respectively, and $ 119.2 million and $ 116.1 million for the six months ended June 30, 2024 and 2023, respectively.

The following table reflects the remaining amortization expense associated with the finite-lived intangible assets as of June 30, 2024:

(in thousands)

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Refer to Note 11 “ Fair Value Measurements ” and Note 16 “ Stockholders’ Equity ” for further information.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following tables summarize the Company’s net investment hedges as of March 31, 2024 and December 31, 2023 (in thousands):

The following tables summarize the Company’s net investment hedges as of June 30, 2024 and December 31, 2023 (in thousands):

Net Investment Hedges Notional Sold Notional Purchased

1 unchanged sentence

Cross currency swaps £ 546,759 $ 700,000

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Cash Flow Hedges

4 unchanged sentences

Refer to Note 11 “ Fair Value Measurements ” and Note 16 “ Stockholders’ Equity ” for further information.

The following table summarizes the Company’s cash flow hedges as of March 31, 2024 and December 31, 2023 (in thousands):

The following table summarizes the Company’s cash flow hedges as of June 30, 2024 and December 31, 2023 (in thousands):

Cash Flow Hedges Notional Amount Index Cap Floor (1)

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(1) Weighted average rate.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

FAIR VALUE MEASUREMENTS

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Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

March 31, 2024

June 30, 2024

(in thousands) Balance Sheet Location Level 1 Level 2 Level 3

52 unchanged sentences

$ 44,703 $ 56,745 $ 4,082

Change in fair value ( 6,317 ) 1,040 4

Ending as of June 30, 2024

$ 38,386 $ 57,785 $ 4,086

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands) Sinclair Performance Warrants Contingent Consideration Convertible Loans

5 unchanged sentences

$ 37,254 $ 9,461 $ 10,838

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The gains (losses) recognized in the condensed consolidated statements of operations for derivative instruments during the three months ended March 31, 2024 and 2023 are as follows:

Additions in the period (acquisition fair value) — — 500

Reductions in the period — ( 9,292 ) —

Change in fair value ( 7,558 ) ( 169 ) 136

Ending as of June 30, 2023

$ 29,696 $ — $ 11,474

The gains (losses) recognized in the condensed consolidated statements of operations for derivative instruments during the three and six months ended June 30, 2024 and 2023 are as follows:

Condensed Consolidated Statements of Operations Location Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

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The fair value is recorded within “Commercial rights liabilities” of the condensed consolidated balance sheets.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Contingent Consideration

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During the second quarter of 2023, the Company, in satisfaction of contingencies related to the respective acquisition agreements, settled the remaining contingent consideration of $ 9.3 million, comprised of 386,926 immediately exercisable penny warrants, 103,656 shares of Bally’s Corporation common stock and a de minimis payment in cash.

In connection with the acquisition of Bally’s Golf Links on September 12, 2023, the Company recorded contingent consideration, which was valued at $ 56.7 million as of March 31, 2024.

In connection with the acquisition of Bally’s Golf Links on September 12, 2023, the Company recorded contingent consideration, which was valued at $ 57.8 million as of June 30, 2024.

Refer to Note 6 “ Business Combinations ” for further information.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Convertible Loans

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Refer to Note 14 “ Long-Term Debt ” for further information.

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands) Carrying Amount Fair Value Carrying Amount Fair Value

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ACCRUED AND OTHER CURRENT LIABILITIES

As of March 31, 2024 and December 31, 2023, accrued and other current liabilities consisted of the following:

(in thousands) March 31,

As of June 30, 2024 and December 31, 2023, accrued and other current liabilities consisted of the following:

(in thousands) June 30,

2024 December 31,

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As a result of the closure, the Company incurred restructuring charges representing employee related severance costs and accelerated depreciation of certain property and equipment.

The components of restructuring charges by segment for the three months ended March 31, 2024 are summarized as follows:

(in thousands) Casinos & Resorts International Interactive North America Interactive Other Total

Severance and employee related benefits (1)

The components of restructuring charges by segment for the three and six months ended June 30, 2024 and 2023 are summarized as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Severance and employee related benefits (1)

Casinos & Resorts $ 348 $ — $ 20,003 —

International Interactive 3 1,595 55 10,927

North America Interactive — 1,789 ( 1,479 ) 7,647

Other 25 56 410 1,688

Total severance and employee related benefits 376 3,440 18,989 20,262

Accelerated depreciation expense (2)

80,117 — — — 80,117

Total restructuring charges $ 376 3,440 99,106 20,262

1 unchanged sentence

(1) Included within “General and administrative” of the condensed consolidated statements of operations.

(2) Included within “Depreciation and amortization” of the condensed consolidated statements of operations.

The components of restructuring charges by segment for the three months ended March 31, 2023 are summarized as follows:

(in thousands) International Interactive North America Interactive Other Total

Severance and employee related benefits (1)

$ 9,332 $ 5,858 $ 1,632 $ 16,822

__________________________________

(1) Included within “General and administrative” of the condensed consolidated statements of operations.

(2) Included within “Depreciation and amortization” of the Casinos & Resorts reportable segment within the condensed consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The changes in the Company’s restructuring related liabilities for the three months ended March 31, 2024 and 2023 is as follows:

The changes in the Company’s restructuring related liabilities for the six months ended June 30, 2024 is as follows:

(in thousands)

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Effect of foreign exchange ( 849 )

Balance as of March 31, 2024

The restructuring liability as of March 31, 2024 and December 31, 2023 is included within “Accrued and other current liabilities” on the condensed consolidated balance sheets.

Balance as of June 30, 2024

The restructuring liability as of June 30, 2024 and December 31, 2023 is included within “Accrued and other current liabilities” on the condensed consolidated balance sheets.

LONG-TERM DEBT

As of March 31, 2024 and December 31, 2023, long-term debt consisted of the following:

(in thousands) March 31,

As of June 30, 2024 and December 31, 2023, long-term debt consisted of the following:

(in thousands) June 30,

2024 December 31,

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

During the three months ended March 31, 2023, the Company repurchased and retired $ 15.0 million of the 2031 Notes at a weighted average price of 70.80 % of the principal.

During the six months ended June 30, 2023, the Company repurchased and retired $ 15.0 million of the 2031 Notes at a weighted average price of 70.80 % of the principal.

In connection with the repurchase of these 2031 Notes, the Company recorded a gain on extinguishment of debt of $ 4.0 million recorded within “Other non-operating income, net” in the condensed consolidated statements of operations.

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The Revolving Credit Facility contains a financial covenant regarding a maximum first lien net leverage ratio that applies when borrowings under the Revolving Credit Facility exceed 30 % of the total revolving commitment.

As of March 31, 2024, the Company was in compliance with all such covenants.

As of June 30, 2024, the Company was in compliance with all such covenants.

In an effort to mitigate the interest rate risk associated with the Company’s variable rate credit facilities, the Company entered into a series of interest rate and cross currency swap derivative transactions during the second half of 2023.

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Discount rates used to determine the present value of the lease payments are based on the Company’s incremental borrowing rate commensurate with the term of the lease.

The Company had total operating lease liabilities of $ 1.19 billion and $ 1.20 billion as of March 31, 2024 and December 31, 2023, respectively, and right of use assets of $ 1.14 billion and $ 1.16 billion as of March 31, 2024 and December 31, 2023, respectively, which were included in the condensed consolidated balance sheets.

As of March 31, 2024, the Company’s Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities, Bally’s Black Hawk, Bally’s Tiverton and Hard Rock Biloxi properties are leased under the terms of a master lease agreement (the “Master Lease”) with GLPI.

The Company had total operating lease liabilities of $ 1.18 billion and $ 1.20 billion as of June 30, 2024 and December 31, 2023, respectively, and right of use assets of $ 1.13 billion and $ 1.16 billion as of June 30, 2024 and December 31, 2023, respectively, which were included in the condensed consolidated balance sheets.

As of June 30, 2024, the Company’s Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities, Bally’s Black Hawk, Bally’s Tiverton and Hard Rock Biloxi properties are leased under the terms of a master lease agreement (the “Master Lease”) with GLPI.

All GLPI leases are accounted for as operating leases within the provisions of ASC 842, Leases (“ASC 842”), over the lease term or until a re-assessment event occurs.

The Master Lease has an initial term of 15 years and includes four , five-year options to renew and requires combined minimum annual payments of $ 100.5 million, subject to minimum 1% annual escalation or greater escalation dependent on CPI.

The renewal options are not reasonably certain of exercise as of March 31, 2024.

On January 3, 2023, the Company completed a transaction with GLP Capital, L.P., the operating partnership of GLPI, related to the land and real estate assets of Bally’s Tiverton and Hard Rock Biloxi for total consideration of $ 625.4 million.

The renewal options are not reasonably certain of exercise as of June 30, 2024.

On January 3, 2023, the Company completed a transaction with GLP Capital, L.P (“GLP”)., an affiliate of GLPI, related to the land and real estate assets of Bally’s Tiverton and Hard Rock Biloxi for total consideration of $ 625.4 million.

The transaction was structured as a tax-free capital contribution and a substantial portion of the proceeds was used to reduce the Company’s debt.

These properties were added to the Master Lease, increasing minimum annual payments by $ 48.5 million.

During the three months ended March 31, 2023, the Company recorded a gain of $ 374.2 million representing the difference in the transaction price and the derecognition of assets.

During the six months ended June 30, 2023, the Company recorded a gain of $ 374.3 million representing the difference in the transaction price and the derecognition of assets.

This gain is reflected as “Gain from sale-leaseback, net” in the condensed consolidated statements of operations.

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This lease has an initial term of 50 years (with a maximum term of 99 years with renewal options) at annual rent of $ 10.5 million, subject to minimum 1% annual escalation or greater escalation dependent on CPI.

The renewal options are not reasonably certain of exercise as of March 31, 2024.

Components of lease expense, included within “General and administrative” in the condensed consolidated statements of operations, for operating leases during the three months ended March 31, 2024 and 2023 are as follows:

The renewal options are not reasonably certain of exercise as of June 30, 2024.

Components of lease expense, included within “General and administrative” in the condensed consolidated statements of operations, for operating leases during the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Supplemental cash flow and other information related to operating leases for the three months ended March 31, 2024 and 2023 are as follows:

Supplemental cash flow and other information related to operating leases for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

1 unchanged sentence

Right of use assets obtained in exchange for operating lease liabilities $ 631 $ 7,094 $ 631 $ 403,659

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Weighted average remaining lease term 17.3 years 17.6 years

Weighted average discount rate 7.5 % 7.5 %

As of March 31, 2024, future minimum lease payments under noncancelable operating leases are as follows:

(in thousands) March 31, 2024

As of June 30, 2024, future minimum lease payments under noncancelable operating leases are as follows:

(in thousands) June 30, 2024

Remaining 2024 $ 72,174

7 unchanged sentences

The lease commenced November 18, 2022 and has a 99-year term followed by ten separate 20-year renewals at the Company’s option.

The Company recorded land within “Property and equipment, net” of $ 200.0 million with a corresponding liability within ”Long-term portion of financing obligation” of $ 200.0 million on its condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023.

All lease payments are recorded as interest expense and there is no reduction to the financing obligation over the lease term.

Bally’s Chicago made cash payments, and recorded corresponding interest expense of $ 4.6 million and $ 4.3 million during the three months ended March 31, 2024 and 2023, respectively.

Bally’s Chicago made cash payments, and recorded corresponding interest expense of $ 4.7 million and $ 4.5 million during the three months ended June 30, 2024 and 2023, respectively, and $ 9.3 million and $ 8.7 million during the six months ended June 30, 2024 and 2023, respectively.

The Company leases its hotel rooms to patrons and records the corresponding lessor revenue in Non-gaming revenue within our condensed consolidated statements of operations.

The Company had lessor revenues related to the rental of hotel rooms of $ 41.1 million and $ 47.3 million for the three months ended March 31, 2024 and 2023, respectively.

The Company had lessor revenues related to the rental of hotel rooms of $ 35.3 million and $ 51.4 million for the three months ended June 30, 2024 and 2023, respectively, and $ 76.4 million and $ 98.7 million for the six months ended June 30, 2024 and 2023, respectively.

Hotel leasing arrangements vary in duration, but are short-term in nature.

7 unchanged sentences

There is no fixed time period to complete share repurchases.

As of March 31, 2024 and December 31, 2023, $ 95.5 million was available for use under the capital return program.

There was no share repurchase activity during the three months ended March 31, 2024.

Total share repurchase activity during the three months ended 2023 was as follows:

As of June 30, 2024 and December 31, 2023, $ 95.5 million was available for use under the capital return program.

There was no share repurchase activity during the three and six months ended June 30, 2024.

Total share repurchase activity during the three and six months ended 2023 was as follows:

(in thousands, except share and per share data) Three Months Ended

March 31, 2023

June 30, 2023 Six Months Ended

June 30, 2023

Number of common shares repurchased 748,502 1,774,845

1 unchanged sentence

Average cost per share, including commissions $ 14.30 $ 17.16

All shares repurchased during the three months ended March 31, 2023 were transferred to treasury stock and all 1,026,343 shares were retired during that same quarter.

The shares were returned to the status of authorized but unissued shares.

As of March 31, 2024, there were no shares remaining in treasury.

There were no cash dividends paid during the three months ended March 31, 2024 and 2023.

All shares repurchased during the three and six months ended June 30, 2023 were transferred to treasury stock and 712,122 and 1,738,465 shares were retired during those same periods, respectively.

The shares were returned to the status of authorized but unissued.

As of June 30, 2024, there were no shares remaining in treasury.

There were no cash dividends paid during the three and six months ended June 30, 2024 and 2023.

Common Stock Offering

8 unchanged sentences

The Company has authorized the issuance of up to 10 million shares of $ 0.01 par value preferred stock.

As of March 31, 2024 and December 31, 2023, no shares of preferred stock have been issued.

As of June 30, 2024 and December 31, 2023, no shares of preferred stock have been issued.

BALLY’S CORPORATION

1 unchanged sentence

Shares Outstanding

As of March 31, 2024, the Company had 40,483,375 common shares issued and outstanding.

As of June 30, 2024, the Company had 40,619,356 common shares issued and outstanding.

The Company issued warrants, options and other contingent consideration in acquisitions and strategic partnerships that are expected to result in the issuance of common shares in future periods resulting from the exercise of warrants and options or the achievement of certain performance targets.

9 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

The following tables reflect the changes in accumulated other comprehensive loss by component for the three months ended March 31, 2024 and 2023, respectively:

The following tables reflect the changes in accumulated other comprehensive loss by component for the six months ended June 30, 2024 and 2023, respectively:

(in thousands) Foreign Currency Translation Adjustment Benefit Plans Cash Flow Hedges (1)

Net Investment Hedges Total

Accumulated other comprehensive income (loss) at December 31, 2023

Accumulated other comprehensive (loss) income at December 31, 2023

$ ( 177,203 ) $ 886 $ ( 11,246 ) $ ( 21,995 ) $ ( 209,558 )

2 unchanged sentences

Tax effect — — ( 6,074 ) 4,193 ( 1,881 )

Accumulated other comprehensive income (loss) at March 31, 2024

Accumulated other comprehensive (loss) income at June 30, 2024

$ ( 223,882 ) $ 886 $ 3,341 $ ( 4,741 ) $ ( 224,396 )

__________________________________

(1) As of March 31, 2024, approximately $ 7.3 million of existing gains and losses are estimated to be reclassified into earnings within the next 12 months.

(1) As of June 30, 2024, approximately $ 7.3 million of existing gains and losses are estimated to be reclassified into earnings within the next 12 months.

(in thousands) Foreign Currency Translation Adjustment Benefit Plans Total

Accumulated other comprehensive income (loss) at December 31, 2022

Accumulated other comprehensive (loss) income at December 31, 2022

$ ( 295,984 ) $ 344 $ ( 295,640 )

Other comprehensive income 90,698 — 90,698

Accumulated other comprehensive income (loss) at March 31, 2023

Accumulated other comprehensive (loss) income at June 30, 2023

$ ( 205,286 ) $ 344 $ ( 204,942 )

22 unchanged sentences

From 2021 through 2025, no less than $ 35 million must be invested in the hotel and no less than $ 65 million must be invested in non-hotel projects.

As of March 31, 2024, approximately $ 5.5 million of the commitment to invest in non-hotel projects remains.

As of June 30, 2024, all investment requirements had been met and no commitment to invest in non-hotel projects remains.

Bally’s Twin River - Pursuant to the terms of the Regulatory Agreement in Rhode Island, the Company is committed to invest $ 100 million in its Rhode Island properties over the term of the master contract through June 30, 2043, including an expansion and the addition of new amenities at Bally’s Twin River.

As of March 31, 2024, approximately $ 57.4 million of the commitment remains.

As of June 30, 2024, approximately $ 55.9 million of the commitment remains.

Bally’s Chicago - Pursuant to the Host Community Agreement with the City of Chicago, the Company’s indirect subsidiary is required to spend at least $ 1.34 billion on the design, construction and outfitting of the temporary casino and the permanent resort and casino.

7 unchanged sentences

Bally’s Chicago Casino Fees

Under the Illinois Gambling Act, the Company must pay various gaming license fees to the Illinois Gaming Board in connection with the Company’s casino operations.

These fees include:

(i) a $250,000 land based gaming fee to operate the casino on land prior to commencing operations, (ii) a $250,000 license fee prior to receiving an owners license and gambling operations commence, (iii) gaming position fees equal to the minimum initial fee of $30,000 per gaming position to be paid within 30 days of issuance of an owners license or Temporary Operating Permit (“TOP”), (iv) a $15 million reconciliation fee upon issuance of a TOP or an owners license, whichever is earlier, and (v) a reconciliation fee payment three years after the date operations commenced (in a temporary or permanent facility) in an amount equal to 75% of the adjusted gross receipt (“AGR”) for the most lucrative 12-month period of operations, minus the amount equal to the initial payment per gaming position paid.

On September 9, 2023, operations commenced at the Company’s Bally’s Chicago temporary casino, which triggered $ 135.3 million in such required gaming license fees to be paid to the Illinois Gaming Board, satisfying the Company’s commitment to pay fees (i), (ii), (iii) and (iv).

Under the Illinois Gambling Act, the Company will be responsible to pay the Illinois Gaming Board a reconciliation fee payment three years after the date operations commenced (in a temporary or permanent facility) in an amount equal to 75% of the adjusted gross receipt (“AGR”) for the most lucrative 12-month period of operations, minus the amount equal to the initial payment per gaming position paid.

Sponsorship Commitments

As of March 31, 2024, the Company has entered into multiple sponsorship agreements with various professional sports leagues and teams.

As of June 30, 2024, the Company has entered into multiple sponsorship agreements with various professional sports leagues and teams.

These agreements commit a total of $ 139.0 million through 2037 and grant the Company rights to use official league marks for branding and promotions, among other benefits.

1 unchanged sentence

The Company has certain multi-year agreements with its various market access and content providers, as well as its online sports betting platform partners, that require the Company to pay variable fees based on revenue, with minimum annual guarantees.

As of March 31, 2024, the cumulative minimum obligation committed in these agreements is approximately $ 46.1 million through 2029.

As of June 30, 2024, the cumulative minimum obligation committed in these agreements is approximately $ 44.8 million through 2029.

SEGMENT REPORTING

2 unchanged sentences

The “Other” category includes interest expense for the Company and certain unallocated corporate operating expenses and other adjustments, including eliminations of transactions among segments to reconcile to the Company’s consolidated results including, among other expenses, share-based compensation, acquisition and other transaction costs and certain non-recurring charges.

The Company’s three reportable segments as of March 31, 2024 are:

The Company’s three reportable segments as of June 30, 2024 are:

Casinos & Resorts - Includes the Company’s 15 casino and resort properties, one horse racetrack and one golf course.

1 unchanged sentence

North America Interactive - A portfolio of sports betting, iGaming, and free-to-play gaming brands, and the North American operations of Gamesys.

As of March 31, 2024, the Company’s operations were predominately in the US, Europe and Asia with a less substantive footprint in other countries world-wide.

As of June 30, 2024, the Company’s operations were predominately in the US, Europe and Asia with a less substantive footprint in other countries world-wide.

For geographical reporting purposes, revenue generated outside of the US has been aggregated into the International Interactive reporting segment, and consists primarily of revenue from the UK and Japan.

Revenue generated from the UK and Japan represented approximately 26 % and 10 % of total revenue, respectively, for the three months ended March 31, 2024, and approximately 24 % and 12 %, respectively for the three months ended March 31, 2023.

Revenue generated from the UK and Japan represented approximately 28 % and 7 % of total revenue, respectively, for the three months ended June 30, 2024, approximately 26 % and 12 %, respectively for the three months ended June 30, 2023, approximately 27 % and 8 %, respectively for the six months ended June 30, 2024, and approximately 25 % and 12 %, respectively for the six months ended June 30, 2023.

The Company does not have any revenues from any individual customers that exceed 10% of total reported revenues.

2 unchanged sentences

Management believes segment Adjusted EBITDAR is representative of its ongoing business operations including its ability to service debt and to fund capital expenditures, acquisitions and operations, in addition to it being a commonly used measure of performance in the gaming industry and used by industry analysts to evaluate operations and operating performance.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following table sets forth revenue and Adjusted EBITDAR for the Company’s three reportable segments and reconciles Adjusted EBITDAR on a consolidated basis to net (loss) income.

The Other category is included in the following tables in order to reconcile the segment information to the Company’s condensed consolidated financial statements.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

9 unchanged sentences

Total 161,799 161,358 309,914 318,951

Operating income (costs) and (expense):

Operating (expense) income

Rent expense associated with triple net operating leases (2)

3 unchanged sentences

Restructuring ( 376 ) ( 3,440 ) ( 18,989 ) ( 20,262 )

Tropicana Las Vegas demolition costs ( 12,261 ) — ( 12,261 ) —

Share-based compensation ( 4,472 ) ( 6,290 ) ( 7,530 ) ( 12,330 )

Gain on sale-leaseback — 135 — 374,321

Impairment charges ( 12,757 ) ( 9,653 ) ( 12,757 ) ( 9,653 )

Other ( 4,722 ) ( 9,187 ) ( 6,934 ) ( 13,555 )

(Loss) income from operations ( 73,955 ) 376,732

Income (loss) from operations 5,573 5,982 ( 68,382 ) 382,714

Other (expense) income

12 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

6 unchanged sentences

__________________________________

(1) Includes $17.5 million related to our future Bally’s Chicago permanent facility.

(1) Includes $ 21.6 million and $ 39.1 million related to our future Bally’s Chicago permanent facility during the three and six months ended June 30, 2024, respectively.

Total assets are not regularly reviewed for each operating segment when assessing segment performance or allocating resources and accordingly, are not presented.

As of June 30, 2024 and December 31, 2023, carrying values of goodwill by reportable segment are as follows:

(in thousands) June 30, 2024 December 31, 2023

Casinos & Resorts (1)

$ 313,285 $ 313,493

International Interactive 1,561,449 1,586,590

North America Interactive (2)

35,582 35,720

Total $ 1,910,316 $ 1,935,803

__________________________________

(1) Net of accumulated goodwill impairment charges of $ 5.4 million.

(2) Net of accumulated goodwill impairment charges of $ 140.4 million.

EARNINGS (LOSS) PER SHARE

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

(in thousands, except per share data) 2024 2023 2024 2023

5 unchanged sentences

Diluted earnings per share $ ( 1.24 ) $ ( 0.48 ) $ ( 4.85 ) $ 2.80

There were 5,157,927 and 5,094,394 share-based awards that were considered anti-dilutive for the three months ended March 31, 2024 and 2023, respectively.

There were 4,951,558 and 5,193,897 share-based awards that were considered anti-dilutive for the three months ended June 30, 2024 and 2023, respectively, and 5,254,089 and 5,091,986 share-based awards that were considered anti-dilutive for the six months ended June 30, 2024 and 2023, respectively.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

On November 18, 2020, the Company issued Penny Warrants, Performance Warrants and Options which participate in dividends with the Company’s common stock subject to certain contingencies.

2 unchanged sentences

The Penny Warrants were considered exercisable for little to no consideration and are therefore included in basic shares outstanding at their issuance date.

For the three months ended March 31, 2024 and 2023, the shares underlying the Performance Warrants were anti-dilutive as certain contingencies were not met.

Refer to Note 2 “ S ummary of S igni ficant Accounting Policies ” for further information regarding the Framework Agreement.

For the three and six months ended June 30, 2024 and 2023, the shares underlying the Performance Warrants were anti-dilutive as certain contingencies were not met.

Refer to Note 2 “ Summary of Significant Accounting Policies ” for further information regarding the Framework Agreement.

SUBSEQUENT EVENTS

Construction and Financing Arrangement

On July 11, 2024, the Company entered into a Binding Term Sheet to form a strategic construction and financing arrangement with GLP, an affiliate of GLPI, which includes the funding to complete the construction of Bally’s Chicago’s permanent casino.

GLP has agreed to acquire the real estate underlying the Bally’s Chicago project, for which the Company is currently subject to a financing obligation with an unrelated party, referenced in Note 15 “Leases”.

GLP will amend the existing land lease through a new master lease agreement with Bally’s Chicago Operating Company, LLC (“Chicago MLA”).

The Chicago MLA will include annual rent of $ 20 million, subject to customary escalation provisions.

The Chicago MLA will also provide up to $ 940 million in construction financing, subject to conditions and approvals.

The Company will pay additional rent under the Chicago MLA based on a 8.5 % capitalization rate on funded amounts.

The initial lease term for the Chicago MLA is 15 years with renewal options to be agreed upon by the parties.

The Company will also sell and lease back from GLP its properties in Kansas City and Shreveport for $ 395 million, with initial annual rent of $ 32.2 million, subject to escalation.

In addition, the Company plans to sell and lease back its Bally’s Twin River property to GLP by the end of 2026 for $ 735 million, with initial annual rent of $ 58.8 million.

GLP has the right to call this transaction starting October 2026.

All such transactions are subject to required regulatory approvals.

Agreement and Plan of Merger

On July 25, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SG Parent LLC, a Delaware limited liability company (“Parent”), The Queen Casino & Entertainment, Inc., a Delaware corporation and affiliate of Parent (“Queen”), Epsilon Sub I, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub I”), Epsilon Sub II, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub II”, and together with the Company and Merger Sub I, the “Company Parties”), and, solely for purposes of specified provisions of the Merger Agreement, SG CQ Gaming LLC, a Delaware limited liability company (“SG Gaming” and together with Parent and Queen, the “Buyer Parties”).

The Merger Agreement provides, among other things and on the terms and subject to the conditions in the Merger Agreement, in connection with the closing of the transaction, (i) SG Gaming will contribute to the Company all shares of common stock of Queen that it owns (the “Queen Share Contribution”) in exchange for shares of common stock of the Company (“Company Common Stock”) based on a 2.45368905950 share exchange ratio, (ii) immediately thereafter, Merger Sub I will merge with and into the Company (the “Company Merger”), with the Company surviving the Company Merger and (iii) immediately thereafter, Merger Sub II will merge with and into Queen (the “Queen Merger,” and together with the Company Merger, the “Mergers”), with Queen surviving the Queen Merger as a direct, wholly owned subsidiary of the Company.

BALLY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The transaction is expected to close in the second calendar quarter of 2025, subject to the satisfaction of closing conditions contained in the Merger Agreement, including approval of the Company Merger by (a) the affirmative vote of the holders of a majority of all of the outstanding shares of Company Common Stock entitled to vote;

(b) the affirmative vote of the holders of a majority of the outstanding shares of Company Common Stock held by the unaffiliated stockholders of the Company entitled to vote;

(c) the expiration of any waiting period applicable to the consummation of the Queen Share Contribution or Mergers under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and (d) receipt of specified gaming approvals by the Company and Queen (as defined in the Merger Agreement ).

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “ Effective Time ”), each share of the Company’s Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of common stock owned by (i) the Company or any of its wholly owned subsidiaries, (ii) Parent or any of Parent’s affiliates, (iii) by holders exercising statutory appraisal rights;

(iv) by SG Gaming following the Queen Share Contribution;

or (v) by holders who have elected to have such shares remain issued and outstanding following the Company Merger (a “Rolling Share Election”)) will be converted into the right to receive cash consideration equal to $ 18.25 per share of common stock (the “ Per Share Price ”).

Each holder of shares of Company Common Stock (other than the Company or its subsidiaries) will have the option to make a Rolling Share Election.

The Merger Agreement contains customary representations, warranties and covenants of the Company Parties and the Buyer Parties, including, among others, covenants by each the Company and Queen relating (i) to conduct of their respective business prior to the closing of the Queen Share Contribution and the Mergers in the ordinary course during the period between the execution of the Merger Agreement and consummation of the Merger and (ii) not to engage in certain expressly enumerated transactions during such period.

Under the terms of the Merger Agreement, the Company is subject to a customary “no-shop” provision that restricts the Company and its representatives from soliciting an alternative acquisition proposal (as described in the Merger Agreement) from third parties or providing information to or participating in any discussions or negotiations with third parties regarding any alternative acquisition proposal.

However, prior to the receipt of the requisite approval of the holders of Company Common Stock, the “no-shop” provision permits the Company, under certain circumstances and in compliance with certain obligations set forth in the Merger Agreement, to provide non-public information and engage in discussions and negotiations with respect to an unsolicited alternative acquisition that would reasonably be expected to lead to a Superior Proposal (as defined in the Merger Agreement).

The Merger Agreement also contains certain termination rights for the Company and Parent, with a termination fee equal to $ 11,100,000 payable by the Company to Parent under certain circumstances and a termination fee equal to $ 22,200,000 in cash or stock payable by Parent to the Company under certain circumstances.

In addition, the Company or Parent may terminate the Merger Agreement if the Merger is not consummated by July 25, 2025.

The Merger Agreement, the Merger and the transactions contemplated thereby were (i) unanimously recommended by a special committee of the board of directors of the Company (the “Board”), consisting solely of disinterested members of the Board, on July 24, 2024 and (ii) approved by the disinterested members of the Board on July 24, 2025.

The foregoing descriptions of the Merger, the Merger Agreement, and the transactions contemplated thereby are not complete and are subject to and qualified in their entirety by the full text of the Merger Agreement, which is attached as an exhibit to, and described in, the Company’s Form 8-K filed with the SEC on July 25, 2024.

Concurrently with the execution of the Merger Agreement, the Company and Parent entered into support agreements with SRL (the “SG Support Agreement”), SBG (the “SBG Support Agreement”), and Noel Hayden (the “Hayden Support Agreement”), each dated as of July 25, 2024 (collectively, the “Support Agreements”), pursuant to which each of them agreed, among other things, to vote their shares of Company Common Stock to adopt and approve the Merger Agreement and the other transactions contemplated by the Merger Agreement and to make a Rolling Share Election with respect to all shares of Company Common Stock owned or acquired by them, if any, including via the exercise of outstanding options or warrants.

In addition, with respect to the SBG Support Agreement, the Company and SBG agreed that SBG would waive the right to receive the Per Share Price as the result of any exercise of performance warrants or options held by SBG.

The SBG Support Agreement provides also that, simultaneously with the consummation of the transactions contemplated by the Merger Agreement, SBG will deliver to the Company the options it previously acquired from the Company to purchase 1,639,669 shares of Company Common Stock at prices between $ 30.00 and $ 45.00 per share for cancellation and retirement and in exchange therefor, the Company will issue to SBG warrants to purchase 384,536 shares of Company Common Stock containing terms substantially similar to the terms set forth in certain warrants currently held by SBG.

The foregoing descriptions of the Support Agreements are not complete and are subject to and qualified in their entirety by reference to each of the SG Support Agreement, SBG Support Agreement and Hayden Support Agreement, each of which is attached as an exhibit to, and described in, the Company’s Form 8-K filed with the SEC on July 25, 2024.

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-Q

Item 1. Financial Statements