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Item 7. Management’s Discussion and Analysis

2025-03-17 compared with 2024-03-15 · 114 added, 123 removed, 262 unchanged (47% of the section changed)

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Executive Overview

During 2023, we continued to grow our business by actively pursuing new gaming opportunities and reinvesting in our existing operations.

In our Casinos & Resorts segment, we:

• announced a binding deal with the Oakland Athletics of Major League Baseball to site their new ballpark on a portion of our Bally’s Las Vegas property;

• opened our temporary casino at the Medinah Temple in Chicago, Illinois and are on track to break ground to develop a permanent flagship destination casino resort in downtown Chicago, Illinois;

• opened our property expansion at Bally’s Kansas City and Bally’s Twin River, which provides for enhanced amenities to improve the customer experience;

• we acquired Bally’s Golf Links at Ferry Point in the Bronx, New York.

In our International Interactive and North America Interactive segments, we:

• rolled out our new Bally Bet sportsbook app with our new partners, Kambi and White Hat Gaming in seven US states;

• launched iGaming app in Pennsylvania;

• launched Bally Casino, an iGaming app, and Bally Bet Sportsbook & Casino, our first combined casino and sportsbook app;

• anticipate launching a new iGaming app in Rhode Island following the legalization of iGaming in Rhode Island.

During 2024, we continued to expand our business by actively pursuing new gaming opportunities and strategically allocating capital to our growth initiatives and existing operations.

• In connection with our development plans for Bally’s Chicago, we secured a $940 million financing arrangement with GLPI for constructing our flagship casino in downtown Chicago, with construction slated for early 2025.

• The controlled demolition of the Tropicana Las Vegas hotel towers advanced our stadium construction plans and site redevelopment.

• We expanded our iGaming presence by launching the Bally Bet Casino app in Rhode Island and enhancing the Bally Bet sportsbook app’s reach in 13 US states and Ontario.

• During the fourth quarter of 2024, we successfully disposed of portions of our international interactive business in Asian and certain other international markets.

In addition, we transferred ownership of certain intellectual property used in the business into a purpose trust, which began receiving license fees under a new commercial license arrangement.

We also purchased a warrant representing a 19.99% fully diluted equity interest in the Carved-Out Business.

These steps continue to position us as a prominent, full-service, vertically integrated iGaming company, with physical casinos and online gaming solutions united under a single, leading brand.

Acquisitions and Development Projects

Our acquisitions and business development projects are summarized above in “ Our Strategy and Business Developments ” section above and in Note 6 “ Business Combinations ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K.

Business Development Projects

Our business development projects are summarized above in “Our Strategy and Business Developments” section above and in Note 7 “Business Combinations” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K.

Macroeconomic and Other Factors

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Results of Operations

In connection with the finalization of the financial close process for the year ended December 31, 2023, and subsequent to the publication of the Company’s unaudited Statements of Operations and Balance Sheet data included within its earnings press release on February 21, 2024, the Company recorded additional impairment charges of $18.1 million as it relates to its annual impairment test on indefinite-lived intangible assets, a balance sheet reclassification resulting in a $12.9 million increase to restricted cash from other current assets and, a $3.2 million net adjustment to the provision for income taxes reflecting the tax effect of these and other adjustments.

Amounts included in the audited financial statements in this Annual Report on Form 10-K reflect the effect of these adjustments and no other amounts presented in the earnings release have been revised.

The following table presents, for the periods indicated, certain revenue and income items:

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Total revenue $ 2,450.5 $ 2,449.1 $ 2,255.7

Income (loss) from operations 104.0 (293.0) 93.4

(Loss) income from operations (258.3) 104.0 (293.0)

Net loss (567.8) (187.5) (425.5)

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General and administrative 42.6 % 45.5 % 36.6 %

Gain from sale-leaseback, net (15.3) % (2.3) % (4.0) %

Gain on sale-leaseback, net (3.5) % (15.3) % (2.3) %

Impairment charges 10.2 % 6.1 % 20.6 %

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Total operating costs and expenses 110.5 % 95.8 % 113.0 %

Income (loss) from operations 4.2 % (13.0) % 7.1 %

Other income (expense):

(Loss) income from operations (10.5) % 4.2 % (13.0) %

Other (expense) income:

Interest expense, net (11.8) % (11.3) % (9.2) %

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The following table sets forth certain financial information associated with results of operations for the years ended December 31, 2024, 2023 and 2022.

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

Non-gaming expenses include hotel, food and beverage and retail, entertainment and other expenses.

Non-gaming revenue includes hotel, food and beverage, licensing and retail, entertainment and other revenue.

Non-gaming expenses include hotel, food and beverage, licensing and retail, entertainment and other expenses.

Years Ended December 31, 2024 over 2023

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North America Interactive 66,670 85,203 113,913 (18,533) (28,710)

Other 179,394 51,696 110,959 127,698 (59,263)

Corporate & Other (13,060) 179,394 51,696 (192,454) 127,698

Total General and administrative $ 1,043,486 $ 1,113,976 $ 825,706 $ (70,490) $ 288,270

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Food and beverage 135,213 143,521 (8,308) (5.8) %

Licensing 6,861 — 6,861 100.0 %

Retail, entertainment and other 108,043 112,861 (4,818) (4.3) %

Total revenue $ 2,450,478 $ 2,449,073 $ 1,405 0.1 %

Revenue for the year ended December 31, 2023 increased 8.6% compared to the year ended December 31, 2022.

We saw gaming revenue increase across all reporting segments year over year through organic growth.

Additionally, we saw incremental revenue from our recent acquisitions of Tropicana Las Vegas, Bally’s Golf Links and Casino Secret (collectively “Recent Acquisitions”), as well as our Bally’s Chicago temporary casino property which commenced operations on September 9, 2023.

Total revenue for the year ended December 31, 2024 remained consistent when compared to the year ended December 31, 2023.

Revenue from our Casinos & Resorts reportable segment increased 6% to $1.01 billion, mainly due to the inclusion of our Bally’s Chicago temporary casino property, which contributed an incremental increase of approximately $96.5 million during the year ended December 31, 2024, partially offset by the incremental decrease in revenue associated with the closure of our Tropicana Las Vegas property during the second quarter of 2024 of approximately $77.8 million.

The expanded operating jurisdictions within our North America Interactive reportable segment also contributed additional incremental revenue of approximately $37.8 million for the year ended December 31, 2024, compared to the prior year.

Additionally, within our International Interactive reportable segment, we experienced decreased revenue within our previous markets associated with the sale of the Carved-Out Business, which was partially offset by the incremental increase of $6.9 million from our licensing revenue stream and additional growth within our UK market of approximately $67.5 million.

Gaming and non-gaming expenses

Gaming and non-gaming expenses for the year ended December 31, 2023 increased $76.0 million and $19.9 million.

The increased gaming expense from the prior year was primarily attributable to the expenses related to the launch of our mobile iGaming and Bally Bet sportsbook apps across several North American jurisdictions.

The inclusion of expenses from our recently opened Bally’s Chicago temporary casino property and the incremental gaming expenses from our Recent Acquisitions also contributed to the increase in both gaming and non-gaming expenses compared to prior year.

Gaming and non-gaming expenses for the year ended December 31, 2024 increased $18.0 million when compared to the year ended December 31, 2023.

The overall increase in gaming and non-gaming expenses from the prior year was mainly attributable to the inclusion of expenses from our recently opened Bally’s Chicago temporary casino which contributed approximately $52.8 million to the increase in both gaming and non-gaming expenses during the year ended December 31, 2024, partially offset by the incremental decrease in expense associated with the closure of our Tropicana Las Vegas property of $42.1 million.

General and administrative

General and administrative expenses for the year ended December 31, 2023 increased $288.3 million from $825.7 million, in 2022.

These increases were primarily attributable to the Diamond Sports Group (“Diamond”) legal reserve, higher operating lease expenses, severance charges in connection with the Interactive restructuring plan, and incremental general and administrative expenses attributable to our Recent Acquisitions and the opening of our Bally’s Chicago temporary casino property.

General and administrative expenses for the year ended December 31, 2024 decreased $70.5 million from $1.11 billion, in 2023.

The year to date fluctuation in general and administrative expense is primarily attributable to the $144.9 million Diamond Sports Group non-cash settlement in 2023 and decreased acquisition and integration costs and severance and employee related restructuring costs compared to prior year, partially offset by the Loss on disposal of business of $27.8 million recorded in the current year related to the sale of the Carved-Out Business in the fourth quarter of 2024, and increased Merger Agreement costs in 2024.

Impairment charges

In 2023, we recorded total impairment charges of $149.8 million which included $54.0 million in the International Interactive segment related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition that is being de-emphasized for other newer brands in Asia and Rest of World, impairment charges of $9.4 million and $4.0 million on goodwill and intangible assets held for sale, respectively, $5.7 million of impairment charges related to our interactive restructuring program representing the impairment of certain technology which will no longer be utilized, and $76.7 million of impairment on gaming licenses in connection with our Casinos and Resorts segment.

In 2024, we recorded total impairment charges of $248.9 million which included $125.9 million, $71.6 million and $12.8 million impairment charges in the International Interactive segment related to its intangible assets, goodwill and certain other long-lived assets, respectively.

In addition, we also recorded $38.6 million of impairment charges on gaming licenses in connection with our Casinos & Resorts reporting segment.

Depreciation and amortization

Depreciation and amortization for the year ended December 31, 2024 was $379.5 million, compared to $350.4 million in 2023.

This increase was largely driven by our Tropicana Las Vegas property where we recorded accelerated depreciation on assets as a result of our recently announced impending closure in April 2024.

These accelerated depreciation charges will extend through the first quarter of 2024.

Income (loss) from operations

Income from operations was $104.0 million for the year ended December 31, 2023 compared to loss from operations of $293.0 million in 2022.

These changes year-over-year were driven by a gain on sale-leaseback recorded during the current year related to our Hard Rock Biloxi and Bally’s Tiverton properties, organic revenue growth, benefits from our recently opened Bally’s Chicago temporary casino property and Recent Acquisitions, offset by increased general and administrative expenses and impairment charges, as noted above.

The year to date increase was primarily driven by our Tropicana Las Vegas property, where we recorded accelerated depreciation of $80.1 million on assets as a result of the recent closure of the property on April 2, 2024, partially offset by the decreased expense related to the assets sold in the fourth quarter of 2024 as part of the Carved-Out Business.

(Loss) income from operations

Loss from operations was $258.3 million for the year ended December 31, 2024 compared to income from operations of $104.0 million in 2023.

The change year-over-year was driven by the net gain on sale-leaseback of $86.3 million in the current year, made up of the $150.0 million loss related to the lease modification event involving the real estate underlying the Bally’s Chicago project and the $236.3 million gains recorded related to the sale of the Bally’s Kansas City and Bally’s Shreveport assets, compared to the gain on sale-leaseback of $374.3 million recorded in 2023 related to our Hard Rock Biloxi and Bally’s Tiverton properties, combined with the increased impairment charges in the current year, as noted above.

Other (income) expense

Total other expense, net increased to $289.7 million for the year ended December 31, 2023 from $161.5 million in 2022.

This increase was driven by increased interest expense on our debt, coupled with an increase in the value of our commercial rights liabilities, and a foreign exchange loss in the current year, compared to a gain in the prior year.

Provision (benefit) for income taxes

Provision for income taxes for the year ended December 31, 2023 was $1.8 million, compared to a benefit for income tax of $28.9 million in 2022.

Total other expense, net remained consistent, when compared to the year ended December 31, 2023.

During the year, we experienced an increase in interest expense due to higher interest rates of our borrowings year-over-year, which were offset by increased foreign currency gains and increased interest income recognized on our derivative instruments.

Provision for income taxes

Provision for income taxes for the year ended December 31, 2024 was $15.3 million, compared to $1.8 million in 2023.

The effective tax rate for the year ended December 31, 2024 was (2.8)% compared to (0.9)% in 2023.

The 2023 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 and the impact of the federal tax on global intangible low-taxed income, partially offset by the rate differential created by our foreign entities.

The 2024 year to date effective tax rate differed from the US federal statutory 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 and the negative rate differential driven by the increased impairment charges within our foreign entities.

On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development Pillar Two Framework that was supported by over 130 countries worldwide.

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A significant number of other countries are also implementing similar legislation.

The Company is currently in the process of evaluating the impact of this on its consolidated financial statements.

The estimated impact of this directive is immaterial to the Company’s consolidated financial statements in the current year.

Net loss and loss per share

Net loss for the year ended December 31, 2024 was $567.8 million compared to $187.5 million in 2023.

As a percentage of revenue, net loss decreased from 18.9% for the year ended December 31, 2022 to a net loss of 7.7% for the year ended December 31, 2023.

As a percentage of revenue, net loss increased from 7.7% for the year ended December 31, 2023 to a net loss of 23.2% for the year ended December 31, 2024.

Diluted loss per share for the year ended December 31, 2024 and 2023 was $11.71 and $3.51, respectively, and was impacted by the factors noted above.

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Consolidated Adjusted EBITDA was $495.6 million for the year ended December 31, 2024, a decrease of $31.7 million, or 6.0%, from $527.3 million in 2023.

Adjusted EBITDAR for the Casinos & Resorts segment for the year ended December 31, 2023 was $429.0 million, an increase of $30.0 million, or 7.5%, for the year ended December 31, 2023 compared to $398.9 million in 2022.

The increase from the prior year is mainly attributable to the inclusion of our Bally’s Chicago temporary casino and Tropicana Las Vegas properties and strong performance at Bally’s Atlantic City in the current year, partially offset by softening in the market from decreased consumer spend.

Adjusted EBITDAR for the International Interactive segment for the year ended December 31, 2023 was $343.6 million, an increase of $21.9 million, or 6.8%, compared to $321.7 million, mainly due to stronger performance in the United Kingdom year-over-year.

Adjusted EBITDAR for the Casinos & Resorts segment for the year ended December 31, 2024 was $370.5 million, a decrease of $58.5 million, or 13.6%, for the year ended December 31, 2024 compared to $429.0 million in 2023.

These decreases were primarily attributable to weather impacts across multiple properties and the closure of the Tropicana Las Vegas in the current year, partially offset by the inclusion of Bally’s Chicago that opened at the end of the third quarter of 2023.

Adjusted EBITDAR for the International Interactive segment for the year ended December 31, 2024 was $336.5 million, a decrease of $7.1 million, or 2.1%, compared to $343.6 million, mainly due to softness in our non-UK operations year-over-year.

Adjusted EBITDAR loss for the North America Interactive segment for the year ended December 31, 2024 was $40.2 million compared to $55.7 million in 2023.

The reduction in adjusted EBITDAR losses are largely driven by stronger performance in mobile iGaming in New Jersey coupled with cost-savings in connection with the execution of the restructuring plan of our interactive segments.

The decrease in adjusted EBITDAR losses is largely driven by expanded operating jurisdictions and stronger performance in iGaming and sportsbook in the current year.

The following table presents segment Adjusted EBITDAR, which is our reportable segment GAAP measure and our primary measure for profit or loss for our reportable segments, and reconciles Adjusted EBITDAR on a consolidated basis to net income (loss).

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North America Interactive (40,236) (55,653) (65,729)

Other (63,770) (53,024) (45,334)

Corporate & Other (52,212) (63,770) (53,024)

Total 614,530 653,104 601,828

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Depreciation and amortization (379,544) (350,408) (300,559)

Non-operating (income) expense (2)

Non-operating expense, net (2)

(25,608) (12,688) 46,176

Foreign exchange (gain) loss

10,271 (11,019) 516

Transaction costs (3)

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Restructuring charges (4)

Decommissioning costs (5)

(17,921) (31,014) —

Tropicana Las Vegas demolition and closure costs (5)

Share-based compensation (14,752) (24,074) (27,912)

Gain on sale-leaseback, net (6)

Planned business divestiture (6)

86,254 374,321 50,766

Loss on disposal of business (7)

Impairment charges (8)

(248,879) (149,825) (463,978)

Diamond Sports Group non-cash liability (8)

Merger Agreement costs (9)

Payment Service Provider write-off (10)

Diamond Sports Group non-cash settlement (11)

(1,114) (144,883) —

Contract termination expense (9)

(17,356) (5,540) (14,236)

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(1) Consists of the operating lease components contained within our triple net master lease dated June 4, 2021 with GLPI for the real estate assets used in the operation of Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities, Bally’s Black Hawk, Hard Rock Biloxi and Bally’s Tiverton, the individual triple net lease with GLPI for the land underlying the operations of Tropicana Las Vegas, and the triple net lease assumed in connection with the acquisition of Bally’s Lake Tahoe for real estate and land underlying the operations of the Bally’s Lake Tahoe facility.

(2) Non-operating (income) expense includes:

(i) change in value of commercial rights liabilities, (ii) (gain) loss on extinguishment of debt, (iii) non-operating items of equity method investments including our share of net income or loss on an investment and depreciation expense related to our Rhode Island joint venture, (iv) (gain) adjustment on bargain purchases, and (v) other (income) expense, net.

(3) Includes acquisition, integration and other transaction related costs, financing costs incurred in connection with sale lease-back transactions, the prior year tender offer process, and costs incurred to address the Standard General takeover bid.

(4) Restructuring charges representing the severance and employee related benefits related to the announced Interactive business restructuring initiatives.

(5) Costs related to the decommissioning of the Company’s sports betting platform in favor of outsourcing the platform solution to third parties.

(6) Losses related to a North America Interactive business that Bally’s is marketing as held-for-sale as of December 31, 2023.

(7) Non-cash impairment charges for 2023 included $54.0 million in the International Interactive segment related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition, $76.7 million impairment on indefinite-lived gaming licenses in our Casinos & Resorts segment, $5.7 million of impairment charges related to our interactive restructuring program representing the impairment of certain technology which will no longer be utilized, and $9.4 million and $4.0 million of impairment on goodwill and intangible assets, respectively, held for sale.

Non-cash impairment charges for 2022 included $390.7 million related to our North America Interactive segment as part of our annual goodwill and asset impairment analysis and $73.3 million in the International Interactive segment related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition.

(1) Consists of the operating lease components contained within our triple net leases with GLPI for the real estate assets used in the operations of certain Casinos & Resorts properties, and the triple net lease associated with the real estate and land underlying the operations of the Bally’s Lake Tahoe facility.

(2) Non-operating expense, net includes:

(i) change in value of performance warrants, (ii) gain on extinguishment of debt, (iii) non-operating items of equity method investments including our share of net income or loss on an investment and depreciation expense related to our Rhode Island joint venture, and (iv) other (income) expense, net.

(3) Includes acquisition, integration and other transaction related costs, and financing costs incurred in connection with the Company's sale lease-back transactions.

(4) Restructuring charges representing the severance and employee related benefits related to the announced Interactive business restructuring initiatives and the closure of the Company’s Tropicana Las Vegas property on April 2, 2024.

(5) Demolition and closure costs associated with the Tropicana Las Vegas property which is part of the plan to redevelop the site with a state-of-the-art integrated resort and ballpark.

As part of the binding term sheet, GLPI has reimbursed the Company for its demolition expenses and had increased rent to reflect the additional funding.

(6) Gain on sale-leaseback, net is related to Bally’s Kansas City, Bally’s Shreveport and the Company’s Bally’s Chicago project during the year ended December 31, 2024, the Hard Rock Biloxi and Bally’s Tiverton properties during the year ended December 31, 2023, and Bally’s Quad Cities and Bally’s Black Hawk (“Bally's Black Hawk”) during the year ended December 31, 2022.

(7) Loss on disposal of business of $27.8 million recorded in 2024 related to the sale of its interactive business in Asia and certain other international markets in its International Interactive reportable segment in the fourth quarter of 2024.

(8) Impairment charges for 2024 includes $125.9 million, $71.6 million and $12.8 million impairment charges in the International Interactive segment related to its intangible assets, goodwill and certain other long-lived assets, respectively, as well as $38.6 million of impairment charges on gaming licenses in connection with our Casinos & Resorts reporting segment.

Impairment charges in 2023 included $54.0 million in the International Interactive segment related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition, $58.6 million impairment on indefinite-lived gaming licenses in the Casinos & Resorts segment, $5.7 million of impairment charges related to the interactive restructuring program representing the impairment of certain technology which will no longer be utilized, and $3.8 million of impairment on related to assets held-for-sale in 2023.

Impairment charges in 2022 include $390.7 million related to our North America Interactive segment as part of our annual goodwill and asset impairment analysis and $73.3 million in the International Interactive segment related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition.

(9) Costs incurred in connection with the Company’s merger with Standard General.

(10) In the third quarter of 2024, the Company recorded a $6.3 million charge to reduce amounts due from payment service providers (“PSP”) due to a circumstance whereby the payment processer for certain online sports wagering deposits failed to capture and settle funds with patrons of the Company.

The Company was not able to recover the full amount due from the payment service provider, resulting in a write down to the recoverable amount.

In addition to amounts recovered, the Company received $5.1 million from the PSP as a signing bonus for entering into an extension agreement.

(11) Non-cash reserve to reflect the remaining Diamond commercial rights intangible asset offset by forgiveness of the liability.

Refer to Note 22 “ Commitments and Contingencies ” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K.

(9) Contract termination expense related to the early termination of retail and online sportsbook operating agreements with William Hill at certain of our casino properties.

(12) Other includes the following items:

(i) non-routine legal expenses and settlement charges for matters outside the normal course of business, (ii) storm related insurance and business interruption recoveries, (iii) rebranding expenses in connection with Bally’s corporate name change, (iv) professional fees and other costs incurred to establish the partnership with Sinclair and acquire Bally Interactive, and (v) other individually de minimis expenses.

(i) non-routine legal expenses, contract termination charges, and settlement costs for matters outside the normal course of business, (ii) storm related insurance and business interruption recoveries, and (iii) other individually de minimis expenses.

Year ended December 31, 2023 compared to year ended December 31, 2022

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Net cash provided by operating activities $ 113,999 $ 188,614 $ 270,971

Net cash used in investing activities (207,791) (302,922) (2,296,904)

Net cash provided by financing activities 65,755 43,237 2,404,598

Net cash provided by (used in) investing activities 97,835 (207,791) (302,922)

Net cash (used in) provided by financing activities (287,840) 65,755 43,237

Effect of foreign currency on cash and cash equivalents (8,002) 5,153 (20,722)

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Operating Activities

The decrease in cash provided by operating activities was primarily attributable to a decrease in net loss increased gains on sale-leaseback transactions, coupled with decreased impairment charges compared to prior year.

These negative effects on cash provided by operating activities were partially offset by a year-over-year decrease in net loss, the increased Diamond legal reserve, and increased in depreciation and amortization.

Net cash provided by operating activities was $114.0 million for the year ended December 31, 2024, compared to $188.6 million in 2023.

The decrease in cash provided by operating activities was primarily driven by the changes in working capital, offset by increased foreign currency losses in the current year.

Investing Activities

Net cash used in investing activities for 2023 was driven by capital expenditures and $135.3 million of gaming license fees in connection with the opening of our Bally’s Chicago temporary casino and cash paid for acquisitions in the year, offset by proceeds from our Tiverton and Hard Rock Biloxi sale-leaseback transactions.

In 2022, cash used in investing activities was driven by capital expenditures attributable to our expansion and renovation projects at Bally’s Atlantic City, Bally’s Twin River and Bally’s Kansas City and cash paid for acquisitions.

Net cash provided by investing activities was $97.8 million for the year ended December 31, 2024, compared to net cash used in investing activities of $207.8 million in 2023.

This change was primarily driven a $111.7 million decrease in cash paid for capital expenditures year-over-year, combined with the $135.3 million of gaming license fees paid in 2023 in connection with the opening of our Bally’s Chicago temporary casino.

Financing Activities

Cash provided by financing activities increased year-over-year due to a decrease in stock repurchases coupled with the decrease in repayments of long-term debt, partially offset by a decrease in the issuance of long-term debt year-over-year.

Net cash used in financing activities was $287.8 million for the year ended December 31, 2024, compared to net cash provided by financing activities of $65.8 million in the prior year.

This increase was mainly attributable to an increase in long-term debt repayments made in 2024, partially offset by decreased stock repurchases when compared to the prior year.

Capital Return Program

We have a Board approved capital return program under which we may expend a total of up to $700 million for a share repurchases and payment of dividends.

During the year ended December 31, 2023 we repurchased 7,581,428 common shares for an aggregate purchase price of $99.1 million.

As of December 31, 2024, there was $95.5 million available for use under the Capital Return Program, subject to limitations in our regulatory and debt agreements.

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Any future determinations relating to our dividend policies will be made at the discretion of our Board and will depend on conditions then existing, including our financial condition, results of operations, contractual restrictions, capital and regulatory requirements and other factors our Board may deem relevant.

On August 20, 2021, we issued $750.0 million aggregate principal amount of 5.625% senior notes due 2029 and $750.0 million aggregate principal amount of 5.875% Senior Notes due 2031 (together, the “Senior Notes”).

On October 1, 2021, upon the closing of the Gamesys acquisition, we assumed the issuer obligation under the Senior Notes.

Unsecured Notes

On August 20, 2021, we issued $750.0 million aggregate principal amount of 5.625% senior notes due 2029 and $750.0 million aggregate principal amount of 5.875% senior notes due 2031.

On October 1, 2021, upon the closing of the Gamesys acquisition, we assumed the issuer obligation under the unsecured notes.

The indenture contains covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, (i) incur additional indebtedness, (ii) pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, (iii) enter into certain transactions with affiliates, (iv) sell or otherwise dispose of assets, (v) create or incur liens and (vi) merge, consolidate or sell all or substantially all of the Company’s assets.

These covenants are subject to exceptions and qualifications set forth in the indenture.

Secured Notes

In connection with the closing of the merger on February 7, 2025, we entered into a note purchase agreement and issued $500 million in aggregate principal amount of first lien senior secured notes due October 2, 2028, at an annual interest rate of 11%, payable quarterly.

These notes are guaranteed by our restricted subsidiaries and secured by the same collateral securing the Credit Facility.

The agreement mandates redemption offers in certain situations, such as asset sales and unpermitted debt issuances, with specific redemption premiums applicable within the first two years.

After two years, notes can be redeemed at par.

The agreement also includes covenants limiting additional indebtedness, dividend payments, asset sales, investments, and liens, subject to certain exceptions and qualifications.

Credit Facility

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These financial covenants include a provision where, in the event borrowings under the Revolving Credit Facility exceed 30% of the total revolving commitment, the Company is required to maintain a first lien secured indebtedness to Adjusted EBITDA ratio of 5.00 to 1.00.

As of December 31, 2023, the Company was in compliance with all applicable covenants and expects to be in compliance for the next twelve months.

As of December 31, 2024, the Company was in compliance with all applicable covenants.

During 2023, the Company entered into certain currency swaps to synthetically convert $500 million of its Term Loan Facility to an equivalent fixed-rate Euro-denominated instrument, due October 2028, with a weighted average fixed interest rate of approximately 6.69% per annum.

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Additionally, as part of the Company’s risk management program to manage its overall interest rate exposure, the Company entered into a notional aggregate amount of $500 million interest rate collar arrangements maturing in 2028 where the Company’s SOFR floating rate interest under its Term Loan Facility is capped at 4.25%, with a weighted average SOFR floor rate of 3.22%, pursuant to the interest rate collar arrangements.

During 2024, the Company settled $500.0 million of notional interest rate collars and received $3.9 million in termination payments, reflecting the fair value on the settlement date.

Additionally, the Company simultaneously entered into a series of interest rate contracts in a notional aggregate amount of $1.00 billion, to further manage the Company’s exposure to interest rate movements associated with the Company’s variable rate Term Loan Facility through its synthetic conversion to fixed rate debt.

The tenor of these contracts were matched with the maturity of the Term Loan Facility tranche maturing on October 1, 2028.

Refer to Note 17 “ Long-Term Debt ” in Item 8 of this Annual Report on Form 10-K for further information.

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Refer to Note 18 “ Leases ” in Item 8 of this Annual Report on Form 10-K for further information.

As of December 31, 2023, 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 were leased under the terms of a master lease agreement (the “Master Lease”) with GLPI.

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 a minimum 1% annual escalation or greater escalation dependent on CPI.

During 2023, the Company’s Bally’s Tiverton and Hard Rock Biloxi properties were added to the master lease on January 3, 2023, as a result of a transaction with GLP Capital, L.P., the operating partnership of GLPI, related to the land and real estate assets for a total consideration of $625.4 million.

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

These properties increased the minimum annual payments under the Master Lease by $48.5 million.

In addition to the properties under the Master Lease, the Company has also entered into a sale-leaseback transaction with GLPI for the non-land assets of Tropicana Las Vegas, which the Company acquired during the fourth quarter of 2022.

As of December 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 were leased under the terms of a master lease agreement (the “Master Lease No.1”) with GLPI.

The Master Lease No.1 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 a minimum 1% annual escalation or greater escalation dependent on CPI.

In addition to the properties under the Master Lease No.1 explained above, the Company also entered into a lease with GLPI for the land associated with Tropicana Las Vegas.

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.

Financing Obligation

Bally’s Chicago Operating Company, LLC, an indirect wholly-owned subsidiary of the Company, has entered into an agreement to lease the land on which Bally’s Chicago will be built.

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 this lease with a corresponding long-term financing obligation of $200.0 million as of December 31, 2023 and 2022.

In 2024, the Company modified the lease and GLPI paid $48.6 million to the Company to fund the demolition of the building at the Tropicana Las Vegas site in exchange for increasing annual rent by $4.1 million, subject to a minimum 1% annual increase or greater based on CPI, for a total modified annual rent of $14.6 million.

In 2024, the Company completed the sale lease-back transaction of certain real property interests underlying Bally’s Kansas City and Bally’s Shreveport to GLPI for $394.8 million under the terms of a new master lease agreement (the “Master Lease No.2”), with an initial term of 15 years, including four, five-year options to renew and minimum annual payments of $32.2 million, subject to minimum 1% annual escalation or greater escalation dependent on CPI.

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.

Under the terms of the Master Lease No.2, the Company assigned its rights and obligations related to existing ground leases underlying the Bally’s Kansas City and Bally’s Shreveport properties to GLPI, while remaining responsible to GLPI for rent under these leases as additional charges.

This resulted in the termination of the previous right of use assets and lease liabilities related to the land leases and a gain of $26.4 million.

In connection with the sale of the Bally’s Kansas City and Bally’s Shreveport assets, the Company recorded a gain of $209.8 million representing the difference in the transaction price and the derecognition of assets.

In 2024, GLP acquired the real estate underlying the Bally’s Chicago project, assuming the existing lease, for which the Company was subject to a $200.0 million financing obligation.

Reclassifying the lease as an operating lease due to the transfer of control of the land asset from the Company to the lessor, permitted sale recognition, resulting in the Company derecognizing the $350.0 million land asset and the $200.0 million the long-term financing obligation, and recording a $150.0 million loss on sale-leaseback.

Additionally, the Company entered into a Binding Term Sheet to form a strategic construction and financing arrangement with GLP, which includes the funding to complete the construction of Bally’s Chicago permanent casino.

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 includes 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.

Capital Expenditures

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For the year ended December 31, 2024, capital expenditures were $199.8 million compared to $311.5 million in 2023.

In 2023, we continued our spending on our planned projects and maintenance of our casino properties, making significant progress on our Bally’s Chicago, Bally’s Twin River and Bally’s Kansas City properties.

In 2024, we continued our spending on our planned projects and maintenance at our casino properties, the most significant being our future Bally’s Chicago permanent facility.

We expect that capital expenditures, outside of our planned development of the Bally’s Chicago permanent facility, will be relatively flat in 2025 compared to 2024 as we continue our focus on generating cash flows to invest in long-term growth opportunities for the entire Bally’s portfolio.

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Approximately $45.1 million of the committed investment remains as of December 31, 2024.

With the addition of the live dealer studio to the property and other customer facing growth initiatives, we expect to apply approximately $5 million of expenditures in 2024 towards the master contract commitment.

Bally’s Atlantic City - Construction on our Bally’s Atlantic City property commenced in 2021.

We are committed to invest approximately $100 million over five years to refurbish and upgrade Bally’s Atlantic City’s facilities and expand its amenities, including renovated hotel rooms and suites, outdoor beer hall and lobby bar.

Approximately $7.7 million of the committed investment remains as of December 31, 2023.

Bally’s Kansas City - We began construction on the planned redevelopment project of Bally’s Kansas City in November 2021 and completed the project in the third quarter of 2023.

We believe the redevelopment of the property, which includes a 40,000 square foot land-based building, restaurant, bar and retail space, has improved the property and guest experience and will drive growth and our return on investment in the coming years.

Spending on the project during 2023 was approximately $37 million.

Centre County, PA - On December 31, 2020, we signed a framework agreement with entities affiliated with an established developer to design, develop, construct and manage a Category 4 licensed casino in Centre County, Pennsylvania.

Subject to receipt of regulatory approvals, which remain pending, it will house up to 750 slot machines and 30 table games.

The casino will also provide, subject to receipt of separate licenses and certificates, retail sports betting, online sports betting and online gaming.

We estimate the total cost of the project, including construction, licensing and iGaming/sports betting operations, to be approximately $120 million.

If completed, we will acquire a majority equity interest in the partnership, including 100% of the economic interests of all retail sports betting, online sports betting and iGaming activities associated with the project.

Bally’s Chicago - On June 9, 2022, a wholly-owned indirect subsidiary of the Company, Bally’s Chicago Operating Company, LLC (the “Developer”), signed a host community agreement with the City of Chicago to develop a destination casino resort, to be named Bally’s Chicago, in downtown Chicago, Illinois that will include approximately 3,400 slot machines, 170 table games, 10 food and beverage venues, 500 hotel rooms, a 65,000 square foot entertainment and event center, 20,000 square feet of exhibition space, 3,300 parking spaces and an outdoor green space.

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The temporary casino commenced operations on September 9, 2023 at the Medinah Temple and includes approximately 800 gaming positions and 3 food and beverage venues.

The Company currently estimates the permanent casino construction to be completed by the end of 2026.

In 2024, we estimate spending of approximately $100 to 200 million primarily dedicated to demolition and site preparation.

In connection with the entry into the host community agreement with the City of Chicago, the Company made a one-time up-front payment to the City of Chicago equal to $40.0 million.

Beginning on the date of operations commencement, the Company will be required to pay annual fixed host community impact fees of $4.0 million.

In 2024, we spent approximately $133.6 million related to the construction and development of our permanent casino and resort, which is expected to open to the public in 2026.

We expect future funding of the permanent casino construction to be financed through the GPLI agreement noted above.

In connection with the entry into the host community agreement with the City of Chicago, the Company will be required to pay annual fixed host community impact fees of $4.0 million.

Additionally, in connection with the host community agreement, the Company provided the City of Chicago with a performance guaranty whereby the Company agreed to have and maintain available financial resources in an amount reasonably sufficient to allow the Developer to complete its obligations under the host community agreement.

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Sponsorship Commitments - The Company has entered into several sponsorship agreements with various professional sports leagues and teams, allowing the Company use of official league marks for branding and promotions, among other rights.

As of December 31, 2023, obligations related to these agreements were $135.0 million, of which $18.1 million is expected to be paid in 2024, with contracts extending through June 2036

As of December 31, 2024, obligations related to these agreements were $125.4 million, with contracts extending through 2036.

Interactive Technology Partnerships - 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.

The cumulative minimum obligation committed in these agreements is approximately $55.4 million, of which $14.1 million is expected to be paid in 2024, extending through 2028.

As of December 31, 2024, the cumulative minimum obligation committed in these agreements is approximately $52.4 million, extending through 2029.

Critical Accounting Estimates

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We have elected to perform our annual tests for indications of impairment as of the first day of the fourth quarter of each year.

The evaluation of goodwill and indefinite-lived intangible assets requires the use of estimates about future operating results of each reporting unit to determine the estimated fair value of the reporting unit and the indefinite lived intangible assets.

The evaluation of goodwill and indefinite-lived intangible assets requires the use of estimates about future operating results of each reporting unit and asset to determine the estimated fair value of the reporting unit and the indefinite lived intangible assets.

The Company must make various assumptions and estimates in performing its impairment testing, including assumptions and estimates about future cash flows.

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The most sensitive inputs to the estimated fair value of the International Interactive reporting unit were the discount rate and terminal growth rate.

A hypothetical 100 basis point increase in the discount rate or a 100 basis point decline in the terminal growth rate would not have resulted in any impairment charge.

A hypothetical 50 basis point increase in the WACC or a 50 basis point decline in the terminal growth rate would not have resulted in any impairment charge.

Material changes in these estimates could occur and result in additional impairment in future periods.

We consider certain of our gaming licenses and tradenames as indefinite-lived intangible assets that do not require amortization based on our future expe ctations to operate our gaming properties indefinitely as well as our historical experience in renewing these intangible assets at minimal cost with various state commissions.

Rather, these intangible assets are tested annually for impairment, or more frequently if indicators of impairment exist.

If the carrying amounts of the indefinite-lived intangible assets exceed their fair value, an impairment loss is recognized.

We assess the fair value of our gaming licenses and tradenames using the Greenfield Method and relief-from-royalty method, respectively, both under the income approach.

Based on the annual impairment assessment of intangible assets, the Company recognized an impairment loss of $54.0 million related to one trademark used within the International Interactive segment.

The trademark was determined to no longer have an indefinite life and is being de-emphasized for other newer brands in Asia, resulting in a decline in actual and projected revenues attributable to the trademark as compared to when the fair value was previously determined.

The fair value of the trademark was determined using a relief from royalty method, which utilized Level 3 inputs such as projected revenue, discount rates, long term growth rates and royalty rates.

To the extent revenues associated with the trademark decline in the near future, discount rates increase significantly, or selected royalty rates decline, we may recognize further impairments.

The selected royalty rate represents the most sensitive input in our estimates and a hypothetical decrease of 50 basis points in the royalty rates would result in additional impairment of approximately $0.4 million.

Additionally, the Company recognized an impairment loss of $76.7 million on three gaming licenses within the Casinos & Resorts segment.

The impairment was triggered by declines in actual revenues and operating cash flows compared to when the licenses were originally valued at acquisition.

The Company valued the gaming licenses using the Greenfield Method under the income approach which estimates the fair value of the gaming license using a discounted cash flow model assuming the Company built a new casino with similar utility to that of the existing casino.

The primary inputs to the valuation involve estimating projected revenues and operating cash flows, estimated construction costs, and pre-opening expenses and is discounted at a rate that reflects the level of risk associated with receiving cash flows attributable to the license.

The most sensitive inputs to the estimated fair value of the licenses are the discount rate and terminal growth rates applied.

A hypothetical 50 basis point increase in the discount rate or a 50 basis point decline in the terminal growth rate would have resulted in incremental impairment charges of $21.3 million or $19.8 million, respectively.

We prepare our income tax provision in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis