What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-17 compared with 2024-03-15 · 655 added, 741 removed, 1190 unchanged (54% of the section changed)

7 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 202 4 , 202 3 and 202 2

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 202 3 , 202 2 and 20 21

Consolidated Statements Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 202 4 , 202 3 and 202 2

7 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 15, 2024, expressed an adverse opinion on the Company’s internal control over financial reporting because of material weaknesses.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 17, 2025, expressed an adverse opinion on the Company's internal control over financial reporting because of a material weakness.

Basis for Opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill – International Interactive Reporting Unit – Refer to Notes 2 and 11 to the financial statements.

3 unchanged sentences

The key inputs in determining the fair value of the International Interactive reporting unit include expected cash flows and projected financial results, including forecasted revenues (collectively the “International Interactive forecasts”), the selection of the discount rate, and market multiples.

As of December 31, 2023, the carrying value of the International Interactive reporting unit goodwill is $1,586.6 million.

As of December 31, 2024, the value of the International Interactive reporting unit goodwill is $1,451.3 million.

The Company’s fair value determination of its International Interactive reporting unit required management to make significant estimates and assumptions of International Interactive forecasts, discount rates, and market multiples.

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◦ Developing a range of independent estimates and comparing those to the market multiples selected by management.

Gaming Licenses – Refer to Notes 2 and 10 to the financial statements.

Critical Audit Matter Description

The Company has three indefinite-lived gaming licenses in the Casinos & Resorts segment that were determined to have indicators of impairment based on declines in results compared to those projected when the gaming licenses were originally valued at acquisition.

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

The key inputs in determining the fair value, among others, include forecasted revenue and operating cash flows and the discount rates utilized to reflect the level of risk associated with receiving future cash flows attributable to the licenses.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to forecasted revenue and operating cash flows and the determination of discount rates used by management to estimate the fair value of the three gaming licenses in the Casinos & Resorts segment with indicators of impairment included the following, among others:

• We tested the effectiveness of controls over determining the fair value of the gaming licenses, including controls over forecasts of revenue and operating cash flows and the selection of the discount rates.

• We evaluated management’s ability to accurately project revenues and operating cash flows by performing a retrospective review of actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s projected revenue and operating cash flow forecasts by:

◦ Comparing the revenue and operating cash flow forecasts to information included in the Company’s communications to the Board of Directors, industry reports, and certain of its peer companies;

◦ Comparing the revenue and operating cash forecasts to historical financial results;

◦ Evaluating the impact of changes in the regulatory environment and market competition on management’s forecasts;

◦ Conducting inquiries with management;

◦ Evaluating whether the forecasts were consistent with evidence obtained in other areas of the audit.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rates by:

◦ Testing the inputs underlying the determination of the discount rate and testing the mathematical accuracy of the calculation;

◦ Developing a range of independent estimates and comparing those to the discount rate selected by management.

/s/ Deloitte & Touche LLP

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Accrued income taxes 25,468 78,301

Accrued liabilities 651,719 573,931

Accrued and other current liabilities

481,292 651,719

Liabilities related to assets held for sale — 1,307

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Deferred tax liability 118,214 125,590

Commercial rights liabilities 113,626 109,807

Other long-term liabilities 179,411 233,287

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General and administrative 1,043,486 1,113,976 825,706

Gain from sale-leaseback, net ( 374,321 ) ( 50,766 ) ( 53,425 )

Gain on sale-leaseback, net

( 86,254 ) ( 374,321 ) ( 50,766 )

Impairment charges 248,879 149,825 463,978

1 unchanged sentence

Total operating costs and expenses 2,708,806 2,345,064 2,548,713

Income (loss) from operations 104,009 ( 293,008 ) 93,382

(Loss) income from operations

( 258,328 ) 104,009 ( 293,008 )

Other (expense) income:

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Defined benefit pension plan adjustments, net of tax 860 542 1,320

Net unrealized derivative loss on cash flow hedges, net of tax ( 11,246 ) — —

Net unrealized derivative loss on net investment hedges, net of tax ( 21,995 ) — —

Other comprehensive income (loss)

Net unrealized derivative gain (loss) on cash flow hedges, net of tax

3,057 ( 11,246 ) —

Net unrealized derivative gain (loss) on net investment hedges, net of tax

29,916 ( 21,995 ) —

Other comprehensive (loss) income

( 50,709 ) 86,082 ( 268,831 )

Total comprehensive loss

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Retirement of treasury shares — ( 74 ) ( 253,783 ) 182,103 71,754 — — —

Share repurchases ( 2,188,532 ) — — ( 87,024 ) — — — ( 87,024 )

Share repurchases (including tender offer) ( 6,621,841 ) — — ( 153,366 ) — — — ( 153,366 )

Stock options exercised 20,000 — 86 — — — — 86

Reclassification of Sinclair options — — 59,724 — — — — 59,724

Penny warrants exercised 383,934 4 — — — — — 4

Sinclair shares exchanged for penny warrants ( 2,086,908 ) — 114,717 ( 114,717 ) — — — —

Sinclair issuance of penny warrants — — 50,000 — — — — 50,000

Issuance of MKF penny warrants — — 12,010 — — — — 12,010

Shares issued for purchase of SportCaller 107,832 1 3,699 — — — — 3,700

Bally’s Interactive equity issuance 2,074,723 21 121,479 ( 585 ) — — — 120,915

Common stock offering 12,650,000 127 667,746 — — — — 667,873

Shares issued for purchase of Gamesys 9,773,537 98 518,681 — — — — 518,779

Acquired non-controlling interest 67,052 1 3,331 — — — ( 3,332 ) —

5 unchanged sentences

Retirement of treasury shares — ( 75 ) ( 267,054 ) 99,153 166,978 — — ( 998 )

Share repurchases (including tender offer) ( 6,621,841 ) — — ( 153,366 ) — — — ( 153,366 )

Stock options exercised 20,000 — 86 — — — — 86

Share repurchases ( 7,581,428 ) — — ( 99,081 ) — — — ( 99,081 )

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

1 unchanged sentence

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

Conversion of non-controlling interest - Telescope 67,052 1 3,331 — — — ( 3,332 ) —

Other comprehensive loss — — — — — ( 268,831 ) — ( 268,831 )

Settlement of consideration - Bally’s Interactive ( 40,451 ) — 601 ( 601 ) — — — —

Other comprehensive income — — — — — 86,082 — 86,082

Net loss — — — — ( 187,500 ) — — ( 187,500 )

2 unchanged sentences

Share-based compensation — — 14,752 — — — — 14,752

Retirement of treasury shares — ( 75 ) ( 267,054 ) 99,153 166,978 — — ( 998 )

Share repurchases ( 7,581,428 ) — — ( 99,081 ) — — — ( 99,081 )

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

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

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

Settlement of consideration - Bally’s Interactive ( 40,451 ) — 601 ( 601 ) — — — —

Other comprehensive income

Settlement of consideration

81,190 1 ( 178 ) — — — — ( 177 )

Acquired non-controlling interest

8,625 — 428 — — — ( 428 ) —

— — 1,750 — — — — 1,750

Other comprehensive loss

— — — — — ( 50,709 ) — ( 50,709 )

— — — — ( 567,754 ) — — ( 567,754 )

Balance as of December 31, 2024 40,787,007 $ 408 $ 1,414,410 $ — $ ( 1,123,649 ) $ ( 260,267 ) $ — $ 30,902

15 unchanged sentences

(Gain) loss on extinguishment of debt — ( 4,044 ) —

Gain from insurance recoveries — ( 1,265 ) ( 18,660 )

Gain from sale-leaseback, net ( 374,321 ) ( 50,766 ) ( 53,425 )

Diamond Sports Group non-cash liability 144,883 — —

Contract termination — — 30,000

Gain on sale-leaseback, net ( 86,254 ) ( 374,321 ) ( 50,766 )

Diamond Sports Group non-cash settlement 1,114 144,883 —

Loss on disposal of business 27,796 — —

Deferred income taxes 23,947 ( 23,923 ) ( 88,129 )

Loss (gain) on assets and liabilities measured at fair value ( 18,086 ) 1,180 ( 3,251 )

Net gain on equity method investments ( 4,255 ) — —

Change in value of commercial rights liabilities 7,716 ( 32,577 ) ( 17,029 )

Net loss (gain) on equity method investments

1,850 ( 4,255 ) —

Change in value of performance warrants

13,965 7,716 ( 32,577 )

Change in contingent consideration payable 1,343 1,024 ( 10,747 )

Adjustment (gain) on bargain purchase — 107 ( 22,841 )

Proceeds from interest rate contracts

Foreign exchange loss (gain) ( 10,271 ) 11,019 ( 516 )

4 unchanged sentences

Cash paid for acquisitions, net of cash acquired ( 788 ) ( 93,900 ) ( 146,317 )

Proceeds from sale-leaseback 411,000 150,000 144,000

Proceeds from sale-leaseback transactions

388,000 411,000 150,000

Purchase of Bally’s Chicago land — — ( 200,000 )

Advance deposit in connection with sale-leaseback transactions — — 200,000

Foreign exchange forward contract premiums — — ( 22,592 )

Capital expenditures ( 199,827 ) ( 311,483 ) ( 212,256 )

Insurance proceeds — 1,265 18,660

Cash paid for capitalized software ( 44,864 ) ( 45,200 ) ( 37,121 )

Cash and cash equivalents transferred in sale of business

( 4,178 ) — —

Restricted cash transferred in sale of business

( 37,541 ) — —

Proceeds from net investment hedges

Acquisition of gaming licenses ( 2,508 ) ( 145,485 ) ( 55,117 )

2 unchanged sentences

Other investing activities ( 3,588 ) ( 22,723 ) 1,729

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

Net cash provided by (used in) investing activities

97,835 ( 207,791 ) ( 302,922 )

Cash flows from financing activities:

1 unchanged sentence

Repayments of long-term debt ( 794,450 ) ( 280,070 ) ( 564,450 )

Deferred payables

Proceeds from Bally’s Chicago land financing obligation — — 200,000

Payment of financing fees — — ( 65,297 )

Payment of redemption premium on debt extinguishment — — ( 67,857 )

Payment of deferred consideration ( 3,102 ) — ( 30,025 )

Share repurchases — ( 99,081 ) ( 153,366 )

Issuance of common stock, net — — 667,872

Issuance of Sinclair penny warrants — — 50,000

Other financing activities ( 3,997 ) ( 3,094 ) ( 5,922 )

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

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 )

11 unchanged sentences

Unpaid internally developed software 5,419 1,891 —

Sale of business in exchange for note receivable

Bally’s Chicago - land development liability — 47,739 —

Investment in GLP Capital, L.P.

Investment in RI Joint Venture 17,832 — —

Non-controlling interest — ( 3,332 ) 3,760

Stock and equity instruments issued for North America Interactive acquisitions and Gamesys — — 716,162

6,837 14,412 —

Investment in Rhode Island VLT Company, LLC

Non-controlling interest acquired

( 428 ) — ( 3,332 )

Net purchase consideration for acquisitions — 58,580 —

Deferred purchase price payable — — 14,071

Deposit applied to acquisition purchase price — — 4,000

Years Ended December 31,

9 unchanged sentences

Bally’s Corporation (the “Company,” or “Bally’s”) is a global gaming, hospitality and entertainment company with casinos and resorts and online gaming (“iGaming”) businesses.

The Company owns and manages the following properties within its Casinos & Resorts reportable segment:

As of December 31, 2024, the Company owns and manages the following properties within its Casinos & Resorts reportable segment:

Casinos and Resorts Location Type Built/Acquired

9 unchanged sentences

Dover, Delaware Casino, Resort and Raceway 2019

Bally’s Black Hawk (1)(2)

Bally’s Black Hawk (“Bally's Black Hawk”) (1)(2)

Black Hawk, Colorado Three Casinos 2020

13 unchanged sentences

Rock Island, Illinois Casino and Hotel 2021

Tropicana Las Vegas Casino and Resort (“Tropicana Las Vegas”) (2)

Las Vegas, Nevada Casino and Resort 2022

Bally’s Chicago Casino (“Bally’s Chicago”) (3)

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(2) Properties leased from Gaming and Leisure Properties, Inc.

Refer to Note 17 “ Leas es ” for further information.

Refer to Note 18 “ Leases ” for further information.

(3) Temporary casino facility as a permanent casino resort is being constructed.

The Company’s International Interactive reportable segment primarily includes the interactive activities in Europe and Asia of Gamesys Group Ltd.

(“Gamesys”), an iCasino and online bingo platform provider and operator.

The North America Interactive reportable segment includes a portfolio of sports betting, iGaming, and free-to-play gaming brands, and the North American operations of Gamesys.

Site of future permanent casino resort is leased from GLPI.

The Company’s International Interactive reportable segment includes the Company’s interactive European gaming operations, the Company’s global licensing revenue generating operations, as well as one casino property, Bally's Newcastle, in the UK.

The North America Interactive reportable segment portfolio of sports betting, iGaming, and free-to-play gaming brands.

Agreement and Plan of Merger

On July 25, 2024, the Company entered into an Agreement and Plan of Merger (as amended, 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 thereof, 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 therein, 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 26,909,895 shares of common stock of the Company (“Company Common Stock”) based on a 2.45368905950 share exchange ratio, (ii) the Company will issue approximately 3,542,205 shares of Company Common Stock to the other stockholders of Queen, (iii) immediately thereafter, Merger Sub I will merge into the Company (the “Company Merger”), with the Company surviving the Company Merger and (iv) immediately thereafter, Merger Sub II will merge 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.

At the effective time of the Merger, each share of the Company’s Common Stock issued and outstanding (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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concurrently with the Merger Agreement, the Company and Parent entered into support agreements with Standard RI Ltd.

(“SRL”) (the “SG Support Agreement”), SBG Gaming, LLC, a designated subsidiary of Sinclair (“SBG”) (the “SBG Support Agreement”), and Noel Hayden (the “Hayden Support Agreement”), collectively known as the “Support Agreements”.

The Support Agreements obligate the parties to vote their respective shares in favor of the Merger Agreement and related transactions, and to make a Rolling Share Election for their shares, including those acquired through options or warrants.

Additionally, under the SBG Support Agreement, SBG agreed to waive its right to the options it previously acquired under the Framework Agreement, as described in Note 15, “Strategic Partnership - Sinclair Broadcast Group”, upon completion of the Merger, and in exchange, the Company will issue SBG warrants to purchase 384,536 shares of the Company’s common stock under substantially similar terms to the Penny Warrants issued to SBG under the Framework Agreement.

On February 7, 2025, the Company completed the above transactions with the Buyer Parties.

Refer to Note 25 “Subsequent Events” for further information.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1 unchanged sentence

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company, its majority-owned subsidiaries and entities the Company identifies as variable interest entities (“VIEs”), of which the Company is determined to be the primary beneficiary.

All intercompany balances and transactions have been eliminated in consolidation.

All intercompany balances and transactions have been eliminated in consolid ation.

Certain prior year amounts have been reclassified to conform to the current year’s presentation.

3 unchanged sentences

Equity Method Investments

On January 1, 2023, the Company and International Game Technology PLC (“IGT”) contributed certain tangible assets and leases to Rhode Island VLT Company, LLC (the “RI Joint Venture”) in exchange for equity interests of the RI Joint Venture.

In 2024, in connection with the disposal of its Asia Interactive Business, the Company acquired penny warrants that represent a 19.99 % fully-diluted interest in the Buyer, as defined in Note 8 “Dispositions”, for approximately $ 1.9 million.

The Company accounts for this interest as an equity method investment given the Company’s ability to exercise significant influence over, but not control, the counterparty to the agreement.

Refer to Note 8 “Dispositions” for further information.

In 2023, the Company and International Game Technology PLC (“IGT”) contributed certain tangible assets and leases to Rhode Island VLT Company, LLC (the “RI Joint Venture”) in exchange for equity interests of the RI Joint Venture.

The Company contributed video lottery terminals (“VLTs”) and player tracking equipment to the joint venture for a 40 % equity interest of the RI Joint Venture.

1 unchanged sentence

In addition to this joint venture, the Company also has other investments in unconsolidated subsidiaries, which are accounted for using equity method accounting.

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

For the year ended December 31, 2023, the Company recorded net gains on equity method investments of $ 4.3 million.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

During the years ended December 31, 2024 and 2023, the Company recorded (loss) income from equity method investments of $( 1.9 ) million and $ 4.3 million, respectively.

There was no income or loss from equity method investments recorded by the Company during the year ended December 31, 2022.

Variable Interest Entities

6 unchanged sentences

Significant judgments related to these determinations include estimates about the current and future fair values and performance of assets held by these VIEs and general market conditions.

Management has analyzed and concluded that Breckenridge Curacao B.V.

(“Breckenridge”) is a VIE because it does not have sufficient equity investment at risk.

The Company has determined that it is the primary beneficiary and consolidates the VIE because (a) although the Company does not control all decisions of Breckenridge, the Company has the power to direct the activities of Breckenridge that most significantly impact its economic performance through various contracts with the entity and (b) the nature of these agreements between Breckenridge and the Company provides the Company with the obligation to absorb losses and the right to receive benefits based on fees that are based upon off-market rates and commensurate to the level of services provided.

The Company receives significant benefits in the form of fees that are not at market and commensurate to the level of services provided.

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

As of December 31, 2023 and 2022, Breckenridge had total assets of $ 161.3 million and $ 93.4 million, respectively, total liabilities of $ 87.7 million and $ 77.1 million, respectively, and revenues of $ 293.3 million, $ 298.1 million and $ 79.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Management has analyzed and concluded that a trust, that was established in connection with the disposal of the Asia Interactive Business, is a VIE that will be consolidated based on the applicable criterion.

Refer to Note 8, “Dispositions” for further information.

As of December 31, 2024 and 2023, consolidated VIEs had total assets of $ 263.9 million and $ 161.3 million, respectively, and total liabilities of $ 27.9 million and $ 87.7 million, respectively.

Consolidated VIEs had total revenues of $ 169.8 million, $ 293.3 million and $ 298.1 million for the years ended December 31, 2024, 2023 and 2022, 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.

2 unchanged sentences

The preparation of financial statements in conformity with US GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and revenues and expenses and related disclosures of contingent assets and liabilities.

On an ongoing basis, the Company evaluates its estimates and judgments including those related to contingent value rights, the allowance for doubtful accounts, valuation of goodwill and intangible assets, recoverability and useful lives of tangible and intangible long-lived assets, accruals for players club card incentives and for potential liabilities related to any lawsuits or claims brought against the Company, fair value of financial instruments, capitalized software development costs, stock compensation and valuation allowances for deferred tax assets.

On an ongoing basis, the Company evaluates its estimates and judgments including those related to contingent value rights, the allowance for credit losses, valuation of goodwill and intangible assets, recoverability and useful lives of tangible and intangible long-lived assets, accruals for potential liabilities related to any lawsuits or claims brought against the Company, fair value of financial instruments, capitalized software development costs, stock compensation and valuation allowances for deferred tax assets.

The Company bases its estimates and judgments on historical experience and other relevant factors impacting the carrying value of assets and liabilities.

2 unchanged sentences

Cash and cash equivalents includes cash balances and highly liquid investments with an original maturity of three months or less.

Restricted cash includes cash collateral in connection with amounts due to the Chicago Tribune (refer to Note 9 “ Property and Equipment ”), player deposits, payment service provider deposits, and VLT and table games related cash payable to certain states where we operate, which are unavailable for the Company’s use.

Restricted cash includes player deposits, payment service provider deposits, cash collateral in connection with amounts previously due to the Chicago Tribune (refer to Note 10 “ Property and Equipment ”), and VLT and table games related cash payable to certain states where we operate, which are unavailable for the Company’s use.

Concentrations of Credit Risk

1 unchanged sentence

The Company maintains cash with financial institutions in excess of federally insured limits, however, management believes the credit risk is mitigated by the quality of the institutions holding such deposits.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Receivable, Net

6 unchanged sentences

Accounts receivable 62,638 76,376

Allowance for doubtful accounts ( 6,048 ) ( 5,789 )

Allowance for credit losses ( 7,152 ) ( 6,048 )

Accounts receivable, net $ 55,486 $ 70,328

__________________________________

(1) Represents the Company’s share of VLT and table games revenue for Bally’s Twin River and Bally’s Tiverton due from the State of Rhode Island and from the State of Delaware for Bally’s Dover.

An allowance for doubtful accounts is determined to reduce the Company’s receivables for amounts that may not be collected.

(1) Represents the Company’s share of revenue due from the State of Rhode Island and State of Delaware.

An allowance for credit losses is determined to reduce the Company’s receivables for amounts that may not be collected.

The allowance is estimated based on historical collection experience, current economic and business conditions and forecasts that affect the collectability and review of individual customer accounts and any other known information.

Activity for the allowance for doubtful accounts is as follows:

Activity for the allowance for credit losses is as follows:

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands) 2024 2023 2022

20 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022, there was $ 8.0 million, $ 13.6 million and $ 1.9 million of capitalized interest, respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company determines if a contract is or contains a lease at the contract inception date or the date in which a modification of an existing contract occurs.

4 unchanged sentences

The Company recognizes a lease liability for the present value of lease payments at the lease commencement date using its incremental borrowing rate commensurate with the lease term based on information available at the commencement date unless the rate implicit in the lease is readily determinable.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certain of the Company’s leases include renewal options and escalation clauses;

2 unchanged sentences

Rent expense associated with the Company’s long and short term leases and their associated variable expenses are reported in total operating costs and expenses within the consolidated statements of operations.

The Bally’s Chicago ground lease is accounted for as a financing obligation in accordance with ASC 470, Debt as the transaction did not qualify as a sale under ASC 842.

Lease payments are included in “Interest expense, net” within our consolidated statements of operations.

Refer to Note 17 “ Leases ” for further information.

Goodwill consists of the excess of acquisition costs over the fair value of net assets acquired in business combinations.

4 unchanged sentences

If the results of the qualitative assessment indicate it is more likely than not that a reporting unit’s carrying value exceeds its fair value, or if the Company elects to bypass the qualitative assessment, a quantitative goodwill test is performed.

For the quantitative goodwill impairment test, the Company estimates the fair value of the reporting unit using both income and market-based approaches.

Specifically, the Company applies the discounted cash flow (“DCF”) method under the income approach and the guideline company under the market approach and weighs the results of the two valuation methodologies based on the facts and circumstances surrounding the reporting unit.

For the DCF method, the Company relies on the present value of expected future cash flows, including terminal value, utilizing a market-based weighted average cost of capital (“WACC”) determined separately for the reporting unit as of the valuation date.

The determination of fair value under the DCF method involves the use of significant estimates and assumptions, including revenue growth rates driven by future gaming activity, operating margins, capital expenditures, working capital requirements, tax rates, terminal growth rates, and discount rates.

For the market approach, the Company utilizes a comparison of the reporting unit to comparable publicly-traded companies and transactions and, based on the observed earnings multiples, ultimately selects multiples to apply to the reporting unit.

The Company then compares the fair value of its reporting units to the carrying amounts.

If the carrying amount of the reporting unit exceeds the fair value, an impairment is recorded equal to the amount of the excess (not to exceed the amount of goodwill allocated to the reporting unit).

Intangible Assets

2 unchanged sentences

Refer to Note 15 “ Strategic Partnership - Sinclair Broadcast Group ” for further information regarding the Sinclair Broadcast Group (“Sinclair”) commercial rights.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For its finite-lived intangible assets, the Company establishes a useful life upon initial recognition based on the period over which the asset is expected to contribute to the future cash flows of the Company and periodically evaluates the remaining useful lives to determine whether events and circumstances warrant a revision to the remaining amortization period.

13 unchanged sentences

All other expenditures, including those incurred in order to maintain an intangible asset’s current level of performance, are expensed as incurred.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Gaming Licenses and Trade Names - Certain gaming licenses and trade names classified as finite-lived are amortized over their estimated useful lives.

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If the carrying value of the asset exceeds the expected undiscounted future cash flows generated by the asset, the asset is written down to its estimated fair value and an impairment loss is recognized.

Deferred Payables

In order to execute on its strategy of improving working capital efficiency, the Company will, from time to time, participate in trade finance or deferred payable initiatives, including programs that may extend trade terms with certain suppliers or vendors.

In certain cases, where the Company is not able to extend payment terms directly with suppliers or vendors, the Company will consider deferred payable solutions that simulate such trade term extensions.

These solutions generally involve entering into exchange agreements with intermediary institutions who will make payment to the supplier or vendor within the original terms on behalf of the Company, in exchange for a new bill with terms that conforms to the Company’s payment policy of net 90 days.

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.

During the year ended December 31, 2024, the Company borrowed $ 239.1 million, under these deferred payable arrangements and repaid $ 165.4 million.

Amounts outstanding under these deferred payable arrangements were $ 72.8 million as of December 31, 2024 and are included in “ Accrued and other current liabilities ” on the consolidated balance sheets.

For the year ended December 31, 2024, the Company incurred $ 6.4 million of interest expense, under these arrangements.

These arrangements were not utilized by the Company during the years ended December 31, 2023 and 2022.

Debt Issuance Costs and Debt Discounts

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Amortization of debt issuance costs and debt discounts included in “Interest expense” in the consolidated statements of operations was $ 11.7 million, $ 11.3 million and $ 10.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Self-Insurance Reserves

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Self-insurance liabilities are estimated based on the Company’s claims experience using actuarial methods to estimate the future cost of claims and related expenses that have been reported but not settled and that have been incurred but not yet reported.

The self-insurance liabilities are included in “Accrued liabilities” in the consolidated balance sheets and wer e $ 21.0 million and $ 16.2 million as of December 31, 2023 and 2022, respectively.

The self-insurance liabilities are included in “Accrued and other current liabilities” in the consolidated balance sheets and wer e $ 23.9 million and $ 21.0 million as of December 31, 2024 and 2023, respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Defined Contribution Plans

The Company operates defined contribution plans covering its non-union employees and certain union employees.

The plans allow for employee salary deferrals, which are matched at the Company’s discretion.

Total employer contribution expense attributable to defined contribution plans was $ 10.3 million , $ 8.5 million and $ 7.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Dover Downs Defined Benefit Pension Plan

The Company sponsors a non-contributory, tax qualified defined benefit pension plan that has been frozen since July 2011.

As of December 31, 2024 and 2023, the benefit obligation was $ 16.1 million and $ 16.9 million, respectively, and the fair value of plan assets were $ 17.2 million and $ 16.5 million, respectively.

The Company did not make any contributions to the plan during the year ended December 31, 2024 and does not expect to contribute in 2025.

Net periodic benefit income and total income recognized in other comprehensive loss for the year ended December 31, 2024 were $ 0.4 million and $ 1.2 million, respectively.

Amounts relating to the plan recognized in the consolidated balance sheets as of December 31, 2024 and 2023 consist of non-current assets of $ 1.1 million and non-current liabilities of $ 0.5 million, respectively.

During the year ended December 31, 2023, a settlement was recognized under the Dover Downs Defined Benefit Pension Plan as the total amount of lump sum benefit payments was greater than the sum of the service and interest costs for the fiscal year.

The settlement reduced the Company’s benefit obligation by $ 3.4 million and reduced total income recognized in other comprehensive income for the year by $ 0.2 million.

Share-Based Compensation

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The Company generates revenue from four principal sources:

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

gaming (which includes retail gaming, online gaming, sports betting and racing), hotel, food and beverage, licensing and retail, entertainment and other.

Refer to Note 6 “ Revenue Recognition ” for further information.

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 consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021 were $ 178.7 million, $ 174.7 million and $ 60.8 million, 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 CONSOLIDATED FINANCIAL STATEMENTS

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 certain marketing costs directly associated with the Company’s iGaming products and services.

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.

Advertising Expenses

The Company expenses advertising costs as incurred.

For the years ended December 31, 2023, 2022 and 2021, advertising expense was $ 19.0 million , $ 26.8 million and $ 7.5 million, respectively, and are included in “General and administrative” on the consolidated statements of operations.

Advertising expenses, including production and agency fees of campaigns, for the years ended December 31, 2024, 2023 and 2022, advertising expense was $ 12.2 million, $ 19.0 million and $ 26.8 million, respectively, are included in “General and administrative” on the consolidated statements of operations.

Additionally, the Company incurred certain advertising and marketing costs directly associated with the Company’s iGaming products and services of $ 170.1 million, $ 178.7 million and $ 174.7 million during the years ended December 31, 2024, 2023 and 2022, respectfully.

These costs are included within Gaming expenses in the consolidated statements of operations.

Interest Expense, Net

Interest expense, net is comprised of interest costs for the Company’s debt, amortization of debt issuance costs and debt discounts, net of interest income and amounts capitalized for construction projects, realized changes in fair value relating to interest rate derivative contracts designated as cash flow hedges and lease payments associated with the Company’s financing obligation.

Interest expense, net is comprised of interest costs for the Company’s debt, amortization of debt issuance costs and debt discounts, interest costs associated with the Company’s deferred payable arrangements, net of interest income earned on the note receivable (refer to Note 8, Dispositions), amounts capitalized for construction projects, realized changes in fair value relating to interest rate derivative contracts designated as cash flow hedges, and lease payments associated with the Company’s financing obligation during the years ended December 31, 2023 and 2022.

The Company prepares its income tax provision in accordance with ASC 740, Income Taxes .

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The consolidated financial statements reflect expected future tax consequences of uncertain tax positions presuming the taxing authorities’ full knowledge of the position and all relevant facts.

Earnings (Loss) Per Share

Basic earnings (loss) per common share is calculated in accordance with ASC 260, Earnings Per Share , which requires entities that have issued securities other than common stock that participate in dividends with common stock (“participating securities”) to apply the two-class method to compute basic earnings (loss) per common share.

The two-class method is an earnings allocation method under which basic earnings (loss) per common share is calculated for each class of common stock and participating security as if all such earnings had been distributed during the period.

To calculate basic earnings (loss) per share, the earnings allocated to common shares is divided by the weighted average number of common shares outstanding, contingently issuable warrants and RSUs, RSAs and PSUs for which no future service is required as a condition to the delivery of the underlying common stock (collectively, basic shares).

Loss Per Share

Basic loss per common share is calculated in accordance with ASC 260, Earnings Per Share , which requires entities that have issued securities other than common stock that participate in dividends with common stock (“participating securities”) to apply the two-class method to compute basic loss per common share.

The two-class method is an earnings allocation method under which basic loss per common share is calculated for each class of common stock and participating security as if all such earnings had been distributed during the period.

To calculate basic loss per share, the earnings allocated to common shares is divided by the weighted average number of common shares outstanding, contingently issuable warrants and RSUs, RSAs and PSUs for which no future service is required as a condition to the delivery of the underlying common stock (collectively, basic shares).

Foreign Currency

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Gains or losses from foreign currency remeasurements that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in “Other non-operating income (expense), net” on the consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Income (Loss)

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Treasury stock is included in authorized and issued shares but excluded from outstanding shares.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTY TRANSACTIONS

In the fourth quarter of 2024, the Company completed the sale of portions of its international interactive business in Asia and certain other international markets in its International Interactive reportable segment (the “Carved-Out Business”) to a company (the “Buyer”) formed by members of management of the Carved-Out Business (refer to Note 8, “Dispositions”).

The Company purchased a warrant, representing a 19.99 % fully diluted equity interest in the Carved-Out Business, which as a result is an unconsolidated entity accounted for under the equity method and is considered to be a related party under ASC 850.

Revenues generated from this equity method investee are included in “Non-gaming revenue” and were $ 6.9 million for the year ended December 31, 2024.

Receivables from this equity method investee are included in Accounts receivable, net and were $ 1.1 million as of December 31, 2024.

In connection with the disposal of the Carved-Out Business, the Company entered into a seven-year term loan with the Buyer for a principal amount of € 30 million, subject to applicable interest.

As of December 31, 2024, the Company has a loan receivable of approximately $ 31.2 million included in Other assets within the consolidated balance sheets, and has recorded interest income of $ 0.5 million included within Interest expense, net in the consolidated statements of operations during the year ended December 31, 2024.

CONSOLIDATED FINANCIAL INFORMATION

General and Administrative Expense

Amounts included in General and administrative for the years ended December 31, 2023, 2022 and 2021 were as follows:

Amounts included in General and administrative expense for the years ended December 31, 2024, 2023 and 2022 were as follows:

Year Ended December 31,

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Advertising, general and administrative $ 957,118 $ 888,787 $ 776,226

Diamond Sports Group non-cash liability (1)

Acquisition and integration

Restructuring 31,014 — —

Contract termination — — 30,000

24,729 49,292 49,480

Restructuring charges, net

17,921 31,014 —

Loss on disposal of business (1)

Merger costs (2)

Diamond Sports Group non-cash settlement (3)

1,114 144,883 —

Total general and administrative $ 1,043,486 $ 1,113,976 $ 825,706

__________________________________

(1) Refer to Note 8 “Dispositions” for further information.

(2) Refer to Note 1 “General Information” and Note 25 “Subsequent Events” for further information.

(3) Refer to Note 22 “ Commitments and Contingencies ” for further information.

Interest Expense, Net

Amounts included in Interest expense, net for the years ended December 31, 2024, 2023 and 2022 were as follows:

Year Ended December 31,

(in thousands) 2024 2023 2022

Interest income

$ 20,718 $ 6,099 $ 616

Interest expense

( 310,347 ) ( 283,660 ) ( 208,769 )

Total interest expense, net

$ ( 289,629 ) $ ( 277,561 ) $ ( 208,153 )

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Non-Operating Income (Expense)

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(in thousands) 2024 2023 2022

Change in value of commercial rights liabilities $ ( 7,716 ) $ 32,577 $ 17,029

Net gain on equity method investments 4,255 — —

(Adjustment) gain on bargain purchases — ( 107 ) 22,841

Gain (loss) on extinguishment of debt 4,044 — ( 103,007 )

Foreign exchange (loss) gain ( 11,019 ) 516 ( 33,461 )

Change in value of performance warrants

$ ( 13,965 ) $ ( 7,716 ) $ 32,577

Net (loss) gain on equity method investments

( 1,850 ) 4,255 —

Foreign exchange gain (loss)

10,271 ( 11,019 ) 516

Other, net 999 2,294 13,599

Total other non-operating (expense) income, net $ ( 4,545 ) $ ( 12,186 ) $ 46,692

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Standards Implemented

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The amendments in this update address diversity in practice and inconsistency related to recognition of an acquired contract liability and the effect of payment terms on subsequent revenue recognition for the acquirer.

This update is effective for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, with early adoption permitted.

The Company’s adoption of this ASU in the first quarter of 2023 did not have a material impact on its consolidated financial statements.

In December 2022, the FASB issued ASU No.

2022-06, Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 .

The amendments in this update defer the sunset date of Topic 848, which applies to entities which have transactions that reference LIBOR or other reference rates which are expected to be discontinued due to reference rate reform, until December 31, 2024.

The Company’s adoption of this ASU in the second quarter of 2023 did not have a material impact on its consolidated financial statements.

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

The amendments in this update enhance the disclosures required for significant segment expenses on an annual and interim basis.

The guidance will apply retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024.

The Company adopted the ASU as of December 31, 2024.

Refer to Note 23 “ Seg ment Reporting ” for further information.

Standards to Be Implemented

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

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

The amendments in this update enhance the disclosures required for significant segment expenses on an annual and interim basis.

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

In December 2023, the FASB issued ASU No.

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

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 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.

In March 2024, the FASB issued ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements .

This amendment to the Codification removes references to various Concepts Statements.

This update will be effective for public business entities for fiscal years beginning after December 15, 2024, with early adoption permitted if adopted as of the beginning of the fiscal year that includes that interim period.

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

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The amendments in this update require disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements.

This update will be effective for fiscal years beginning after December 15, 2026, and interim reporting periods in fiscal years beginning after December 15, 2027, with early adoption permitted.

The disclosures required under the guidance can be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all periods presented in the financial statements.

The Company is currently evaluating the impact that this guidance will have on its financial statement disclosures.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers , (“ASC 606”) 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 five principal sources:

(1) gaming (which includes retail gaming, online gaming, sports betting and racing), (2) hotel, (3) food and beverage, (4) licensing and (5) retail, entertainment and other.

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.

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

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.

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.

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 December 31, 2023 and 2022.

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 December 31, 2023 and 2022, 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.

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.

Online gaming revenue includes the online bingo and casino revenue of Gamesys since the date of acquisition, beginning October 1, 2021.

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 year ended December 31, 2023 and 2022.

Deferred revenue associated with third-party operators for online sports betting and iGaming market access was $ 3.7 million and $ 4.1 million as of December 31, 2023 and 2022, respectively, and is included in “Accrued liabilities” and “Other long-term liabilities” in the 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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-gaming Revenue

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

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

Advance deposits for hotel rooms are recorded as liabilities until revenue recognition criteria are met.

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 consolidated statements of operations.

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.

Certain operations within the Company’s Casinos & Resorts and North America Interactive reportable segment act as an agent in operating gaming services on behalf of the state in which they are licensed.

At these respective casino properties, gaming 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 recorded revenue from its operations in these states on a net basis, which represents the percentage share entitled to the Company.

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 years ended December 31, 2024, 2023 and 2022:

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$ 174,267 $ 186,649 $ 168,211

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.

Non-gaming Revenue

Performance Obligations

Hotel, food and beverage, licensing 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, licensing and retail, entertainment and other, is the net amount collected from the customer for such goods and services or under the license agreement.

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.

Revenue Recognition

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

Advance deposits for hotel rooms are recorded as liabilities until revenue recognition criteria are met.

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

Licensing revenue is recognized under the sales-and usage-based royalty exception available in ASC 606 for licenses of intellectual property whereby revenue is recognized in the period that the underlying sale or usage occurs as the fees due to the Company are contingent and based on the customer’s usage of the intellectual property.

BALLY’S CORPORATION

5 unchanged sentences

Food and beverage 134,853 360 — 135,213

Licensing — 6,861 — 6,861

Retail, entertainment and other 71,206 8,516 28,321 108,043

13 unchanged sentences

Total revenue $ 1,227,563 $ 946,442 $ 81,700 $ 2,255,705

Revenue included in operations from Bally’s Golf Links from the date of its acquisition, September 12, 2023, is reported in the Casinos & Resorts segment and was $ 1.4 million.

Revenue included in operations from Casino Secret from the date of its acquisition, January 5, 2023, is reported in the International Interactive segment and was $ 36.4 million.

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

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 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 $ 41.3 million and $ 38.5 million as of December 31, 2024 and 2023, respectively.

1 unchanged sentence

liabilities for loyalty programs, advance deposits made for goods and services yet to be provided and unpaid wagers.

All of the contract liabilities are short-term in nature and are included in “Accrued liabilities” in the consolidated balance sheet.

All of the contract liabilities are short-term in nature and are included in “Accrued and other current liabilities” in the consolidated balance sheet.

Loyalty program incentives earned by customers are typically redeemed within one year from when they are earned and expire if a customer’s account is inactive for more than 12 months;

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

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.

14 unchanged sentences

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, and will be remeasured quarterly, with fair value adjustments recognized in earnings, until the contingencies are resolved.

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.

1 unchanged sentence

Cash paid by the Company at closing net of $ 1.7 million cash acquired, was $ 146.5 million, excluding transaction costs.

In connection with the acquisition of Tropicana Las Vegas, the Company entered into a lease arrangement with GLPI to lease the land underlying the Tropicana Las Vegas property for an initial term of 50 years at annual rent of $ 10.5 million.

Bally’s Quad Cities - On June 14, 2021, the Company completed its acquisition of Bally’s Quad Cities.

Pursuant to the terms of the Equity Purchase Agreement, the Company acquired all of the outstanding equity securities of The Rock Island Boatworks, Inc., for $ 118.9 million in cash.

Cash paid by the Company, net of $ 2.9 million cash acquired and the $ 4.0 million deposit paid in the third quarter of 2020, was $ 112.0 million, excluding transaction costs.

Bally’s Evansville - On June 3, 2021, the Company completed its acquisition of Bally’s Evansville for $ 139.7 million.

Cash paid by the Company at closing, net of $ 9.4 million cash acquired, was $ 130.4 million, excluding transaction costs.

In connection with the acquisition of the Bally’s Evansville casino operations, the Company entered into a sale-leaseback arrangement with an affiliate of GLPI for the Bally’s Dover property.

In connection with the acquisition of Tropicana Las Vegas, the Company’s indirect subsidiary, Tropicana Las Vegas, Inc., entered into a lease arrangement with GLPI to lease the land underlying the Tropicana Las Vegas property for an initial term of 50 years at annual rent of $ 10.5 million.

On August 28, 2024, GLPI and Tropicana Las Vegas, Inc.

entered into the First Amendment to Ground Lease to provide a funding mechanism for certain hard constructions costs with respect to the demolition, site preparation, and build out of certain portions of the leased property.

Refer to Note 18 “Leases” for further information.

Bally’s Lake Tahoe - On April 6, 2021, the Company completed its acquisition of Bally’s Lake Tahoe for $ 14.2 million.

The deferred purchase price is included within “Accrued liabilities” of the consolidated balance sheet as of December 31, 2021 and was paid in April 2022.

BALLY’S CORPORATION

2 unchanged sentences

Acquired during the year ended December 31, 2023 2022

(in thousands) Bally’s Golf Links Tropicana Las Vegas Bally’s Quad Cities Bally’s Evansville Bally’s Lake Tahoe

Preliminary (6)

(in thousands) Bally’s Golf Links Tropicana Las Vegas

Total current assets $ 1,108 $ 7,924

2 unchanged sentences

Goodwill 103,824 8,794

Intangible assets, net (1) to (5)

6,500 5,140 31,180 154,210 5,430

Intangible assets, net (1)(2)

Other assets 2,000 766

2 unchanged sentences

Other long-term liabilities — ( 395 )

Net assets acquired 113,800 148,216 118,928 160,564 16,114

Bargain purchase gain — — — ( 20,856 ) ( 1,942 )

Total purchase price $ 113,592 $ 148,216

2 unchanged sentences

(2) Tropicana Las Vegas intangible assets include rated player relationships, a trade name and pre-bookings of $ 2.6 million, $ 1.7 million and $ 0.8 million, respectively, which are being amortized on a straight-line basis over their estimated useful lives of approximately 9 years, 3 years and 2 years, respectively.

(3) Bally’s Quad Cities’ intangible assets include gaming licenses of $ 30.3 million with an indefinite life, as well as rated player relationships and a trade name of $ 0.7 million and $ 0.2 million, respectively, which are being amortized on a straight-line basis over their estimated useful lives of approximately nine years and four months , respectively.

(4) Bally’s Evansville’s intangible assets include gaming licenses of $ 153.6 million with an indefinite life and rated player relationships of $ 0.6 million which are being amortized on a straight-line basis over an estimated useful life of approximately eight years .

(5) Bally’s Lake Tahoe’s intangible assets include gaming licenses of $ 5.2 million with an indefinite life and a trade name of $ 0.2 million, which are being amortized on a straight-line basis over its estimated useful life of approximately six months .

(6) The Company recorded adjustments to the preliminary purchase price allocation during the year ended December 31, 2023 which increased goodwill and the total purchase price by $ 2.6 million.

(7) The Company recorded adjustments to the preliminary purchase price allocation during the year ended December 31, 2023 which decreased total current assets by $ 0.2 million, increased goodwill by $ 0.2 million, decreased total current liabilities by $ 0.1 million and increased the total purchase price by $ 0.1 million.

(8) The Company recorded immaterial adjustments to purchase price allocations for 2021 acquisitions during the year ended December 31, 2022.

(3) The Company recorded adjustments to the preliminary purchase price allocation during the year ended December 31, 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 an organized workforce and expected synergies from integrating the properties into the Company’s casino portfolio and future development of its omni-channel strategy.

During the year ended December 31, 2021, the Company recorded bargain purchase gains related to Bally’s Evansville and Bally’s Lake Tahoe of $ 20.9 million and $ 2.0 million, respectively.

During the year ended December 31, 2022, based on the final purchase price allocation for Bally’s Lake Tahoe, an adjustment of $ 0.1 million was recorded reducing the bargain purchase gain to $ 1.9 million.

The Company incurred $ 0.2 million, $ 1.1 million and $ 3.9 million of acquisition costs related to the above Casinos & Resorts acquisitions during the years ended December 31, 2024, 2023 and 2022, respectively.

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

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

International Interactive Acquisition

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Cash paid by the Company, net of $ 8.3 million cash acquired, was $ 38.7 million, excluding transaction costs.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the International Interactive acquisition:

(in thousands) Casino Secret

Preliminary (2)

Total current assets $ 8,862

6 unchanged sentences

(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 recorded adjustments to the preliminary purchase price allocation during the year ended December 31, 2023 which decreased right of use assets and corresponding lease liabilities by $ 0.4 million , increased goodwill by $ 0.3 million , decreased total current liabilities by $ 0.8 million , and increased the total purchase price by $ 1.1 million .

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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

2 unchanged sentences

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

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

North America Interactive Acquisitions

During 2021, the Company completed six acquisitions within its North America Interactive segment for an aggregate net investment of $ 400.3 million.

The Company paid cash $ 128.8 million, net of cash acquired.

Total non-cash consideration was $ 255.7 million, which included $ 58.7 million of the fair value of contingent consideration representing the issuance of Company shares if certain post-closing performance targets are met and contingent penny warrants to purchase additional Company common shares based on future operations in certain jurisdictions.

In connection with one of the North America Interactive acquisitions, the Company recorded a 15.84 % non-controlling interest representing shares convertible into shares of Bally’s common stock based on a fixed exchange ratio share-settlement feature, valued using the Company’s common stock price, classified as permanent equity.

During the year ended December 31, 2022, certain selling shareholders exercised their right to convert to Bally’s common stock reducing the non-controlling interest.

Earnings attributable to the non-controlling interest are not material for the years ended December 31, 2023, 2022 and 2021.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the North America Interactive Acquisitions:

(in thousands) Final (2)

Cash and cash equivalents $ 8,689

Accounts receivable, net 4,498

Prepaid expenses and other current assets

Property and equipment, net 596

Intangible assets, net (1)

Total current liabilities

Deferred tax liability ( 15,811 )

Acquired non-controlling interest ( 3,760 )

Net investment in North America Interactive Acquisitions

__________________________________

(1) Include customer relationships of $ 41.5 million, which are being amortized over estimated useful lives between three and ten years , developed software of $ 122.4 million, which is being amortized over estimated useful lives between three and ten years , and trade names of $ 3.1 million, which are being amortized over estimated useful lives between 10 and 15 years.

(2) The Company recorded immaterial adjustments to the purchase price allocation during the year ended December 31, 2022.

Total goodwill recorded in connection with the North America Interactive Acquisitions was $ 250.7 million, of which $ 102.9 million is deductible for local tax purposes.

Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill, which consist primarily of benefits from acquiring a talented technology workforce and management team experienced in the online gaming industry, and securing buyer-specific synergies expected to contribute to the Company’s omni-channel strategy which are expected to increase revenue and profits within the Company’s North America Interactive reportable segment.

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

The Company incurred $ 3.9 million and $ 5.3 million of transaction costs related to the North America Interactive Acquisitions in the years ended December 31, 2022 and 2021, respectively.

The Company did not incur any costs related to the North America Interactive Acquisitions in the year ended December 31, 2023.

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

Gamesys Acquisition

On October 1, 2021, the Company completed the acquisition of Gamesys.

Total consideration was $ 2.60 billion, which consisted of $ 2.08 billion paid in cash and 9,773,537 shares of Bally’s common stock.

Cash paid by the Company at closing, net of cash received of $ 183.3 million and a $ 10.3 million post-acquisition expense, explained below, was $ 1.90 billion, excluding transaction costs.

During the year ended December 31, 2022, the Company incurred $ 6.3 million of transaction costs related to the acquisition of Gamesys compared to $ 43.5 million during the year ended December 31, 2021.

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

Certain unvested and outstanding equity options held by Gamesys employees were discretionarily accelerated and vested by the Gamesys Board of Directors, requiring allocation of the fair value of post-acquisition service to purchase consideration, with the remainder allocated to non-recurring post-acquisition expense.

The fair value of $ 36.4 million was attributed to pre-acquisition service and included in consideration transferred.

In the fourth quarter of 2021, the fair value of $ 10.3 million, attributable to post-acquisition expense was recorded within “General and administrative” expense in the consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the acquisition of Gamesys as of October 1, 2021:

(in thousands) Final (2)

Cash and cash equivalents and restricted cash $ 183,306

Accounts receivable, net 35,851

Prepaid expenses and other current assets

Property and equipment, net 15,230

Right of use assets, net 14,185

Intangible assets, net (1)

Other assets 17,668

Accounts payable ( 47,881 )

Accrued income taxes ( 40,250 )

Accrued liabilities ( 180,237 )

Long-term debt, net ( 456,469 )

Lease liabilities ( 14,185 )

Deferred tax liability ( 143,924 )

Other long-term liabilities ( 6,680 )

Total purchase price

__________________________________

(1) Intangible assets include customer relationships of $ 980.2 million and developed technology of $ 282.0 million, both of which are being amortized over seven years , and trade names of $ 247.1 million, which have indefinite lives.

(2) During the year ended December 31, 2022, the Company recorded adjustments to the purchase price allocation including a $ 0.5 million increase to prepaid expenses and other current assets, a $ 5.3 million increase to goodwill, a $ 2.7 million decrease to intangible assets, net and a $ 3.1 million increase to accrued liabilities.

Goodwill associated with the Gamesys acquisition is assigned as of the acquisition date to the Company’s International Interactive and North America Interactive reportable segments in the amounts of $ 1.65 billion and $ 33.3 million, respectively, which include the reporting units expected to benefit from the synergies arising from the acquisition.

Goodwill recognized is not deductible for local tax purposes.

Revenue and net income included in operations from Gamesys reported in the Company’s International Interactive and North America Interactive reportable segments for the year ended December 31, 2021 was $ 257.1 million and $ 18.2 million, respectively.

Supplemental Pro Forma Consolidated Information

The following unaudited pro forma consolidated financial information for the twelve months ended December 31, 2021 combines the results of the Company for the year ended December 31, 2021 and the unaudited results of Bally’s Lake Tahoe, Bally’s Evansville and Gamesys for each period subsequent to their respective acquisition dates through December 31, 2021.

The revenue, earnings and pro forma effects of the Bally’s Interactive Acquisitions and Bally’s Quad Cities completed during the year ended December 31, 2021, and the acquisitions completed during the years ended December 31, 2023 and 2022 are not material to results of operations, individually or in the aggregate.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

These unaudited pro forma financial results are presented for informational purposes only and do not purport to be indicative of the operating results of the Company that would have been achieved had the acquisitions actually taken place on January 1, 2021.

In addition, these results are not intended to be a projection of future results and do not reflect events that may occur, including but not limited to revenue enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the acquisitions.

(in thousands, except per share data) Years Ended December 31, 2021

Revenue $ 2,221,870

Net income $ 46,048

ASSETS AND LIABILITIES HELD FOR SALE

The Company applies a criteria that must be met before an asset is classified as held for sale, including that management, with the appropriate authority, commits to a plan to sell the asset at a reasonable price in relation to its fair value and is actively seeking a buyer.

The Company recognizes assets held for sale at the lower of carrying value or fair market value less costs to sell, as estimated based on comparable asset sales, offers received, or a discounted cash flow model.

The Company then compares the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset.

If the undiscounted cash flows do not exceed the carrying value, then an impairment charge is recorded for any difference between fair value and the carrying value.

Due to an evaluation of the expected fair value less costs to sell during the year ended December 31, 2023, the Company recognized impairment charges of $ 9.4 million and $ 4.0 million on goodwill and intangible assets held for sale, respectively.

These charges have been accounted for within “ Impairment charges ” in the consolidated statements of operations.

As of December 31, 2022, one of the Company’s North America Interactive businesses met the criteria to be classified as assets held for sale but did not qualify as discontinued operations as it did not represent a strategic shift having a major effect on the Company’s operations and financial results.

As of December 31, 2023, the Company is still pursuing the plan to sell the business, however, it does not expect it will be completed within one year.

The major classes of assets and liabilities classified as held for sale as of December 31, 2023 and 2022 are as follows:

(in thousands) December 31, 2023 December 31, 2022

Restricted cash, prepaid expenses and other current assets $ 1,815 $ 3,756

Goodwill — 9,399

Intangible assets, net — 4,022

Assets held for sale (1)

$ 1,815 $ 17,177

Liabilities related to assets held for sale (1)(2)

$ 1,307 $ 3,409

__________________________________

(1) All assets and liabilities held for sale were classified as current as of December 31, 2023 and 2022.

(2) Liabilities related to assets held for sale were made up of accounts payable and accrued liabilities.

The revenues and net loss attributable to the business classified as held for sale were not significant for the years ended December 31, 2023 and 2022.

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

There were no acquisition costs related to the above International Interactive acquisition during the years ended December 31, 2024 and 2022.

During the fourth quarter of 2024, the Company completed the sale of the Carved-Out Business, as defined above, for total consideration of $ 32.9 million, which consisted of a € 30 million seven-year term note, subject to applicable interest (refer to Note 3 “Related Party Transactions” for further information).

The disposition includes the Company’s interest in various contracts with Breckenridge Curacao B.V.

(“Breckenridge”), which was previously determined to be a VIE was consolidated by the Company.

The Company disposed of net assets of approximately $ 56.2 million, which include the previously consolidated net assets of Breckenridge, and released foreign currency translation adjustments of $ 4.7 million.

Additionally, the Company held a net investment hedge on the net investment in the foreign operations sold, and thus released $ 9.1 million of accumulated other comprehensive income as a result of dedesignating the hedge as of the disposal date.

The Company recorded a pre-tax loss of approximately $ 27.8 million upon the sale, which is included in “General and administrative” in the consolidated statements of operations for the year ended December 31, 2024.

The net assets disposed of consisted primarily of goodwill of $ 20.7 million, and working capital including cash and cash equivalents of $ 4.2 million and restricted cash of $ 37.5 million, which consists of player related funds and funds held with payment service providers, net of liabilities.

Ownership of certain intellectual property previously owned by Bally’s and used by the Carved-Out Business has been transferred into an independent trust (“the Trust”).

The Trust licenses the use of such intellectual property to the Carved-Out Business under a new commercial license arrangement, with licensing fees paid to the Trust by the Buyer for a term of five years (subject to annual automatic extension) based on net gaming revenues of the Carved-Out Business.

Any proceeds generated from the Trust property are distributed to the Company by the Trust and are recognized as licensing revenue and included in “Non-gaming revenue” in the consolidated statements of operations, as development of iGaming capabilities remains a core part of Bally’s strategy.

Licensing revenue recognized by the Company was $ 6.9 million during the year ended December 31, 2024.

The Company and the Buyer also entered into agreements pursuant to which the Company agreed to provide the Carved-Out Business with certain transition and software services for a period of two years .

Income earned under these transitional service agreements is recognized in Total operating costs and expenses, as a reduction to the related expenses being passed through, in the consolidated statements of operations and was immaterial for the year ended December 31, 2024.

The Company evaluated the Trust to determine whether the entity meets the definition of a VIE under ASC 810 and concluded that the Trust is a VIE because the entity is formed with non-substantive voting rights.

The Company has determined that it is the primary economic beneficiary of the Trust because all of the residual returns of the Trust accrue to the Company under the purposes set out in the Trust deed.

Accordingly, under the application of ASC 810, the Company consolidates all of the assets, liabilities and results of operations of the Trust and its subsidiaries in the accompanying consolidated financial statements.

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

BALLY’S CORPORATION

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Services and license agreements $ 43,141 $ 33,182

Due from payment service providers 12,662 30,621

Prepaid insurance 12,181 6,374

Short term derivative assets 9,530 —

Gaming taxes and licenses 9,309 4,644

Taxes and licenses

18,988 19,973

Short term notes receivable

Prepaid marketing 11,952 8,685

Sales tax 7,565 5,900

Purse funds 7,412 6,404

Short term derivative assets 5,359 9,530

Prepaid insurance 3,341 8,366

Due from payment service providers — 12,662

Other 7,936 9,294

3 unchanged sentences

(in thousands) 2024 2023

Land $ 238,997 $ 259,378

Land improvements 162,211 31,197

Land and improvements

$ 49,553 $ 401,208

Building and improvements 370,086 673,071

7 unchanged sentences

__________________________________

(1) Depreciation expenses on property and equipment for the years ended December 31, 2023, 2022 and 2021 was $ 118.7 million, $ 71.7 million and $ 53.7 million, respectively.

(1) Depreciation expense on property and equipment for the years ended December 31, 2024, 2023 and 2022 was $ 158.0 million, $ 118.7 million and $ 71.7 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 (the “Permanent Chicago Site”) 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”).

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 would have possession of 777 West Chicago Avenue, Chicago, Illinois 60610 (the “Permanent Chicago Site”) 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 December 31, 2023.

The Company recorded the present value of the remaining payments of $ 47.7 million within “Accrued liabilities” with an offsetting increase to “Property and equipment, net” within the consolidated balance sheets as of December 31, 2023.

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

In the third quarter of 2024, as the result of a lease modification event, the Company derecognized $ 350.0 million of land relating to the site of the future Bally’s Chicago permanent facility.

Refer to Note 18 “ Leases ” for further information

BALLY’S CORPORATION

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GOODWILL AND INTANGIBLE ASSETS

2023 Interim Impairment

During the third quarter of 2023, the Company divested a component within the North America Interactive reporting unit.

This divestiture required a relative fair value goodwill allocation to the divested component and a quantitative test for impairment of the remaining North America Interactive reporting unit.

For the quantitative goodwill impairment test, the Company estimated the fair value of the reporting unit and asset group using both income and market-based approaches.

Specifically, the Company applied the discounted cash flow (“DCF”) method under the income approach and the guideline company under the market approach and weighted the results of the two valuation methodologies based on the facts and circumstances surrounding the reporting unit.

For the DCF method, the Company relied on the present value of expected future cash flows, including terminal value, utilizing a market-based weighted average cost of capital (“WACC”) determined separately for the reporting unit as of the valuation date.

The determination of fair value under the DCF method involved the use of significant estimates and assumptions, including revenue growth rates driven by future gaming activity, operating margins, capital expenditures, working capital requirements, tax rates, terminal growth rates, and discount rates.

For the market approach, the Company utilized a comparison of the reporting unit to comparable publicly-traded companies and transactions and, based on the observed earnings multiples, ultimately selected multiples to apply to the reporting unit.

The fair value of the North America Interactive reporting unit exceeded its carrying value and thus no impairment was recorded.

The Company allocated $ 4.2 million to the component that was divested, which was subsequently de-recognized.

2024 Annual Impairment Assessment

2 unchanged sentences

The reporting units for the North America Interactive and International Interactive operating segments are the operating segments.

The Company performed a quantitative test of goodwill for its International Interactive reporting unit and determined that the fair value of the reporting unit exceeded its carrying amount and thus, there was no impairment.

The estimated fair value of the reporting unit was determined through a combination of a discounted cash flow model and market-based approach, which utilized Level 3 inputs.

The Company performed a quantitative test of goodwill for its International Interactive reporting unit and one reporting unit within the Casinos and Resorts operating segment and determined that the fair value of the reporting units exceeded their respective carrying amounts and thus, there was no impairment.

The estimated fair value of the reporting units were determined through a combination of a discounted cash flow model and market-based approach, which utilized Level 3 inputs including future cash flow projections for the reporting units, terminal growth rates of 3 % and discount rates of 15 % and 11 %.

If future results significantly vary from current estimates and related projections, the Company may be required to record impairment charges.

For the North America Interactive reporting unit and all reporting units within the Casinos and Resorts segment with goodwill, the Company performed a qualitative analysis for the annual assessment of goodwill (commonly referred to as “Step Zero”).

For the North America Interactive reporting unit and all other reporting units within the Casinos and Resorts segment with goodwill, the Company performed a qualitative analysis for the annual assessment of goodwill (commonly referred to as “Step Zero”).

From a qualitative perspective, in evaluating whether it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, relevant events and circumstances are taken into account, with greater weight assigned to events and circumstances that most affect the fair value or the carrying amounts of its assets.

1 unchanged sentence

macroeconomic conditions, industry and market conditions and overall financial performance, and the most recent quantitative assessment performed for the reporting unit.

After assessing these and other factors, the Company determined that it was more likely than not that the fair value of the North America Interactive reporting unit all reporting units within the Casinos and Resorts segment exceeded their carrying amounts as of October 1, 2023.

After assessing these and other factors, the Company determined that it was more likely than not that the fair value of the reporting units subject to the qualitative assessment exceeded their carrying amounts as of October 1, 2024.

If future results vary significantly from current estimates and related projections, the Company may be required to record impairment charges.

In connection with the annual impairment test, the Company evaluated whether facts and circumstances surrounding its indefinite lived intangible assets remained appropriate.

For one indefinite lived trademark in the International Interactive segment, the Company determined that based on a combination of factors regarding the Company’s intended use of the trademark and future uncertainty, that a useful life of 7 years should be applied.

The change in useful life required the Company to perform a quantitative test for impairment of the trademark.

For four indefinite lived gaming licenses in the Casinos & Resorts segment, the Company determined it had an indicator of impairment based on declines in actual or projected results compared to those projected when the gaming 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.

Level 3 inputs to the valuation include estimating projected revenues and operating cash flows, including terminal growth rates between 2 % and 3 %, estimated construction costs, and pre-opening expenses and is discounted at a market-based weighted average cost of capital (“WACC”), which was between 10 % and 11 % for three licenses.

The fair values of three of the four gaming licenses were below their respective carrying values and the Company recorded a combined impairment loss of $ 38.6 million.

The fair value of the fourth gaming license exceeded its carrying value.

For all other indefinite lived intangible assets, the Company performed a qualitative assessment of impairment and determined that it was more likely than not that the fair values of all assets exceed their carrying values as of October 1, 2024.

If future results vary significantly from current estimates and related projections, the Company may be required to record impairment charges.

2024 Interim Impairment

During the fourth quarter of 2024, the Company divested a component within the International Interactive operating segment (refer to Note 8 “Dispositions” for further information).

As a result of this divestiture, the Company allocated goodwill on a relative fair value basis to the divested component which also triggered the need for an interim impairment assessment.

The Company estimated the fair value of the reporting units using both income and market-based approaches.

Specifically, the Company applied the discounted cash flow (“DCF”) method under the income approach.

The Company relied on the present value of expected future cash flows, including terminal value, utilizing a market-based WACC determined separately for the reporting unit as of the valuation date.

The determination of fair value under the DCF method involved the use of significant Level 3 inputs and assumptions, including revenue growth rates driven by expected future activity, operating margins, capital expenditures, working capital requirements, tax rates, terminal growth rates of 3 %, and a discount rate of 16 %.

The fair value of the International Interactive reporting unit exceeded its carrying value and thus no impairment was recorded.

The Company allocated $ 20.7 million to the component that was divested, which was subsequently de-recognized.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As a result of this divestiture, the Company identified a triggering event related to a long lived asset group within its International Interactive operating segment.

The triggering event was the result of the expected future cash flows of the asset group being below the carrying value of the long lived assets and therefore, a quantitative impairment analysis was performed.

The fair value of the intangible assets were determined using a relief from royalty method, which utilized Level 3 inputs and was exceeded by the carrying value, indicating an impairment.

Inputs to the valuation included revenue projections derived from the intangible assets, a discount rate of 16 % and royalty rates between 3 % and 12 %.

As a result of the analysis, the Company recorded an aggregate $ 197.5 million impairment charge in its International Interactive operating segment.

The Company allocated the loss first to intangible assets, in the amount of $ 125.9 million, and then the residual of $ 71.6 million to goodwill.

These charges are recorded within “Impairment charges” in the consolidated statements of operations.

2023 Annual Impairment Assessment

In 2023, the Company changed the useful life for one of its indefinite lived trademarks in the International Interactive segment which then required the Company to perform a quantitative test for impairment of the trademark.

The fair value of the trademark was determined using a relief from royalty method, which utilized Level 3 inputs and was exceeded by the carrying value, indicating an impairment.

Inputs to the valuation included revenue projections derived from the trademark, a discount rate of 15 % and a royalty rate of 3 %.

As such, the Company recorded an impairment loss within the International Interactive segment of $ 54.0 million related to this trademark intangible asset.

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These charges are recorded within “Impairment charges” in the consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For three indefinite lived gaming licenses in the Casinos & Resorts segment, the Company determined it had an indicator of impairment based on declines in results compared to those projected when the gaming licenses were originally valued at acquisition.

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 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 with level 3 inputs assuming the Company built a new casino with similar utility to that of the existing casino.

Level 3 inputs to the valuation include estimating projected revenues and operating cash flows, including terminal growth rates of 3 %, 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, which was 12.5 % for these three licenses.

The fair values of these gaming licenses were below their respective carrying values and the Company recorded an impairment loss of $ 76.7 million.

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In connection with the expansion of the Company’s restructuring plan announced on October 20, 2023 targeted at reshaping the technology utilized by its Interactive segments (refer to Note 16 “ Restructuring Expense ”), the Company recorded impairment charges of $ 5.7 million, related to certain technology intangible assets which will no longer be utilized.

As of December 31, 2023, the Bally’s Tiverton, Bally’s Dover and Hard Rock Biloxi reporting units within the Company’s Casinos & Resorts reportable segment had negative carrying amounts of net assets.

Goodwill assigned to these reporting units as of December 31, 2023 were $ 0.4 million, $ 1.0 million and $ 48.9 million, respectively.

2023 Interim Impairment

During the third quarter of 2023, the Company divested a component within the North America Interactive reporting unit.

This divestiture required a relative fair value goodwill allocation to the divested component and a quantitative test for impairment of the remaining North America Interactive reporting unit.

For the quantitative goodwill impairment test, the Company estimated the fair value of the reporting unit and asset group using both income and market-based approaches.

Specifically, the Company applied the DCF method under the income approach and the guideline company under the market approach and weighted the results of the two valuation methodologies based on the facts and circumstances surrounding the reporting unit.

For the DCF method, the Company relied on the present value of expected future cash flows, including terminal value, utilizing a market-based WACC determined separately for the reporting unit as of the valuation date.

The fair value of the North America Interactive reporting unit exceeded its carrying value and thus no impairment was recorded.

The Company allocated $ 4.2 million to the component that was divested, which was subsequently de-recognized.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2022 Impairment Assessment

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The Company recorded an impairment loss within the International Interactive segment of $ 73.3 million related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition.

The fair value of the trademark was determined using a relief from royalty method, which utilized Level 3 inputs and included revenue projections derived from the trademark, a discount rate of 14.5 %, royalty rate of 3 %, and a terminal growth rate of 3 %.

These charges are recorded within “Impairment charges” in the consolidated statements of operations.

2021 Trade Name Impairment

During the second quarter of 2021, the Company committed to rebrand a majority of its casino portfolio with Bally’s trade name.

In connection with this rebranding initiative, the Company determined it should complete an interim quantitative impairment test of its trade names at Bally’s Dover and Bally’s Black Hawk.

As a result of the analysis, the Company recorded an impairment charge of $ 4.7 million during the three months ended June 30, 2021 recorded within “ Impairment charges ” on the consolidated statements of operations within the Casinos & Resorts reportable segment.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The change in carrying value of goodwill by reportable segment for the years ended December 31, 2024 and 2023 is as follows:

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

(in thousands) Casinos & Resorts (3)

International Interactive North America Interactive Total

Goodwill as of December 31, 2022 (1)

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Goodwill from current year business combinations 104,032 18,422 — 122,454

Impairment charges — — ( 231,569 ) ( 231,569 )

Effect of foreign exchange — 70,963 184 71,147

Purchase accounting adjustments on prior year business combinations 204 — — 204

Transferred to assets held for sale (2)

— — ( 9,399 ) ( 9,399 )

Current year divestiture — — ( 4,204 ) ( 4,204 )

Goodwill as of December 31, 2023 (1)(3)

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Goodwill from current year business combinations — 1,176 — 1,176

Impairment charges — ( 71,636 ) — ( 71,636 )

Effect of foreign exchange — ( 44,200 ) ( 334 ) ( 44,534 )

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__________________________________

(1) Amounts are shown net of accumulated goodwill impairment charges of $ 5.4 million for Casinos and Resorts.

(2) Goodwill transferred to assets held for sale consists of $ 100.6 million of goodwill and $ 91.2 million of accumulated impairment.

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

(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.

(2) Amounts are shown net of accumulated goodwill impairment charges of $ 5.4 million, $ 71.6 million, and $ 140.4 million, for Casinos & Resorts, International Interactive and North America Interactive, respectively.

(3) As of December 31, 2024 and 2023, amounts shown include $ 59.2 million and $ 50.4 million of goodwill associated with reporting units with negative carrying value, respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The change in intangible assets, net for the years ended December 31, 2024 and 2023 is as follows (in thousands):

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Other intangibles acquired (1)

Transferred to assets held for sale ( 4,022 )

Accumulated amortization ( 231,713 )

Intangible assets, net as of December 31, 2023 $ 1,871,428

Intangible assets from current year business combinations 35,971

Effect of foreign exchange 46,926

Impairment charges ( 164,486 )

Derecognition of Commercial rights - Sinclair

Internally developed software 48,392

Effect of foreign exchange ( 24,871 )

Other intangibles acquired 3,059

Intangible assets disposed

Accumulated amortization ( 221,533 )

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Amortizable intangible assets:

Commercial rights - Sinclair (1)

7.2 $ 315,847 $ ( 89,901 ) $ 225,946

Trade names 5.8 37,042 ( 18,125 ) 18,917

Hard Rock license 23.5 8,000 ( 2,303 ) 5,697

Customer relationships 4.1 $ 660,005 $ ( 272,333 ) $ 387,672

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Gaming licenses 5.6 47,797 ( 19,864 ) 27,933

Trade names 7.0 31,723 ( 18,032 ) 13,691

Hard Rock license 22.5 8,000 ( 2,545 ) 5,455

Other 9.6 11,473 ( 4,918 ) 6,555

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Total intangible assets, net $ 1,721,899 $ ( 414,556 ) $ 1,307,343

__________________________________

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

Refer to Note 14 “Strategic Partnership - Sinclair Broadcast Group” for further information.

remaining life

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Amortizable intangible assets:

Customer relationships 4.8 $ 974,286 $ ( 314,053 ) $ 660,233

Commercial rights - Sinclair (1)

7.2 315,847 ( 89,901 ) 225,946

Trade names 2.7 17,750 ( 16,196 ) 1,554

Hard Rock license 24.5 8,000 ( 2,061 ) 5,939

Customer relationships 5.8 907,199 ( 166,155 ) 741,044

Developed technology 4.8 267,927 ( 86,119 ) 181,808

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Gaming licenses 6.4 45,008 ( 11,964 ) 33,044

Trade names 5.8 37,042 ( 18,125 ) 18,917

Hard Rock license 23.5 8,000 ( 2,303 ) 5,697

Other 9.9 11,505 ( 3,621 ) 7,884

7 unchanged sentences

__________________________________

(2) See note (1) above.

Amortization of intangible assets was approximately $ 231.7 million, $ 228.9 million and $ 91.1 million for the years ended

(1) Commercial rights intangible asset in connection with Framework Agreement15 “ Strategic Partnership - Sinclair Broadcast Group ” for further information.

Amortization of intangible assets was approximately $ 221.5 million, $ 231.7 million and $ 228.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023, 2022 and 2021, respectively.

Refer to Note 6 “ Business Combinations ” for further information about the preliminary purchase price allocation and provisional goodwill and intangible balances added from current year business combinations.

Refer to Note 7 “ Business Combinations ” for further information about the goodwill and intangible balances added from business combinations.

Refer to Note 15 “ Strategic Partnership - Sinclair Broadcast Group ” for intangible assets added through the Framework Agreement.

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The Company utilizes derivative instruments in order to mitigate interest rate and currency exchange rate risk in accordance with its financial risk and liability management policy.

During the year ended December 31, 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.

The fair value on the settlement date is recorded as a component of accumulated other comprehensive income (loss), which will be reclassified into “Interest expense, net” in the consolidated statements of operations in the same period in which the hedged interest payments associated with the Company’s borrowings are recorded.

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.

During the year ended December 31, 2023, the Company entered into a series of interest rate contracts and cross currency swap derivative transactions with multiple bank counterparties in order to synthetically convert a notional aggregate amount of $ 500.0 million of the Company’s USD denominated variable rate Term Loan Facility, as disclosed in Note 17 “ Long-Term Debt ,” into fixed rate debt over five years and $ 200 million of the Term Loan Facility, to an equivalent GBP denominated floating rate instrument over three years.

These contracts mature in October, 2028 and 2026, respectively.

Derivative Instruments Designated as Hedging Instruments

Net Investment Hedges

Cross Currency Swaps - The Company is exposed to fluctuations in foreign exchange rates on investments it holds in its European foreign entities.

Cross Currency Swaps

Net Investment Hedges - The Company is exposed to fluctuations in foreign exchange rates on investments it holds in its European foreign entities.

The Company uses fixed and fixed-cross-currency swaps to hedge its exposure to changes in the foreign exchange rate on its foreign investment in Europe and their exposure to changes in the EUR-GBP exchange rate.

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Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency-fixed-rate payments over the life of the agreement.

These derivative arrangements qualify as net investment hedges under ASC 815, with the gain or loss resulting from changes in the spot value of the derivative reported in other comprehensive income (loss).

These derivative arrangements qualified as net investment hedges under ASC 815, with the gain or loss resulting from changes in the spot value of the derivative reported in other comprehensive income (loss).

Amounts are reclassified out of other comprehensive income (loss) into earnings when the hedged net investment is either sold or substantially liquidated.

Additionally, the accrual of foreign currency and USD denominated coupons will be recognized in “Interest expense, net” in the consolidated statements of operations.

During the year ended December 31, 2023, the Company recognized $ 1.35 million of related expense.

Refer to Note 12 “ Fair Value Measurements ” and Note 19 “ Stockholders’ Equity ” for further information.

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

Net Investment Hedges Notional Sold Notional Purchased

Cross currency swaps € 461,595 £ 387,531

Cross currency swaps £ 546,759 $ 700,000

Additionally, the accrual of foreign currency and USD denominated coupons are recognized in “Interest expense, net” in the consolidated statements of operations.

Economic Hedges - During the fourth quarter of 2024, as a result of the sale of the Carved-Out Business, the Company dedesignated its EUR-GBP cross currency swaps as net investment hedges and began recording changes in fair value of the derivative and the accrual of foreign currency and USD denominated coupons through earnings reported in Other non-operating income (expense), net in the consolidated statements of operations.

At the time of dedesignation, the total amount of accumulated other comprehensive loss was $ 9.1 million and was recorded as part of Loss on disposal of business in General and administrative expenses in the consolidated statements of operations.

Refer to Note 8 “ Dispositions ,” Note 13 “ Fair Value Measurements ” and Note 20 “ Stockholders’ Equity ” for further information.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables summarize the Company’s cross currency swap arrangements as of December 31, 2024 and 2023 (in thousands):

December 31, 2024 December 31, 2023

Hedge Designation

Notional Sold Notional Purchased Hedge Designation

Notional Sold Notional Purchased

Cross currency swaps Economic Hedge € 461,595 £ 387,531 Net Investment Hedge € 461,595 £ 387,531

Cross currency swaps Net Investment Hedge £ 546,759 $ 700,000 Net Investment Hedge £ 546,759 $ 700,000

Cash Flow Hedges

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The changes in the fair value of these instruments are recorded as a component of accumulated other comprehensive income (loss) and reclassified into “Interest expense, net” in the consolidated statements of operations in the same period in which the hedged interest payments associated with the Company’s borrowings are recorded.

During the year ended December 31, 2023, the Company recognized $ 1.95 million of related expense.

Refer to Note 13 “ Fair Value Measurements ” and Note 20 “ Stockholders’ Equity ” for further information.

The following tables summarize the Company’s cash flow hedges as of December 31, 2023 (in thousands):

Cash Flow Hedges Notional Amount Index Cap Floor (1)

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

December 31, 2024 December 31, 2023

Cash Flow Hedges Index Notional Amount Cap Floor (1)

Notional Amount Cap Floor (1)

Interest rate contracts - swaps US - SOFR $ 1,500,000 — % — % $ 500,000 — % — %

2 unchanged sentences

(1) Weighted average rate.

Economic Hedges

The Company utilizes short term operational hedges or forward currency exchange rate contracts to mitigate foreign currency exchange rate risk.

These instruments are not designated as hedging instruments under ASC 815.

The fair value of these instruments are recorded as derivative assets or liabilities on the consolidated balance sheets with changes in fair value recognized in earnings within “Other non-operating income, net” on the consolidated statements of operations.

FAIR VALUE MEASUREMENTS

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Restricted cash Restricted cash 60,021 — —

Convertible loans Other assets — — 4,115

Investments in equity securities Other assets 3,409 — —

Investment in GLPI partnership Other assets — 20,418 —

Derivative assets not designated as hedging instruments:

Cross currency swaps Prepaid expenses and other current assets — 4,871 —

Cross currency swaps Other assets — 615 —

Derivative assets designated as hedging instruments:

Interest rate contracts Prepaid expenses and other current assets — 340 —

Interest rate contracts Other assets — 336 —

Cross currency swaps Prepaid expenses and other current assets — 148 —

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Derivative liabilities not designated as hedging instruments:

Sinclair Performance Warrants Commercial rights liabilities — — 44,703

Sinclair Performance Warrants Other long-term liabilities — — 58,668

Cross currency swaps Other long-term liabilities — 11,174 —

Derivative liabilities designated as hedging instruments:

Interest rate contracts

Accrued and other current liabilities — 1,855 —

Interest rate contracts Other long-term liabilities — 13,372 —

Cross currency swaps Accrued liabilities — 1,225 —

Cross currency swaps Accrued and other current liabilities — 1,189 —

Cross currency swaps Other long-term liabilities — 1,624 —

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Total liabilities $ — $ 29,214 $ 118,591

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

2 unchanged sentences

Restricted cash Restricted cash 152,068 — —

Convertible loans Prepaid expenses and other current assets 657 — —

Convertible loans Other assets — — 10,212

Investments in equity securities Other assets 2,395 — —

Investment in GLPI partnership Other assets — 14,146 —

Derivative assets designated as hedging instruments:

Interest rate contracts Prepaid expenses and other current assets — 5,356 —

Cross currency swaps Prepaid expenses and other current assets — 4,174 —

Cross currency swaps Other assets — 6,477 —

Total derivative assets at fair value — 16,007 —

Total assets $ 315,262 $ 30,153 $ —

Contingent consideration Accrued liabilities $ — $ — $ 8,220

Contingent consideration Other long-term liabilities $ — $ — $ 58,580

Derivatives not designated as hedging instruments:

Sinclair Performance Warrants Commercial rights liabilities — — 36,987

Sinclair Performance Warrants Other long-term liabilities — — 44,703

Derivative liabilities designated as hedging instruments:

Interest rate contracts Other long-term liabilities — 21,492 —

Cross currency swaps Accrued and other current liabilities — 1,225 —

Cross currency swaps Other long-term liabilities — 29,376 —

Total derivative liabilities at fair value — 52,093 44,703

Total liabilities $ — $ 52,093 $ 103,283

There were no transfers made among the three levels in the fair value hierarchy for the years ended December 31, 2024 and 2023.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the changes in fair value of the Company’s Level 3 assets and liabilities:

( in thousands) Sinclair Performance Warrants Contingent Consideration Convertible Loans Total

( in thousands) Sinclair Performance Warrants Contingent Consideration

Balance as of December 31, 2022 $ 36,987 $ 8,220

3 unchanged sentences

Balance as of December 31, 2023 44,703 58,580

Additions in the period (acquisition fair value) — 58,580 1,667 60,247

Reductions in the period — ( 9,292 ) ( 3,500 ) ( 12,792 )

Change in fair value 13,965 1,343

Balance as of December 31, 2024 $ 58,668 $ 59,923

The gains (losses) recognized in the consolidated statements of operations for derivatives not designated as hedging instruments during the years ended December 31, 2023, 2022 and 2021 are as follows:

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The gains (losses) recognized in the consolidated statements of operations for derivative instruments during the years ended December 31, 2024, 2023 and 2022 are as follows:

Consolidated Statements of Operations Location Year Ended December 31,

(in thousands) 2024 2023 2022

Foreign exchange forward contracts Other non-operating income (expense), net $ — $ — $ ( 20,882 )

Derivatives not designated as hedging instruments

Sinclair Performance Warrants Other non-operating income (expense), net $ ( 13,965 ) $ ( 7,716 ) $ 32,577

Sinclair Options Other non-operating income (expense), net — — ( 1,526 )

Cross currency swaps General and administrative (1)

( 9,078 ) — —

Derivatives designated as hedging instruments

Interest rate contracts Interest expense, net $ 11,031 $ 1,953 $ —

Cross currency swaps Interest expense, net 3,658 1,350 —

__________________________________

(1) Amounts included in General and administrative during during the year ended December 31, 2024 as a result of the Company’s dedesignation of its EUR-GBP cross currency swaps as net investment hedges.

Subsequent changes in fair value will be reported within Other non-operating income (expense), net.

Interest Rate Contracts and Cross Currency Swaps

The fair values of interest rate and cross currency swap contract assets and liabilities are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on estimates using currency spot and forward rates and standard pricing models that consider the value of future cash flows as of the balance sheet date, discounted to a present value using discount factors that match both the time to maturity and currency of the underlying instruments.

The fair values of interest rate contracts and cross currency swap assets and liabilities are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on estimates using currency spot and forward rates and standard pricing models that consider the value of future cash flows as of the balance sheet date, discounted to a present value using discount factors that match both the time to maturity and currency of the underlying instruments.

These standard pricing models utilize inputs that are derived from or corroborated by observable market data such as interest rate yield curves as well as currency spot and forward rates.

Changes in the fair value of these contracts are reported as a component of other comprehensive income (loss).

Foreign Exchange Forward Contracts

The foreign exchange forward contracts are accounted for as derivative assets and liabilities and are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates.

Gains (losses) recognized in earnings resulting from the change in fair value are reported within “Other non-operating income, net” on the consolidated statements of operations.

When designated as hedging instruments, changes in the fair value of these contracts are reported as a component of other comprehensive income (loss).

When not designated as hedging instruments, changes in fair value of these contracts are reported within Other non-operating income (expense), net in the consolidated statements of operations.

Sinclair Performance Warrants

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Inputs to this valuation approach include volatility between 40 % and 67 %, risk free rates between 3.84 % and 4.79 %, the Company’s common stock price for each period and expected terms between 1.5 and 6.3 years.

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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Sinclair Options

Sinclair Options are accounted for as an equity classified instrument under ASC 815.

The fair value of the options are based on a Black-Scholes model using Level 2 inputs, including volatility rates, risk free rates, the Company’s common stock price and expected term.

The fair value of the Options was $ 59.7 million as of December 31, 2023 and 2022, and is recorded within “Additional paid-in-capital” in the consolidated balance sheets.

The fair value is recorded within “Other long-term liabilities” in the consolidated balance sheets.

Contingent consideration

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The remeasurements are based primarily on the expected probability of achievement of the contingency targets which are subject to management’s estimates.

These changes in fair value are recognized within “Other, non-operating expenses, net” of the consolidated statements of operations.

These changes in fair value are recognized within “Other, non-operating expenses, net” in the consolidated statements of operations.

In connection with the acquisitions of SportCaller and Monkey Knife Fight (“MKF”) in the first quarter of 2021, the Company recorded contingent consideration of $ 58.7 million.

During the first quarter of 2022, the Company settled contingent consideration of $ 15.9 million, comprised of 393,778 immediately exercisable penny warrants, 107,832 shares of Bally’s Corporation common stock and $ 0.1 million in cash.

During the second quarter of 2023, the Company 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, all in satisfaction of contingencies related to the respective acquisition agreements.

In connection with the acquisition of Bally’s Golf Links on September 12, 2023, the Company recorded contingent consideration at fair value of $ 58.6 million.

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 $ 59.9 million as of December 31, 2024.

Refer to Note 7 “ Business Combinations ” for further information.

Convertible loans

The Company has certain agreements with vendors to provide a portfolio of games to its customers.

Pursuant to these agreements, the Company has issued loans to its vendors and has an option to convert the loans to shares of the vendors’ equity, exercisable within a specified time period.

The Company recorded the short-term portion of the instruments within “Prepaid expenses and other current assets” and the long-term portion of the instruments within “Other assets” at their fair value.

The fair value of the loans to vendors with share prices quoted on active markets are classified within Level 1 of the hierarchy and the fair value of the loans to vendors with share values based on unobservable inputs are classified within Level 3 of the hierarchy, both with changes to fair value included within “Other non-operating expenses, net” of the consolidated statements of operations.

Investment in equity securities

The Company has a long term investment in an unconsolidated entity which it accounts for under the equity method of accounting.

The Company has elected the fair value option allowed by ASC 825, Financial Instruments , with respect to this investment.

Under the fair value option, the investment is remeasured at fair value at each reporting period through earnings.

The Company measures fair value using quoted prices in active markets that are classified within Level 1 of the hierarchy, with changes to fair value included within “Other non-operating expenses, net” of the consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investment in GLPI Partnership

The Company holds a limited partnership interest in GLP Capital, L.P., the operating partnership of GLPI.

The investment is reported at fair value based on Level 2 inputs, with changes to fair value included within “Other non-operating expenses, net” of the consolidated statements of operations.

The investment is reported at fair value based on Level 2 inputs, with changes to fair value included within “Other non-operating income (expense), net” in the consolidated statements of operations.

Long-term debt

The fair value of the Company’s Term Loan Facility and senior notes are estimated based on quoted prices in active markets and are classified as Level 1 measurements.

The fair value of the Company’s Term Loan Facility and unsecured notes are estimated based on quoted prices in active markets and are classified as Level 1 measurements.

The fair value of the Revolving Credit Facility approximates its carrying amount as it is revolving, variable rate debt, and is also classified as a Level 1 measurement.

1 unchanged sentence

Refer to Note 17 “ Long-Term Debt ” for further information.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 December 31, 2023

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721,456 535,631 719,858 570,544

ACCRUED LIABILITIES

As of December 31, 2023 and 2022, accrued liabilities consisted of the following:

ACCRUED AND OTHER CURRENT LIABILITIES

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

(in thousands) 2024 2023

Gaming liabilities $ 187,233 $ 177,557

Diamond Sports Group non-cash liability (1)

Diamond Sports Group non-cash settlement (1)

Compensation 66,356 83,112

1 unchanged sentence

Bally’s Chicago - land development liability — 47,739

GLPI advance deposit (2)

Insurance reserve 23,898 20,990

Other 143,013 110,851

Total accrued liabilities $ 651,719 $ 573,931

Total accrued and other current liabilities

$ 481,292 $ 651,719

(1) Refer to Note 22 “ Commitments and Contingencies ” for further information

(2) Refer to Note 17 “ Leases ” for further information

__________________________________

(1) Refer to Note 15 “Strategic Partnership - Sinclair Broadcast Group” for further information

STRATEGIC PARTNERSHIP - SINCLAIR BROADCAST GROUP

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Under the Framework Agreement, the Company paid annual fees in cash, issued warrants and options and agreed to share tax benefits and received naming, integration and other rights, including access to Sinclair’s Tennis Channel, Stadium Sports Network and STIRR streaming service.

Under a Commercial Agreement (the “Commercial Agreement”) contemplated by the Framework Agreement, the Company was required to pay annual fees to Diamond Sports Group (“Diamond”), a Sinclair subsidiary, for naming rights over Diamond’s regional sports networks (“RSNs”) and other consideration which escalated annually and total $ 88.0 million over a 10-year term.

In March 2023, Diamond commenced reorganization proceedings under Chapter 11 of the Bankruptcy Code, and in July 2023, Diamond commenced litigation against Sinclair, Bally’s and others as part of its bankruptcy proceedings.

Subsequent to December 31, 2023, Diamond agreed to settle its claims against all defendants, including Bally’s.

Under a Commercial Agreement (the “Commercial Agreement”) contemplated by the Framework Agreement, the Company paid annual fees to Diamond Sports Group (“Diamond”), a Sinclair subsidiary, for naming rights over Diamond’s regional sports networks (“RSNs”) and other consideration.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In 2023, Diamond commenced reorganization proceedings under Chapter 11 of the Bankruptcy Code, and commenced litigation against Sinclair, Bally’s and others as part of its bankruptcy proceedings, and in 2024, agreed to settle its claims against all defendants, including Bally’s (the “Settlement Agreement”).

Pursuant to the settlement terms, Diamond would receive payments from Sinclair and would reject the Commercial Agreement.

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Separately, Bally’s and Sinclair agreed that their relative rights and obligations under the Framework Agreement and all agreements contemplated thereby would terminate, except for rights and obligations in respect of certain local broadcast television station integrations under the Commercial Agreement, and except for their respective rights and obligations under the Option Agreement (regarding the Options referenced below), the Warrant Agreement (regarding the Penny Warrants referenced below), the Performance Warrant Agreement (regarding the Performance Warrants referenced below), the Registration Rights Agreement, the Investor Rights Agreement and the Tax Receivable Agreement.

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

Refer to Note 22 “Commitments and Contingencies” for further information.

The Company accounted for this relationship as an asset acquisition in accordance with the “Acquisition of Assets Rather Than a Business” subsections of ASC 805-50, Business Combinations—Related Issues , using a cost accumulation model.

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 $ 225.9 million and $ 255.6 million as of December 31, 2023 and 2022, respectively.

Amortization was $ 30.9 million, $ 33.3 million and $ 25.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Refer to Note 10 “ Goodwill and Intangible Assets ” for further information.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Bally’s obligation to pay Diamond for the naming rights terminated upon the bankruptcy court’s approval of the settlement terms, which the court approved on March 1, 2024 and in turn, the Company derecognized the rights fees liability against the non-cash settlement liability established as of December 31, 2023.

The Company’s non-cash settlement liability reflects the effect of the termination of naming rights on its remaining commercial rights intangible asset originally recorded at the time the Framework Agreement.

As of December 31, 2023, the non-cash settlement liability was $ 144.9 million.

The Company accounted for its relationship with Sinclair under the Framework Agreement as an asset acquisition in accordance with the “Acquisition of Assets Rather Than a Business” subsections of ASC 805-50, Business Combinations—Related Issues , using a cost accumulation model.

The total intangible asset (“Commercial rights intangible asset”), prior to its derecognition in 2024, represented 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 present value of the naming rights fees was recorded as part of intangible assets, with a corresponding liability, which accreted through interest expense through the termination date of the Commercial Agreement.

The total value of the liability as of December 31, 2023 and 2022 was $ 57.7 million and $ 59.3 million, respectively.

The short-term portion of the liability, which was $ 8.0 million and $ 6.0 million as of December 31, 2023 and 2022, respectively, is recorded within “Accrued liabilities” and the long-term portion of the liability, which was $ 49.7 million and $ 53.3 million as of December 31 2023 and 2022, respectively, is reflected as “Commercial rights liability” in our consolidated balance sheets.

Accretion expense reported in “Interest expense, net” in our consolidated statements of operations was $ 4.4 million, $ 4.4 million and $ 4.3 million for years ended December 31, 2023, 2022 and 2021.

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”).

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.

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 consolidated balance sheets, with an offset to the Commercial rights intangible asset.

The Company recorded $ 59.7 million, related to the Options, as of December 31, 2023 and 2022, and is included within “Additional paid-in capital” in the consolidated balance sheets.

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.

Refer to Note 12 “ Fair Value Measurements ” for further information.

Under the Framework Agreement, the Company is required to share 60 % of the tax benefit it realizes from the Penny Warrants, Options, Performance Warrants and other related payments.

As of December 31, 2023, Commercial rights intangible asset, net of accumulated amortization, was $ 225.9 million.

As of December 31, 2023, the short-term portion of the liability, which was $ 8.0 million, was recorded within “Accrued and other current liabilities”, and the long-term portion of the liability, which was $ 49.7 million, was reflected within “Other long-term liabilities” in our consolidated balance sheets.

Pursuant to the Settlement Agreement, in the fourth quarter of 2024, after the completion of the 2024 major league baseball season, the Company derecognized the Commercial rights intangible asset, relieving the Company’s non-cash settlement liability, and as such, there are no associated remaining balances as of December 31, 2024.

Under the Framework Agreement, the Company issued to Sinclair warrants to purchase up to 4,915,726 shares of the Company at an exercise price of $ 0.01 per share (“the Penny Warrants”), a warrant to purchase up to 3,279,337 shares of the Company at a price of $ 0.01 per share, subject to the achievement of various performance metrics (the “Performance Warrants”), and 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 in November 2024 (the “Options”).

Additionally, the Company is required to share 60 % of the tax benefit it realizes from the Penny Warrants, Options, Performance Warrants and other related payments.

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

The liability for these obligations was $ 19.1 million and $ 19.4 million as of December 31, 2023 and 2022, respectively, and is reflected in our consolidated balance sheets.

The change in value of the liability is included in “Other non-operating expenses, net” in our consolidated statements of operations.

Refer to Note 13 “ Fair Value Measurements ” and Note 25 “Subsequent Events” for further information on the Performance Warrants and Options.

RESTRUCTURING EXPENSE

On January 18, 2023, the Company announced a restructuring plan of the Interactive business intended to reduce operating costs and continue the Company’s commitment to achieving profitable operations in its North America Interactive segment which included a reduction of the Company’s then current Interactive workforce by up to 15 percent.

In furtherance of and as an expansion of the January 2023 restructuring plan, on October 20, 2023, the Company announced further restructuring initiatives targeted at reshaping the technology utilized by its Interactive segments.

During the year ended December 31, 2023, the Company incurred restructuring charges of $ 31.0 million representing employee related severance costs as well as $ 5.7 million of impairment charges representing the impairment of certain technology which will no longer be utilized.

The components of restructuring charges by segment, for the year ended December 31, 2023, are summarized as follows:

International Interactive North America Interactive Other Total

In, 2023, the Company announced a restructuring plan of the Interactive business intended to reduce operating costs and continue the Company’s commitment to achieving profitable operations in its North America Interactive segment, which included a reduction of the Company’s then current Interactive workforce, and reshaping the technology utilized by both of its Interactive segments.

During 2024, the Company announced that it would cease its operations at the Tropicana Las Vegas on April 2, 2024 in order to redevelop the site with a state-of-the-art integrated resort and ballpark.

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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of restructuring charges by segment, for the years ended December 31, 2024 and 2023, are summarized as follows:

Year Ended December 31,

(in thousands)

Severance and employee related benefits (1)

$ 19,591 $ 9,735 $ 1,688 $ 31,014

Casinos & Resorts $ 20,037 $ —

International Interactive ( 794 ) 19,591

North America Interactive ( 1,732 ) 9,735

Other 410 1,688

Total severance and employee related benefits 17,921 31,014

Accelerated depreciation expense (2)

Impairment (3)

— 5,745 — 5,745

Total restructuring charges $ 98,038 $ 36,759

__________________________________

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

(2) Included within “Impairment charges” of the consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The changes in the Company’s restructuring related liabilities for the year ended December 31, 2023 is as follows:

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

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

(3) Included within “ Impairment charges ” of the North America Interactive reportable segment in the consolidated statements of operations.

The changes in the Company’s restructuring related liabilities for the years ended December 31, 2024 and 2023 were as follows:

(in thousands)

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Balance as of December 31, 2023 5,291

The restructuring liability as of December 31, 2023 is included within “Accrued liabilities” on the consolidated balance sheets.

Charges 17,921

Payments ( 22,370 )

Effect of foreign exchange ( 842 )

Balance as of December 31, 2024

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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LONG-TERM DEBT

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Refer to Note 12 “ Derivative Instruments ” for further information.

On August 20, 2021, two unrestricted subsidiaries (together, the “Escrow Issuers”) of the Company issued $ 750.0 million aggregate principal amount of 5.625 % senior notes due 2029 (the “2029 Notes”) and $ 750.0 million aggregate principal amount of 5.875 % Senior Notes due 2031 (the “2031 Notes” and, together with the 2029 Notes, the “Senior Notes”).

The Senior Notes were issued pursuant to an indenture, dated as of August 20, 2021, among the Escrow Issuers and U.S.

Unsecured Notes

On August 20, 2021, two unrestricted subsidiaries (together, the “Escrow Issuers”) of the Company issued $ 750.0 million aggregate principal amount of 5.625 % senior notes due 2029 (the “2029 Notes”) and $ 750.0 million aggregate principal amount of 5.875 % senior notes due 2031 (the “2031 Notes” and, together with the 2029 Notes, the “Unsecured Notes”).

The Unsecured Notes were issued pursuant to an indenture, dated as of August 20, 2021, among the Escrow Issuers and U.S.

Bank National Association, as trustee.

Certain of the net proceeds from the Senior Notes offering were placed in escrow accounts for use in connection with the Gamesys acquisition.

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

The Senior Notes are guaranteed, jointly and severally, by each of the Company’s restricted subsidiaries that guarantees the Company’s obligations under its Credit Agreement (as defined below).

Certain of the net proceeds from the Unsecured Notes offering were placed in escrow accounts for use in connection with the Gamesys acquisition.

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

The Unsecured Notes are guaranteed, jointly and severally, by each of the Company’s restricted subsidiaries that guarantees the Company’s obligations under its Credit Agreement (as defined below).

The 2029 Notes mature on September 1, 2029 and the 2031 Notes mature on September 1, 2031.

Interest is payable on the Senior Notes in cash semi-annually on March 1 and September 1 of each year, beginning on March 1, 2022.

The Company may redeem some or all of the Senior Notes at any time prior to September 1, 2024, in the case of the 2029 Notes, and September 1, 2026, in the case of the 2031 Notes, at prices equal to 100% of the principal amount of the Senior Notes to be redeemed plus certain “make-whole” premiums, plus accrued and unpaid interest.

In addition, prior to September 1, 2024, the Company may redeem up to 40 % of the original principal amount of each series of the Senior Notes with proceeds of certain equity offerings at a redemption price equal to 105.625 % of the principal amount, in the case of the 2029 Notes, and 105.875 %, in the case of the 2031 Notes, plus accrued and unpaid interest.

Interest is payable on the Unsecured Notes in cash semi-annually on March 1 and September 1 of each year, beginning on March 1, 2022.

The Company may redeem some or all of the 2031 Notes at any time prior to September 1, 2026 at a price equal to 100% of the principal amount of the 2031 Notes to be redeemed plus a “make-whole” premium, plus accrued and unpaid interest.

The Company may redeem some or all of the Senior Notes at any time on or after September 1, 2024, in the case of the 2029 Notes, and September 1, 2026, in the case of the 2031 Notes, at certain redemption prices set forth in the indenture plus accrued and unpaid interest.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 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.

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

Secured Notes

On February 7, 2025, in connection with the Merger, the Company issued $ 500.0 million of new first lien senior secured notes, maturing on October 2, 2028, at a rate per annum equal to 11.00 %, payable quarterly in arrears.

Refer to Note 25 “Subsequent Events” for further information.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Credit Facility

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Refer to Note 12 “ Derivative Instruments ” for further information.

6.75 % Senior Notes due 2027

On May 10, 2019, the Company, issued $ 400 million aggregate principal amount of 6.75 % unsecured senior notes due June 1, 2027 and, on October 9, 2020, the Company issued an additional $ 125 million aggregate principal amount of 6.75 % unsecured senior notes due June 1, 2027 (together, the “2027 Notes”).

On September 7, 2021, the Company redeemed $ 210 million aggregate principal amount of the 2027 Notes at a redemption price of 106.750 % of the principal amount using a portion of the proceeds of the Company’s April 2021 public offering of common stock.

On October 5, 2021, the Company redeemed the remaining $ 315 million aggregate principal amount of the 2027 Notes at a redemption price of 109.074 % of the principal amount using a portion of the proceeds of its Term Loan Facility.

In connection with the termination of a prior credit agreement and the 2027 Notes, the Company recorded a loss on extinguishment of debt of $ 103.0 million in its consolidated statements of operations during the year ended December 31, 2021.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt Maturities

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Thereafter 735,000

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Operating Leases

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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 $ 1.20 billion and $ 836.1 million as of December 31, 2023 and 2022, respectively, and right of use assets of $ 1.16 billion and $ 808.9 million as of December 31, 2023 and 2022, respectively, which were included in the consolidated balance sheets.

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 are leased under the terms of a master lease agreement (the “Master Lease”) with GLPI.

The Company had total operating lease liabilities of $ 1.62 billion and $ 1.20 billion as of December 31, 2024 and 2023, respectively, and right of use assets of $ 1.54 billion and $ 1.16 billion as of December 31, 2024 and 2023, respectively, which were included in the consolidated balance sheets.

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

All GLPI leases are accounted for as operating leases within the provisions of 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 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 minimum 1% annual escalation or greater escalation dependent on CPI.

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

In connection with the sale of the real estate for Bally’s Dover in the second quarter of 2021, the Company received proceeds of $ 144.0 million and recognized a net gain of $ 53.4 million.

In connection with the sale of the real estate for Bally’s Quad Cities and Bally’s Black Hawk during the second quarter of 2022, the Company received proceeds of $ 150.0 million and recognized a gain of $ 50.8 million.

The gains recorded on the transactions represent the difference in the respective transaction prices and the derecognition of assets and are recorded within “Gain from sale-leaseback, net” in the consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

An advance deposit of $ 200.0 million was received in the third quarter of 2022 in connection with this agreement, which was recorded within “Accrued liabilities” in the consolidated balance sheets as of December 31, 2022.

During the year ended December 31, 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 consolidated statements of operations.

In addition to the properties under the Master Lease explained above, the Company also entered into a lease with GLPI for the land associated with Tropicana Las Vegas, which the Company acquired during the third quarter of 2022.

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.

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.

This lease modification did not change the lease classification.

The cash received is treated as a lessor incentive, leading to an adjustment in the Right of Use asset for the total funding amount.

Upon modification, the Lease Liability and Right of Use asset were adjusted to reflect the present value of the increased future lease payment.

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

Components of lease expense included within “General and administrative” for operating leases during the years ended December 31, 2023, 2022 and 2021 are as follows:

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.

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

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.

These gains are reflected as “Gain from sale-leaseback, net” in the consolidated statements of operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Components of the Company’s lease costs during the years ended December 31, 2024, 2023 and 2022 were as follows:

Year Ended December 31,

(in thousands) 2024 2023 2022

Operating lease expense (1)

Operating lease cost $ 157,829 $ 148,375 $ 75,675

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Short-term lease expense 22,871 13,249 17,536

Total lease expense $ 171,984 $ 101,597 $ 52,291

Total operating lease expense

$ 192,821 $ 171,984 $ 101,597

Gain on sale lease-back, net (2)(3)

$ 86,254 $ 374,321 $ 50,766

__________________________________

(1) Included within “General and administrative” in the Consolidated Statements of Operations

(2) Included within “Gain on sale-leaseback, net” in the Consolidated Statements of Operations.

(3) 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.

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

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Right of use assets obtained in exchange for operating lease liabilities $ 495,747 $ 406,043 $ 341,747

Derecognition of financing obligation $ ( 200,000 ) $ — $ —

December 31, 2024 December 31, 2023

Weighted average remaining lease term 26.2 years 17.6 years

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Lease obligations $ 1,620,306

Future minimum lease payments disclosed in the table above include $ 87.7 million related to extension options that are reasonably certain of being exercised.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financing Obligation

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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 consolidated balance sheets as of December 31, 2023 and 2022.

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 $ 17.4 million and $ 2.0 million during the years ended December 31, 2023 and 2022, respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Bally’s Chicago made cash payments, and recorded corresponding interest expense, of $ 12.4 million, $ 17.4 million and $ 2.0 million during the years ended December 31, 2024, 2023 and 2022, respectively.

In the third quarter of 2024, GLP, an affiliate of GLPI, acquired the real estate underlying the Bally’s Chicago project, for which the Company was subject to the financing obligation, and assumed the existing lease.

The lease with GLP was amended in the third quarter, creating a lease modification event whereby the land components previously classified as a financing obligation were reassessed and now classified as an operating lease.

This change was due to the transfer of control of the land asset from the Company to the lessor, which permitted sale recognition in accordance with ASC 842.

As a result of this reassessment, the Company derecognized $ 350.0 million from “Property and equipment, net related to the land asset and $ 200.0 million from the “Long-term portion of financing obligation” within our consolidated balance sheets.

As a result of the lease modification, a $ 150.0 million offset in “Gain on sale-leaseback, net” was recorded in the consolidated statements of operations during the year ended December 31, 2024.

Pending Lease Transactions

On July 11, 2024, 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’s permanent casino.

On September 11, 2024, GLP completed its acquisition of the land on which we will build the permanent casino (as provided in the Binding Term Sheet), and we entered into an amendment to the existing land lease with GLP (as the new landlord) to reflect certain provision of the Binding Term Sheet.

The Binding Term Sheet further provides that GLPI will enter into a new master lease agreement with Bally’s Chicago Operating Company, LLC (“Chicago MLA”).

The amended ground lease with GLP includes, and the Chicago MLA will include, annual rent of $ 20 million, subject to customary escalation provisions.

The Chicago MLA also provides 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 will be for 15 years with renewal options to be agreed upon by the parties.

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

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Equity Incentive Plans

As of December 31, 2023, the Company has two equity incentive plans:

the 2015 Stock Incentive Plan (“2015 Incentive Plan”) and the Bally’s Corporation 2021 Equity Incentive Plan (“2021 Incentive Plan”), collectively (the “Equity Incentive Plans”).

The 2015 Incentive Plan provided for the grant of stock options, time-based RSUs, RSAs, PSUs and other awards (collectively, “restricted awards”) (including those with performance-based vesting criteria) to employees, directors or consultants of the Company.

The 2015 Incentive Plan authorized for the issuance of up to 1,700,000 shares of the Company’s common stock pursuant to grants of awards made under the plan.

Effective May 18, 2021, no new awards were granted under the 2015 Incentive Plan as a result of the new 2021 Incentive Plan being approved at the Company’s 2021 Annual Shareholder Meeting.

The 2021 Incentive Plan provides for the grant of stock options, RSAs, RSUs, PSUs and other awards (including those with performance-based vesting criteria) to employees, directors or consultants of the Company.

The 4,250,000 shares of the Company’s common stock, decreased by the number of shares subject to awards granted under the 2015 Incentive Plan between December 31, 2020 and May 18, 2021, or 221,464 shares, plus any shares subject to awards granted under the 2021 Incentive Plan or the 2015 Incentive Plan that are added back to the share pool under the 2021 Incentive Plan pursuant to the plan’s share counting rules, are authorized for issuance under the 2021 Incentive Plan.

As of December 31, 2023, 1,563,230 shares were available for grant under the 2021 Incentive Plan.

As of December 31, 2024, the Company has one equity incentive plan:

the Bally’s Corporation 2021 Equity Incentive Plan (“2021 Incentive Plan”).

The 2021 Incentive Plan was approved by shareholders at its 2021 Annual Meeting of Shareholders effective May 18, 2021.

The 2021 Incentive Plan provides for the grant of stock options, RSAs, RSUs, PSUs and other awards (including those with performance-based vesting criteria) (collectively, “restricted awards” to employees, directors or consultants of the Company.

As of December 31, 2024, 1.4 million shares were available for grant under the 2021 Incentive Plan.

Share-Based Compensation

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As of December 31, 2024, there was $ 9.7 million of unrecognized compensation cost related to outstanding share-based compensation arrangements (including stock options, RSA, RSU and PSU arrangements) which is expected to be recognized over a weighted average period of 1.4 years.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units and Performance-Based Restricted Stock Units

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The fair value of RSUs and PSUs is based on the Company’s common stock price as of the grant date.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following summary presents information of equity-classified RSU and PSU activity for the year ended December 31, 2024:

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

There was no repurchase activity during the year ended December 31, 2024.

Total share repurchase activity during the years ended December 31, 2023 and 2022 is as follows:

6 unchanged sentences

(1) Includes 4.7 million shares repurchased from the Company’s modified Dutch auction tender offer completed July 27, 2022 at a price of $ 22.00 per share for an aggregate purchase price of $ 103.3 million.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

All shares repurchased during the years ended December 31, 2023 and 2022 were transferred to treasury stock.

3 unchanged sentences

There were no cash dividends paid during the years ended December 31, 2024, 2023, and 2022.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common Stock Offering

On April 20, 2021, the Company issued a total of 12,650,000 shares of Bally’s common stock in an underwritten public offering at a price to the public of $ 55.00 per share.

Net proceeds from the offering were approximately $ 671.4 million, after deducting underwriting discounts, but before expenses.

On April 20, 2021, the Company issued to affiliates of Sinclair a warrant to purchase 909,090 common shares for an aggregate purchase price of $ 50.0 million, or $ 55.00 per share.

The net proceeds were used to finance a portion of the purchase price of the Gamesys acquisition.

The exercise price of the warrant is nominal and its exercise is subject to, among other conditions, requisite gaming authority approvals.

Sinclair agreed not to acquire more than 4.9 % of Bally’s outstanding common shares without such approvals.

In addition, in accordance with the agreements that Bally’s and Sinclair entered into in November 2020, Sinclair exchanged 2,086,908 common shares for substantially identical warrants.

Preferred Stock

9 unchanged sentences

MKF Penny warrants (Note 13)

Telescope Contingent shares (Note 12)

Outstanding awards under Equity Incentive Plans (Note 19)

__________________________________

(1) Consists of four equal tranches to purchase shares with exercise 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 of the Framework Agreement.

(1) As of December 31, 2024 and 2023, the Options consists of four equal tranches to purchase shares with exercise 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 of the Framework Agreement.

Pursuant to the Support Agreement, on February 7, 2025, all remaining Options were returned to Bally’s in exchange for an additional 384,536 Penny Warrants.

Refer to Note 25 “ Subsequent Events ” for further information.

(2) On February 7, 2025, the consummation of the Merger constituted a Change of Control under the Framework Agreement and as such, all performance warrants became immediately exercisable at a price of $ 0.01 per share.

Refer to Note 25 “ Subsequent Events ” for further information

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Loss

The following table reflects the change in accumulated other comprehensive loss by component for the years ended December 31, 2024, 2023 and 2022:

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

Net Investment Hedges Total

(in thousands) Foreign Currency Translation Adjustment (1)

Benefit Plans Cash Flow Hedges (2)

Net Investment Hedges (3)

Accumulated other comprehensive loss at December 31, 2021 $ ( 25,833 ) $ ( 976 ) $ — $ — $ ( 26,809 )

4 unchanged sentences

Other comprehensive income (loss) before reclassifications 118,781 977 ( 14,183 ) ( 18,116 ) 87,459

Reclassifications from accumulated other comprehensive income (loss) to earnings — — ( 1,953 ) ( 1,350 ) ( 3,303 )

Effects of settlement (Note 2)

— ( 244 ) — — ( 244 )

Tax effect — ( 191 ) 4,890 ( 2,529 ) 2,170

2 unchanged sentences

Reclassifications from accumulated other comprehensive income (loss) to earnings ( 4,689 ) — ( 11,031 ) 5,420 ( 10,300 )

Effects of settlement (Note 20)

— ( 244 ) — — ( 244 )

Tax effect — ( 312 ) ( 1,915 ) ( 347 ) ( 2,574 )

1 unchanged sentence

__________________________________

(1) Reclassifications from accumulated other comprehensive income (loss) to earnings includes the foreign currency translation adjustment of $( 4.7 ) million released related to the Company’s sale of the Carved-Out Business (refer to Note 8 “Dispositions” for further information).

(2) As of December 31, 2024, approximately $ 1.9 million of existing gains and losses are estimated to be reclassified into earnings within the next 12 months.

EMPLOYEE BENEFIT PLANS

Multi-employer Defined Benefit Plans

The Company participates in and contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain of its union-represented employees.

The risks of participating in these multi-employer plans are different from single-employer plans in the following aspects:

• Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.

• If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

• If the Company chooses to stop participating in some of its multi-employer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The following table outlines the Company’s participation in multi-employer pension plans for the years ended December 31, 2023, 2022 and 2021 and sets forth the calendar year contributions and accruals for each plan.

The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit plan number.

The most recent Pension Protection Act zone status available in 2023 and 2022 relates to the plans’ two most recent fiscal year-ends.

The zone status is based on information that the Company received from the plans’ administrators and is certified by each plan’s actuary.

Plans certified in the red zone are generally less than 65% funded, plans certified in the orange zone are both less than 80% funded and have an accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans certified in the yellow zone are less than 80% funded and plans certified in the green zone are at least 80% funded.

The “FIP/RP Status Pending/Implemented” column indicates whether a financial improvement plan (“FIP”) for yellow/orange zone plans, or a rehabilitation plan (“RP”) for red zone plans, is either pending or has been implemented.

As of December 31, 2023 and 2022, all plans that have either a FIP or RP requirement have had the respective plan implemented.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Plan Number Pension Protection Act

Zone Status FIP/RP Status

Implemented Contributions and Accruals (in $000’s)

Contributions > 5% Union

Pension Fund 2023 2022 2023 2022 2021

SEIU National Industry Pension Fund 52-6148540 Red Red Yes/Implemented $ 562 $ 495 $ 460 No 4/30/2025

New England Carpenters Pension Fund 51-6040899 Green Green No 138 95 75 No 5/31/2024

Plumbers and Pipefitters Pension Fund 52-6152779 Green Yellow No 277 267 175 No 8/30/2026

Rhode Island Laborers Pension Fund 51-6095806 Green Green No 597 656 671 No 10/31/2025

New England Teamsters Pension Fund 04-6372430 Red Red Yes/Implemented 298 278 254 No 6/30/2028

The Legacy Plan of the UNITE HERE Retirement Fund (2)

82-0994119/001 Red Red Yes/Implemented 1,014 963 1,319 No 8/31/2028

The Adjustable Plan of the UNITE HERE Retirement Fund (2)

82-0994119/002 N/A (1)

Local 68 Engineers Union Pension Fund 51-0176618 Yellow Yellow Yes/Implemented 289 286 269 No 4/30/2027

Northeast Carpenters Pension Fund 11-1991772 Green Green No 94 127 122 No 4/30/2027

International Painters and Allied Trades Industry Pension Fund 52-6073909 Red Yellow No 68 82 80 No 4/30/2027

Total Contributions $ 3,337 $ 3,249 $ 3,425

__________________________________

(1) The Plan is not subject to the Pension Protection Act of 2016 zone status certification rule.

(2) Formerly listed as Hotel & Restaurant Employees International Pension Fund - Allocations of contributions between the two plans are determined by the plan administrator.

Unions at Bally’s Twin River and Bally’s Atlantic City participate in the UNITE HERE Retirement funds.

Contributions, based on wages paid to covered employees totaled approximately $ 3.3 million, $ 3.2 million and $ 3.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

These aggregate contributions were not individually significant to any of the respective plans.

The Company’s share of the unfunded vested liability related to its multi-employer plans, if any, other than the New England Teamsters and Trucking Industry Pension Fund discussed below, is not determinable.

Under the terms of certain collective bargaining agreements, the Company contributes to a number of multi-employer annuity funds.

Contributions are made at a fixed rate per hour worked, in accordance with the collective bargaining agreements.

These plans are not subject to the withdrawal liability provisions applicable to multi-employer defined benefit pension plans.

Contributions made to these plans by the Company were $ 2.8 million , $ 2.6 million and $ 2.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Dover Downs Defined Benefit Pension Plan

The Company sponsors a non-contributory, tax qualified defined benefit pension plan that has been frozen since July 2011.

As of December 31, 2023 and 2022, the benefit obligation was $ 16.9 million and $ 20.8 million, respectively, and the fair value of plan assets were $ 16.5 million and $ 19.0 million, respectively.

The Company did not make any contributions to the plan during the year ended December 31, 2023 and does not expect to contribute in 2024.

Net periodic benefit income and total income recognized in other comprehensive income for the year ended December 31, 2023 were $ 0.3 million and $ 0.7 million, respectively.

Amounts relating to the plan recognized in the consolidated balance sheets as of December 31, 2023 and 2022 consist of non-current liabilities of $ 0.5 million and $ 1.8 million, respectively.

The settlement reduced the Company’s benefit obligation by $ 3.4 million and reduced total income recognized in other comprehensive income for the year by $ 0.2 million.

(3) Reclassifications from accumulated other comprehensive income (loss) to earnings includes $ 9.1 million released as a result of dedesignating a EUR-GBP cross currency swap related to the Company’s sale of the Carved-Out Business (refer to Note 8 “Dispositions” for further information).

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Defined Contribution Plans

The Company has a retirement savings plan under Section 401(k) of the Internal Revenue Code covering its US non-union employees and certain union employees.

The plan allows employees to defer up to the lesser of the Internal Revenue Code prescribed maximum amount or 100 % of their income on a pre-tax basis through contributions to the plan.

Gamesys also operates defined contribution retirement benefit plans for their U.K., US, Toronto, Isle of Man and Gibraltar offices.

Eligible employees are allowed to contribute between 3 - 5 % of their base salary to the various plans and the Company matches all employee contributions.

Total employer contribution expense attributable to defined contribution plans was $ 8.5 million , $ 7.1 million and $ 4.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The components of income (loss) before taxes are as follows:

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Provision (benefit) for income taxes $ 15,252 $ 1,762 $ ( 28,923 )

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The effective rate varies from the statutory US federal tax rate as follows:

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Global intangible low-tax income (“GILTI”) 17,941 14,333 2,404

Loss on derivative instruments — — 4,363

Goodwill — — 28,935

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Effective income tax rate on continuing operations ( 2.8 ) % ( 0.9 ) % 6.4 %

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

3 unchanged sentences

Deferred tax assets:

Accrued liabilities and other $ 44,707 $ 5,585

Share-based compensation 7,818 1,699

Commercial rights liabilities 31,376 29,248

Self constructed assets — 5,690

Interest 283,757 195,628

Goodwill — 3,140

Net operating loss carryforwards 44,510 28,468

Property and equipment

Accrued and other current liabilities

21,681 44,707

Framework Agreement liabilities

20,344 31,376

Share-based compensation 5,876 7,818

Valuation allowance ( 234,599 ) ( 154,943 )

8 unchanged sentences

Net deferred tax liabilities $ ( 115,905 ) $ ( 89,556 )

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company will only recognize a deferred tax asset when, based on available evidence, realization is more likely than not.

1 unchanged sentence

Accordingly, a $ 234.6 million and $ 154.9 million valuation allowance has been established as of December 31, 2024 and 2023, respectively.

The change in valuation allowance for the years ended December 31, 2023 and 2022 was $ 94.9 million and $ 60.1 million, respectively.

There was no change in valuation allowance for the year ended December 31, 2021.

The change in valuation allowance for the years ended December 31, 2024, 2023, and 2022 was $ 79.7 million, $ 94.9 million, and $ 60.1 million, respectively.

At December 31, 2024, the Company’s cash and cash equivalents totaled $ 171.2 million, of which approximately 7 % was held in locations outside the US.

During the year ended December 31, 2022, the Company changed its assertion and will not indefinitely reinvest undistributed earnings.

Accordingly, the Company has determined that no deferred tax liability is required for undistributed foreign earnings at December 31, 2023 and 2022 and will continue to monitor for future changes.

For the years ended December 31, 2023 and 2022 the net deferred tax liabilities decreased by $ 22.9 million and decreased by $ 90.1 million, respectively.

The Company does not reinvest undistributed earnings, and accordingly, the Company has determined that no deferred tax liability is required for undistributed foreign earnings at December 31, 2024 and 2023 and will continue to monitor for future changes.

For the years ended December 31, 2024 and 2023 the net deferred tax liabilities increased by $ 26.3 million and decreased by $ 22.9 million, respectively.

For the year ended December 31, 2024, an increase of $ 23.9 million was included in income from operations, offset by a decrease related to the foreign exchange remeasurement of $ 0.3 million, and an increase of $ 2.6 million was included in other comprehensive loss.

For the year ended December 31, 2023, a decrease of $ 23.9 million was included in income from operations, a decrease related to the foreign exchange remeasurement of $ 1.2 million, and offset by an increase of $ 2.2 million included in other comprehensive loss.

For the year ended December 31, 2022, a decrease of $ 88.1 million was included in income from operations, a decrease related to the foreign exchange remeasurement of $1.4 million and a decrease of $ 0.6 million included in other comprehensive loss.

As of December 31, 2024, the Company has $ 71.8 million of federal net operating carryforwards subject to a section 382 limitation with an unlimited carryforward period.

1 unchanged sentence

As of December 31, 2024 and 2023, the Company had $ 405.2 million and $ 310.3 million of state net operating loss carryforwards, respectively, which expire at various dates through 2041.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Internal Revenue Code (IRC) Section 382 provides for a limitation of the annual use of net operating loss and tax credit carryforwards following certain ownership changes (as defined by the IRC Section 382) that limits the Company’s ability to utilize these carryforwards prior to expiration.

1 unchanged sentence

As of December 31, 2024, the Company expects to utilize all acquired tax attributes prior to expiration.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law.

The CARES Act provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees, including those that operate in the gaming area.

T he Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees, including those that operate in the gaming area.

The benefits of the CARES Act that were available to us included:

2 unchanged sentences

the employee retention credit, providing a refundable federal tax credit equal to 50% of the first $10,000 of qualified wages and benefits, including qualified medical plan contributions, paid to employees while they are not performing services after March 12, 2020 and before January 1, 2021.

The Company realized a tax benefit of $ 5.3 million in the year ended December 31, 2021.

During the year ended December 31, 2024, the Company realized a CARES Act tax benefit of $3.2 million.

The Company realized no tax benefit during the years ended December 31, 2023 and 2022.

2 unchanged sentences

If the US government or any other governmental authority agrees to provide such aid under the CARES Act or any other crisis relief assistance, it may impose certain requirements on the recipients of the aid, including restrictions on executive officer compensation, dividends, prepayment of debt, limitations on debt and other similar restrictions that will apply for a period of time after the aid is repaid or redeemed in full.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From time to time, the Company may be subject to audits covering a variety of tax matters by taxing authorities in any taxing jurisdiction where the Company conducts business.

9 unchanged sentences

Uncertain tax position liability at the end of the year $ 24,824 $ 29,286 $ 11,277

__________________________________

(1) There was an acquired tax contingency accrual of $ 5.1 million for uncertain tax positions recorded as of December 31, 2021.

It is reasonably possible that the Company’s unrecognized tax benefits could change in the next twelve months, however the Company is unable to estimate a range at this time.

11 unchanged sentences

COMMITMENTS AND CONTINGENCIES

Diamond commenced reorganization proceedings under Chapter 11 of the Bankruptcy Code in March 2023.

In July 2023, Diamond commenced litigation against Sinclair, Bally’s and others as part of its bankruptcy proceedings, challenging a series of transactions between Sinclair and Diamond.

One of the 19 counts in the complaint includes Bally’s as a defendant, alleging that the Commercial Agreement with Sinclair involved fraudulent transfers and unlawful distributions.

Subsequent to December 31, 2023, Diamond agreed to settle these claims against all defendants, including Bally’s.

Under the settlement terms, Diamond would receive payments from Sinclair and would reject the Commercial Agreement.

Bally’s would continue to have naming rights on Diamond’s RSNs through the 2024 major league baseball season at no cost to either party (unless Diamond agrees with a new counterparty that will pay for such naming rights).

Bally’s, in turn, would receive a release of all claims Diamond may have against it.

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

Bally’s recognized a $ 144.9 million non-cash liability to reflect the net effect of the termination of naming rights on its remaining commercial rights intangible asset originally recorded at the time that the arrangement was agreed.

The Company is a party to other various legal and administrative proceedings which have arisen in the ordinary course of its business.

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Further, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters.

Master Video Lottery Terminal Contract

The current terms for the Twin River Casino Hotel and Tiverton Casino Hotel contracts with the Division of Lotteries of the Rhode Island Department of Revenue end on July 1, 2043.

The Tiverton Casino Hotel contract was automatically assigned, pursuant to Rhode Island law, from Newport Grand to Tiverton Casino Hotel upon commencement of gaming operations at the Tiverton Casino Hotel.

In connection with the Company’s joint venture with IGT, a joint venture was organized as the Rhode Island VLT Company, LLC to supply the State of Rhode Island with all VLTs at both Bally’s Twin River and Bally’s Tiverton.

Under the transaction agreement for the joint venture, dated December 21, 2022, the Company has agreed to pay $ 7.5 million to an affiliate of IGT, payable in two equal parts, the first was paid in the first half of 2023 and the second will be payable on or before June 15, 2024.

Capital Expenditure Commitments

Bally’s Atlantic City - As part of the regulatory approval process with the State of New Jersey, the Company committed to spend $ 100 million in capital expenditures over a five year period to invest in and improve the property.

The commitment calls for expenditures of no less than $ 85 million in aggregate by 2023.

The remaining $ 15 million of committed capital must be spent over 2024 and 2025.

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 December 31, 2023, approximately $ 7.7 million of the commitment 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.

3 unchanged sentences

In addition, land acquisition costs and financing costs, among other types of costs, are not counted toward meeting this requirement.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, approximately $ 1.02 billion of this commitment remains.

City of Chicago Guaranty

2 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.

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

3 unchanged sentences

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, beginning in 2024, and extending through 2028.

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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Collective Bargaining Agreements

As of December 31, 2024, the Company had approximately 10,000 employees.

Most of the Company’s employees in Rhode Island, Nevada and New Jersey are represented by a labor union and have collective bargaining agreements with the Company.

As of such date, the Company had 32 collective bargaining agreements covering approximately 3,040 employees.

A large number of our employees at our Casinos & Resorts properties within several US states are represented by a labor union and are subject to collective bargaining agreements with us.

As of December 31, 2024, the Company had 32 collective bargaining agreements covering approximately 3,442 employees.

All collective bargaining agreements are in good standing and most have been renegotiated with terms between three and five years.

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Casinos & Resorts, International Interactive and North America Interactive.

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 December 31, 2023 are:

The “Corporate & Other” category includes interest expense, select immaterial operating segments, unallocated corporate operating expenses, and other adjustments, such as the elimination of inter-segment transactions, to reconcile with the Company's consolidated results.

This category further accounts for other expenses such as share-based compensation, acquisition and transaction costs, and other non-recurring charges.

The Company’s three reportable segments as of December 31, 2024 include:

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

International Interactive - Gamesys’ European and Asian operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

As of December 31, 2023, the Company’s operations were predominately in the US, Europe and Asia with a less substantive footprint in other countries world-wide.

International Interactive - Includes the Company’s interactive European gaming operations, the Company’s global licensing revenue generating operations, as well as one casino property, Bally's Newcastle, in the UK.

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

The Company’s chief operating decision maker is its Executive Committee, consisting of the Chief Executive Officer, President, and Chief Financial Officer.

The Company uses consolidated Adjusted EBITDA and segment Adjusted EBITDAR to analyze the performance of its business and they are used as determining factors for performance-based compensation for members of the Company’s management team.

The Company uses consolidated Adjusted EBITDA and segment Adjusted EBITDAR when evaluating the operating performance of the business because management believes that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a more fulsome understanding of the core operating results and as a means to evaluate period-to-period performance.

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.

As of December 31, 2024, the Company’s operations were predominately in the US and Europe, 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.

1 unchanged sentence

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

Beginning in the third quarter of 2023, the Company updated its measure of segment performance to Adjusted EBITDAR (defined below) from Adjusted EBITDA.

The prior year results presented below were reclassified to conform to the new segment presentation.

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.

12 unchanged sentences

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

Operating income (costs) and (expenses):

Operating (expense) income:

Rent expense associated with triple net operating leases (2)

3 unchanged sentences

Restructuring ( 17,921 ) ( 31,014 ) —

Tropicana Las Vegas demolition and closure costs

( 59,838 ) — —

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

Gain from sale-leaseback, net 374,321 50,766 53,425

Gain on sale-leaseback, net 86,254 374,321 50,766

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

Diamond Sports Group non-cash liability ( 144,883 ) — —

Loss on disposal of business ( 27,796 ) — —

Merger Agreement costs (3)

( 14,808 ) — —

Payment service provider write-off (4)

( 6,333 ) — —

Diamond Sports Group non-cash settlement ( 1,114 ) ( 144,883 ) —

Other ( 28,148 ) ( 17,061 ) ( 14,236 )

Income (loss) from operations 104,009 ( 293,008 ) 93,382

(Loss) income from operations

( 258,328 ) 104,009 ( 293,008 )

Other income (expense)

Interest expense, net of interest income ( 277,561 ) ( 208,153 ) ( 117,924 )

Interest expense, net ( 289,629 ) ( 277,561 ) ( 208,153 )

Other ( 4,545 ) ( 12,186 ) 46,692

2 unchanged sentences

(Provision) benefit for income taxes ( 15,252 ) ( 1,762 ) 28,923

Net loss $ ( 187,500 ) $ ( 425,546 ) $ ( 114,697 )

$ ( 567,754 ) $ ( 187,500 ) $ ( 425,546 )

__________________________________

(1) Adjusted EBITDAR is defined as earnings, or loss, for the Company before interest expense, net of interest income, provision (benefit) for income taxes, depreciation and amortization, non-operating (income) expense, acquisition, integration and restructuring expense, share-based compensation, and certain other gains or losses as well as, when presented for our reporting segments, an adjustment related to the allocation of corporate cost among segments, plus rent expense associated with triple net operating leases.

Adjusted EBITDAR should not be construed as an alternative to GAAP net income, its most directly comparable GAAP measure, nor is it directly comparable to similarly titled measures presented by other companies.

(2) Consists primarily of the operating lease components contained within certain triple net leases with GLPI.

Refer to Note 18 “ Leases ” for further information.

(3) Costs incurred in connection with the Merger Agreement discussed in Note 1 “ General Information .”

(4) In the third quarter, 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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth significant segment expenses and other segment items by reportable segment (in thousands):

Years Ended December 31, Casinos & Resorts International Interactive North America Interactive

Revenue $ 1,363,113 $ 909,493 $ 177,872

segment expenses

Marketing costs 89,245 118,449 51,927

Gaming tax 190,505 158,691 48,015

Compensation 393,160 97,431 38,057

Other direct costs — 134,192 57,065

Casino property costs 141,218 — —

General and administrative 73,143 64,359 22,863

Other segment items (1)

105,324 ( 89 ) 181

Segment EBITDAR $ 370,518 $ 336,460 $ ( 40,236 )

Revenue $ 1,363,291 $ 973,210 $ 112,572

segment expenses

Marketing costs 71,356 144,296 42,039

Gaming tax 160,493 145,239 21,871

Compensation 379,835 104,538 40,620

Other direct costs — 179,060 40,510

Casino property costs 144,663 — —

General and administrative 63,759 56,360 22,759

Other segment items (1)

114,217 158 426

Segment EBITDAR $ 428,968 $ 343,559 $ ( 55,653 )

Revenue $ 1,227,563 $ 946,442 $ 81,700

segment expenses

Marketing costs 66,169 169,861 20,012

Gaming tax 148,945 134,338 6,268

Compensation 325,047 91,369 64,555

Other direct costs — 181,168 31,268

Casino property costs 125,940 — —

General and administrative 58,287 49,091 22,807

Other segment items (1)

104,245 ( 1,036 ) 2,519

Segment EBITDAR $ 398,930 $ 321,651 $ ( 65,729 )

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(1) Other Segment Items primarily includes Gaming and non-gaming expenses within our Casinos & Resorts reportable segment, and certain other immaterial costs and allocations within each of the Company’s reportable segments.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31,

4 unchanged sentences

North America Interactive 2,147 1,986 6,635

Other 163,509 9,536 708

Corporate & Other (1)

136,601 163,509 9,536

Total $ 199,827 $ 311,483 $ 212,256

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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(1) Includes 133.6 million, 162.1 million and 8.5 million related to our future Bally’s Chicago project during the years ended December 31, 2024, December 31, 2023 and December 31, 2022, 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 December 31, 2023, over 98 % of the Company’s long-lived assets, consisting primarily of property and equipment, are located within the US.

As of December 31, 2024, over 97 % of the Company’s long-lived assets, consisting primarily of property and equipment, are located within the United States.

LOSS PER SHARE

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SUBSEQUENT EVENTS

On January 29, 2024, the Company announced that it will cease its operations at the Tropicana Las Vegas on April 2, 2024 in order to redevelop the site with a state-of-the-art integrated resort and ballpark.

As a result of the closure, the Company expects to incur between $ 15 million to $ 20 million of severance charges and accelerated depreciation of approximately $ 80 million, during the first quarter of 2024.

On February 7, 2025, the Company completed its previously announced transactions with the Buyer Parties.

Pursuant to the terms of the Merger Agreement, Bally’s and Queen combined, with Queen shareholders receiving consideration of 30.5 million shares.

Thereafter, the Company paid cash consideration of $ 18.25 per share to holders of 22.9 million of the Company’s outstanding shares, funded through the issuance of $ 500.0 million in senior secured notes due in 2028.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Bally’s stockholders owning 17.9 million outstanding shares elected to retain their Bally’s stock by means of a rollover election and continue as stockholders of Bally’s.

As a result of the completion of the transactions contemplated by the Merger Agreement, there are 48.4 million shares outstanding as of February 7, 2025.

The warrants issued under the Framework Agreement, the Support Agreements, and those in connection with the acquisition of MKF, representing the right to purchase up to 11.6 million shares of Bally’s common stock, remain outstanding.

Refer to Note 1 “ General Information ,” Note 15 “ Strategic Partnership - Sinclair Broadcast Group ” and Note 20 “ Stockholders' Equity ” for further information.

Secured Notes

In connection with the closing of the Merger on February 7, 2025, the Company 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 Bally's 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, the notes can be redeemed at par.

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

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data