Bally's Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements listed below are filed as part of this Annual Report on Form 10-K. INDEX TO FINANCIAL STATEMENTS Page No. Financial Statements: Report of Independent Registered Public Accounting Firm (PCAOB ID 34 ) 56 Consolidated Balance Sheets at December 31, 202 4 and 202 3 58 Consolidated Statements of Operations for the years ended December 31, 202 4 , 202 3 and 202 2 59 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 202 4 , 202 3 and 202 2 60 Consolidated Statements Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022 61 Consolidated Statements of Cash Flows for the years ended December 31, 202 4 , 202 3 and 202 2 62 Notes to Consolidated Financial Statements 64 The accompanying audited consolidated financial statements of Bally’s Corporation (and together with its subsidiaries, the “Company” or “Bally’s”) have been prepared in accordance with the instructions to Form 10-K and Regulation S-X and include all information and footnote disclosures necessary for complete financial statements in conformity with accounting principles generally accepted in the US (“US GAAP”). Financial statement schedules have been omitted because they are not applicable, or the required information is included in the consolidated financial statements or the notes thereto. 55 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Bally’s Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Bally's Corporation and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). 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, 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 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 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. Critical Audit Matter Description The Company’s goodwill is tested annually for impairment, or more frequently if indicators of impairment exist, by comparing the fair value of the respective reporting units to their carrying value. The Company determines the fair value of its reporting units in consideration of the income-based and market-based approaches. 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, 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. Therefore, performing audit procedures to evaluate the reasonableness of these estimates and assumptions involved a high degree of auditor judgment and increased extent of effort, including the need to involve our fair value specialists. 56 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the International Interactive forecasts, discount rates, and market multiples used by management to estimate the fair value of the International Interactive reporting unit included the following, among others: • We tested the effectiveness of controls over determining the fair value of the Company’s International Interactive reporting unit, including controls over the International Interactive forecasts and the selection of discount rates and market multiples. • We evaluated management’s ability to accurately project the International Interactive forecasts by performing a retrospective review of actual results to management’s historical forecasts. • We evaluated the reasonableness of management’s projected International Interactive forecasts by: ◦ Comparing the International Interactive forecasts to information included in the Company’s communications to the Board of Directors, industry reports, and analyst reports for the Company and certain of its peer companies; ◦ Comparing the International Interactive forecasts to historical financial results; ◦ Evaluating the impact of changes in the regulatory environment on management’s forecasts; ◦ Conducting inquiries with management; and ◦ Evaluating whether the International Interactive 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 International Interactive discount rate and market multiples 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; ◦ Testing the source information underlying the determination of the market multiples; and ◦ Developing a range of independent estimates and comparing those to the market multiples selected by management. /s/ Deloitte & Touche LLP New York, New York March 17, 2025 We have served as the Company’s auditor since 2015. 57 BALLY’S CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except share data) December 31, 2024 2023 Assets Cash and cash equivalents $ 171,233 $ 163,194 Restricted cash 60,021 152,068 Accounts receivable, net 55,486 70,328 Inventory 19,317 14,629 Tax receivable 26,345 62,215 Prepaid expenses and other current assets 115,471 108,096 Assets held for sale — 1,815 Total current assets 447,873 572,345 Property and equipment, net 630,702 1,174,888 Right of use assets, net 1,544,936 1,160,288 Goodwill 1,799,944 1,935,803 Intangible assets, net 1,307,343 1,871,428 Deferred tax asset 2,309 36,034 Other assets 127,030 110,317 Total assets $ 5,860,137 $ 6,861,103 Liabilities and Stockholders’ Equity Current portion of long-term debt $ 19,450 $ 19,450 Current portion of lease liabilities 65,827 54,842 Accounts payable 85,771 69,161 Accrued income taxes 25,468 78,301 Accrued and other current liabilities 481,292 651,719 Liabilities related to assets held for sale — 1,307 Total current liabilities 677,808 874,780 Long-term debt, net 3,299,323 3,643,185 Long-term portion of financing obligation — 200,000 Long-term portion of lease liabilities 1,554,479 1,148,407 Deferred tax liability 118,214 125,590 Other long-term liabilities 179,411 233,287 Total liabilities 5,829,235 6,225,249 Commitments and contingencies (Note 22) Stockholders’ equity: Common stock ($ 0.01 par value; 200,000,000 shares authorized; 40,787,007 and 39,973,202 shares issued; 40,787,007 and 39,973,202 shares outstanding 408 400 Preferred stock ($ 0.01 par value; 10,000,000 shares authorized; no shares outstanding) — — Additional paid-in-capital 1,414,410 1,400,479 Treasury stock, at cost, no shares outstanding as of December 31, 2024 and 2023 — — Accumulated deficit ( 1,123,649 ) ( 555,895 ) Accumulated other comprehensive loss ( 260,267 ) ( 209,558 ) Total Bally’s Corporation stockholders’ equity 30,902 635,426 Non-controlling interest — 428 Total stockholders’ equity 30,902 635,854 Total liabilities and stockholders’ equity $ 5,860,137 $ 6,861,103 The accompanying notes are an integral part of these consolidated financial statements. 58 BALLY’S CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Years Ended December 31, 2024 2023 2022 Revenue: Gaming $ 2,051,668 $ 1,992,041 $ 1,846,124 Non-gaming 398,810 457,032 409,581 Total revenue 2,450,478 2,449,073 2,255,705 Operating (income) costs and expenses: Gaming 934,063 888,937 812,918 Non-gaming 189,088 216,239 196,318 General and administrative 1,043,486 1,113,976 825,706 Gain on sale-leaseback, net ( 86,254 ) ( 374,321 ) ( 50,766 ) Impairment charges 248,879 149,825 463,978 Depreciation and amortization 379,544 350,408 300,559 Total operating costs and expenses 2,708,806 2,345,064 2,548,713 (Loss) income from operations ( 258,328 ) 104,009 ( 293,008 ) Other (expense) income: Interest expense, net ( 289,629 ) ( 277,561 ) ( 208,153 ) Other non-operating income (expense), net ( 4,545 ) ( 12,186 ) 46,692 Total other expense, net ( 294,174 ) ( 289,747 ) ( 161,461 ) Loss before income taxes ( 552,502 ) ( 185,738 ) ( 454,469 ) Provision (benefit) for income taxes 15,252 1,762 ( 28,923 ) Net loss $ ( 567,754 ) $ ( 187,500 ) $ ( 425,546 ) Basic loss per share $ ( 11.71 ) $ ( 3.51 ) $ ( 7.32 ) Weighted average common shares outstanding, basic 48,468,887 53,350,817 58,111,699 Diluted loss per share $ ( 11.71 ) $ ( 3.51 ) $ ( 7.32 ) Weighted average common shares outstanding, diluted 48,468,887 53,350,817 58,111,699 The accompanying notes are an integral part of these consolidated financial statements. 59 BALLY’S CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Years Ended December 31, 2024 2023 2022 Net loss $ ( 567,754 ) $ ( 187,500 ) $ ( 425,546 ) Other comprehensive income (loss): Foreign currency translation adjustments ( 84,542 ) 118,781 ( 270,151 ) Defined benefit pension plan adjustments, net of tax 860 542 1,320 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 $ ( 618,463 ) $ ( 101,418 ) $ ( 694,377 ) The accompanying notes are an integral part of these consolidated financial statements. 60 BALLY’S CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except shares) Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings (Deficit) Accumulated Other Comprehensive Loss Non-controlling Interest Total Stockholders’ Equity Shares Outstanding Amount Balance as of December 31, 2021 52,254,477 $ 530 $ 1,849,068 $ ( 29,166 ) $ ( 181,581 ) $ ( 26,809 ) $ 3,760 $ 1,615,802 Issuance of restricted stock and other stock awards 458,603 4 ( 5,957 ) 429 — — — ( 5,524 ) Share-based compensation — — 27,912 — — — — 27,912 Retirement of treasury shares — ( 74 ) ( 253,783 ) 182,103 71,754 — — — Share repurchases (including tender offer) ( 6,621,841 ) — — ( 153,366 ) — — — ( 153,366 ) Stock options exercised 20,000 — 86 — — — — 86 Penny warrants exercised 383,934 4 — — — — — 4 Issuance of MKF penny warrants — — 12,010 — — — — 12,010 Shares issued for purchase of SportCaller 107,832 1 3,699 — — — — 3,700 Acquired non-controlling interest 67,052 1 3,331 — — — ( 3,332 ) — Other comprehensive loss — — — — — ( 268,831 ) — ( 268,831 ) Net loss — — — — ( 425,546 ) — — ( 425,546 ) Balance as of December 31, 2022 46,670,057 466 1,636,366 — ( 535,373 ) ( 295,640 ) 428 806,247 Issuance of restricted stock and other stock awards 444,115 4 ( 2,762 ) 529 — — — ( 2,229 ) Share-based compensation — — 24,074 — — — — 24,074 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 — — — — — 86,082 — 86,082 Net loss — — — — ( 187,500 ) — — ( 187,500 ) Balance as of December 31, 2023 39,973,202 400 1,400,479 — ( 555,895 ) ( 209,558 ) 428 635,854 Issuance of restricted stock and other stock awards 723,990 7 ( 2,821 ) — — — — ( 2,814 ) Share-based compensation — — 14,752 — — — — 14,752 Settlement of consideration 81,190 1 ( 178 ) — — — — ( 177 ) Acquired non-controlling interest 8,625 — 428 — — — ( 428 ) — Other — — 1,750 — — — — 1,750 Other comprehensive loss — — — — — ( 50,709 ) — ( 50,709 ) Net loss — — — — ( 567,754 ) — — ( 567,754 ) Balance as of December 31, 2024 40,787,007 $ 408 $ 1,414,410 $ — $ ( 1,123,649 ) $ ( 260,267 ) $ — $ 30,902 The accompanying notes are an integral part of these consolidated financial statements. 61 BALLY’S CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net loss $ ( 567,754 ) $ ( 187,500 ) $ ( 425,546 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 379,544 350,408 300,559 Non-cash lease expense 58,727 56,945 32,438 Share-based compensation 14,752 24,074 27,912 Impairment charges 248,879 149,825 463,978 Amortization of debt discount and debt issuance costs 11,707 11,312 10,896 (Gain) loss on extinguishment of debt — ( 4,044 ) — 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 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 ) Proceeds from interest rate contracts 15,312 — — Foreign exchange loss (gain) ( 10,271 ) 11,019 ( 516 ) Other operating activities 17,031 11,166 9,606 Changes in current operating assets and liabilities ( 19,603 ) 13,105 37,114 Net cash provided by operating activities 113,999 188,614 270,971 Cash flows from investing activities: Cash paid for acquisitions, net of cash acquired ( 788 ) ( 93,900 ) ( 146,317 ) 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 Capital expenditures ( 199,827 ) ( 311,483 ) ( 212,256 ) 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 4,058 — — Acquisition of gaming licenses ( 2,508 ) ( 145,485 ) ( 55,117 ) Purchase of equity securities — — ( 3,175 ) Other intangible asset acquisitions ( 929 ) — ( 665 ) Other investing activities ( 3,588 ) ( 22,723 ) 1,729 Net cash provided by (used in) investing activities 97,835 ( 207,791 ) ( 302,922 ) Cash flows from financing activities: Issuance of long-term debt 440,000 448,000 597,000 Repayments of long-term debt ( 794,450 ) ( 280,070 ) ( 564,450 ) Deferred payables 73,709 — — Proceeds from Bally’s Chicago land financing obligation — — 200,000 Payment of deferred consideration ( 3,102 ) — ( 30,025 ) Share repurchases — ( 99,081 ) ( 153,366 ) Other financing activities ( 3,997 ) ( 3,094 ) ( 5,922 ) Net cash (used in) provided by financing activities ( 287,840 ) 65,755 43,237 Effect of foreign currency on cash and cash equivalents ( 8,002 ) 5,153 ( 20,722 ) Change in cash and cash equivalents and restricted cash classified as assets held for sale — ( 1,653 ) ( 220 ) Net change in cash and cash equivalents and restricted cash ( 84,008 ) 50,078 ( 9,656 ) Cash and cash equivalents and restricted cash, beginning of period 315,262 265,184 274,840 Cash and cash equivalents and restricted cash, end of period $ 231,254 $ 315,262 $ 265,184 62 Years Ended December 31, 2024 2023 2022 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 314,245 $ 249,510 $ 200,901 Cash received from income tax refunds, net of cash paid 2,230 14,444 ( 38,199 ) Non-cash investing and financing activities: Unpaid property and equipment $ 20,256 $ 22,397 $ 24,080 Unpaid internally developed software 5,419 1,891 — Sale of business in exchange for note receivable 32,868 — — Bally’s Chicago - land development liability — 47,739 — Investment in GLP Capital, L.P. 6,837 14,412 — Investment in Rhode Island VLT Company, LLC — 17,832 — Non-controlling interest acquired ( 428 ) — ( 3,332 ) Net purchase consideration for acquisitions — 58,580 — Years Ended December 31, 2024 2023 2022 Reconciliation of cash and cash equivalents and restricted cash: Cash and cash equivalents $ 171,233 $ 163,194 $ 212,515 Restricted cash 60,021 152,068 52,669 Total cash and cash equivalents and restricted cash $ 231,254 $ 315,262 $ 265,184 The accompanying notes are an integral part of these consolidated financial statements. 63 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL INFORMATION 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. 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 Bally’s Twin River Lincoln Casino Resort (“Bally’s Twin River”) Lincoln, Rhode Island Casino and Resort 2004 Bally’s Arapahoe Park Aurora, Colorado Racetrack/OTB Site 2004 Hard Rock Hotel & Casino Biloxi (“Hard Rock Biloxi”) (2) Biloxi, Mississippi Casino and Resort 2014 Bally’s Tiverton Casino & Hotel (“Bally’s Tiverton”) (2) Tiverton, Rhode Island Casino and Hotel 2018 Bally’s Dover Casino Resort (“Bally’s Dover”) (2) Dover, Delaware Casino, Resort and Raceway 2019 Bally’s Black Hawk (“Bally's Black Hawk”) (1)(2) Black Hawk, Colorado Three Casinos 2020 Bally’s Kansas City Casino (“Bally’s Kansas City”) (2) Kansas City, Missouri Casino 2020 Bally’s Vicksburg Casino (“Bally’s Vicksburg”) Vicksburg, Mississippi Casino and Hotel 2020 Bally’s Atlantic City Casino Resort (“Bally’s Atlantic City”) Atlantic City, New Jersey Casino and Resort 2020 Bally’s Shreveport Casino & Hotel (“Bally’s Shreveport”) (2) Shreveport, Louisiana Casino and Hotel 2020 Bally’s Lake Tahoe Casino Resort (“Bally’s Lake Tahoe”) Lake Tahoe, Nevada Casino and Resort 2021 Bally’s Evansville Casino & Hotel (“Bally’s Evansville”) (2) Evansville, Indiana Casino and Hotel 2021 Bally’s Quad Cities Casino & Hotel (“Bally’s Quad Cities”) (2) Rock Island, Illinois Casino and Hotel 2021 Bally’s Chicago Casino (“Bally’s Chicago”) (3) Chicago, Illinois Casino 2023 Bally’s Golf Links at Ferry Point (“Bally’s Golf Links”) Bronx, New York Golf Course 2023 __________________________________ (1) Includes Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino. (2) Properties leased from Gaming and Leisure Properties, Inc. (“GLPI”). Refer to Note 18 “ Leases ” for further information. (3) Temporary casino facility as a permanent casino resort is being constructed. 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. 64 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. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation 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 consolid ation. Certain prior year amounts have been reclassified to conform to the current year’s presentation. The financial statements of our foreign subsidiaries are translated into US Dollars (“USD”) using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses are included in net income (loss). Equity Method Investments 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. The 40 % ownership in the joint venture qualifies for equity method accounting. 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 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 The Company evaluates entities for which control is achieved through means other than voting rights to determine if it is the primary beneficiary of a VIE. An entity is a VIE if it has any of the following characteristics (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support (ii) equity holders, as a group, lack the characteristics of a controlling financial interest or (iii) the entity is structured with non-substantive voting rights. The primary beneficiary of the VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company consolidates its investment in a VIE when it determines that it is its primary beneficiary. In determining whether it is the primary beneficiary of the VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities and significance of the Company’s investment and other means of participation in the VIE’s expected profits/losses. 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. 65 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. The Company performs this analysis on an ongoing basis. Use of Estimates in the Preparation of Financial Statements 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 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. Actual results may differ from these estimates. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents includes cash balances and highly liquid investments with an original maturity of three months or less. 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 The Company’s financial instruments which potentially expose the Company to concentrations of credit risk consisted of cash and cash equivalents and trade receivables. 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. Accounts Receivable, Net Accounts receivable, net consists of the following: December 31, (in thousands) 2024 2023 Accounts due from Rhode Island and Delaware (1) $ 14,135 $ 13,028 Gaming receivables 20,700 26,127 Non-gaming receivables 27,803 37,221 Accounts receivable 62,638 76,376 Less: Allowance for credit losses ( 7,152 ) ( 6,048 ) Accounts receivable, net $ 55,486 $ 70,328 __________________________________ (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 credit losses is as follows: 66 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, (in thousands) 2024 2023 2022 Balance at beginning of year $ 6,048 $ 5,789 $ 4,454 Charges to expense 1,990 1,250 1,649 Deductions ( 886 ) ( 991 ) ( 602 ) Other adjustments — — 288 Balance at end of year $ 7,152 $ 6,048 $ 5,789 Inventory Inventory is stated at the lower of cost or net realizable value on a first-in, first-out basis and consists primarily of food, beverage, promotional items and other supplies. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and impairment losses, if applicable. Expenditures for renewals and betterments that extend the life or value of an asset are capitalized and expenditures for repairs and maintenance are charged to expense as incurred. The costs and related accumulated depreciation applicable to assets sold or disposed of are removed from the balance sheet accounts and the resulting gains or losses are reflected in the consolidated statements of operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets or the related lease term, if any, as follows: Years Land improvements 10 - 20 Building and improvements 2 - 50 Equipment 2 - 10 Furniture and fixtures 2 - 10 Development costs directly associated with the acquisition, development and construction of a project are capitalized as a cost of the project during the periods in which activities necessary to prepare the property for its intended use are in progress. Interest costs associated with major construction projects are capitalized as part of the cost of the constructed assets. When no debt is incurred specifically for a project, interest is capitalized on amounts expended for the project using the weighted average cost of borrowing. Capitalization of interest ceases when the project (or discernible portions of the project) is substantially complete. If substantially all of the construction activities of a project are suspended, capitalization of interest will cease until such activities are resumed. 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. Leases 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. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (i) the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) the right to direct the use of the identified asset. Upon adoption of Accounting Standards Codification (“ASC”) 842, Leases , (“ASC 842”) the Company elected to account for lease and non-lease components as a single component for all classes of underlying assets. Additionally, the Company elected to not recognize short-term leases (defined as leases that are less than 12 months and do not contain purchase options) within the consolidated balance sheets. 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. 67 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Certain of the Company’s leases include renewal options and escalation clauses; renewal options are included in the calculation of the lease liabilities and right of use assets when the Company determines it is reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses and consumer price index (“CPI”) increases. 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. Goodwill Goodwill consists of the excess of acquisition costs over the fair value of net assets acquired in business combinations. Goodwill is not amortized, but is reviewed for impairment annually as of October 1st, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value, by comparing the fair value of each reporting unit to its carrying value, including goodwill. When assessing goodwill for impairment, first, qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Items that are considered in the qualitative assessment include, but are not limited to, the following: macroeconomic conditions, industry and market conditions and overall financial performance. 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. Intangible Assets The Company’s intangible assets primarily consist of customer relationships, developed technology, internally developed software, gaming licenses and trade names. The Company also has a commercial rights intangible asset obtained through the Framework Agreement (as defined herein). Refer to Note 15 “ Strategic Partnership - Sinclair Broadcast Group ” for further information regarding the Sinclair Broadcast Group (“Sinclair”) commercial rights. 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. Finite-lived intangible assets are amortized over their remaining useful lives in a pattern in which the economic benefits of the intangible asset are consumed, which is generally on a straight-line basis. The Company reviews the carrying amount of its finite-lived intangible assets for possible impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Should events and circumstances indicate finite-lived intangible assets may not be recoverable, the Company performs a test for recoverability whereby estimated undiscounted cash flows are compared to the carrying values of the assets. Should the estimated undiscounted cash flows exceed the carrying value, no impairments are recorded. If the undiscounted cash flows do not exceed the carrying values, an impairment is recorded based on the fair value of the asset. Customer Relationships - The Company considers customer relationships to be finite-lived intangible assets, which are amortized over their estimated useful lives, and are recognized as the result of a business combination. Developed Technology - Developed technology relates to the design and development of sports betting and casino gaming software and online gaming products acquired through the Company’s acquisitions of the businesses within the International Interactive and North America Interactive segments. Developed technology is considered to be a finite-lived intangible asset, which are amortized over their estimated useful lives, which is generally between three to 10 years. Internally Developed Software - Software that is developed for internal use is accounted for pursuant to ASC 350-40, Intangibles, Goodwill and Other - Internal-Use Software . Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal use software. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Once placed into service, internally developed software is amortized on a straight-line basis over its estimated useful life, which is generally five years. All other expenditures, including those incurred in order to maintain an intangible asset’s current level of performance, are expensed as incurred. 68 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. The Company also has certain gaming licenses, including its VLT licenses, and trade names, which are considered to be indefinite lived based on future expectations of operating its gaming properties indefinitely, continuing to brand its corporate name and certain properties under the Bally’s trade name indefinitely and continuing to indefinitely brand its online casino offerings within the International Interactive segment with the trade names acquired through the Gamesys acquisition. Intangible assets not subject to amortization are reviewed for impairment annually as of October 1 and between annual test dates whenever events or changes in circumstances may indicate that the carrying amount of the related asset may exceed its fair value. Refer to Note 11 “ Goodwill and Intangible Assets ” for further information. Long-lived Assets The Company reviews its long-lived assets, other than goodwill and intangible assets not subject to amortization, for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an asset is still under development, the analysis includes the remaining construction costs. 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 Debt issuance costs and debt discounts incurred by the Company in connection with obtaining and amending financing have been included as a component of the carrying amount of debt in the consolidated balance sheets. Debt issuance costs and debt discounts are amortized over the contractual term of the debt to interest expense. Debt issuance costs of the revolving credit facility are amortized on a straight-line basis, while all other debt issuance costs and debt discounts are amortized using the effective interest method. 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. Self-Insurance Reserves The Company is self-insured for employee medical insurance coverage, general liability and workers’ compensation up to certain stop-loss amounts. 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 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. 69 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 The Company accounts for its share-based compensation in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”). The Company has two share-based employee compensation plans, which are described more fully in Note 19 “ Equity Plans .” Share-based compensation consists of stock options, time-based restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and performance-based restricted stock units (“PSUs”). The grant date closing price per share of the Company’s stock is used to estimate the fair value of RSUs and RSAs. Stock options are granted at exercise prices equal to the fair market value of the Company’s stock at the dates of grant. The Company recognizes share-based compensation expense on a straight-line basis over the requisite service period of the individual grants. PSUs vest, when and if earned, in accordance with the terms of the related PSU award agreements. The Company recognizes share-based compensation expense based on the target number of shares of common stock that may be earned pursuant to the award and the Company’s stock price on the date of grant and subsequently adjusts expense based on actual and forecasted performance compared to planned targets. Forfeitures are recognized as reductions to share-based compensation when they occur. Warrant/Option Liabilities The Company accounts for Penny Warrants and Options in accordance with ASC 815-40, Contracts in an Entity’s Own Equity . The Penny Warrants and Options are classified in equity because they are indexed to the Company’s own stock and meet all conditions for equity classification. The Performance Warrants are accounted for as a derivative liability in accordance with ASC 815, Derivatives and Hedging (“ASC 815”) 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. The Performance Warrants are marked to market each reporting period, with changes in fair value recorded in “Other non-operating income (expense), net” in the consolidated statements of operations. Refer to Note 15 “ Strategic Partnership - Sinclair Broadcast Group ” for further information. Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy to determine equity or asset/liability classification for contracts involving the Company’s own equity that require cash settlement if sufficient shares are not available to settle the contracts in equity. Under this policy, the Company has elected to allocate available shares to contracts based on the order in which they become exercisable. Revenue The Company accounts for revenue earned from contracts with customers under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company generates revenue from four principal sources: 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. 70 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. 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, 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. Income Taxes The Company prepares its income tax provision in accordance with ASC 740, Income Taxes . Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the rate change is enacted. A valuation allowance is required when it is “more likely than not” that all or a portion of the deferred taxes will not be realized. 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. 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 The Company’s functional currency is the US Dollar (“USD”). Foreign subsidiaries with a functional currency other than USD translate assets and liabilities at current exchange rates at the end of the reporting periods, while income and expense accounts are translated at average exchange rates for the respective periods. Translation adjustments resulting from this process are recorded to other comprehensive income (loss). 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. 71 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Comprehensive Income (Loss) Comprehensive income (loss) includes changes in equity that result from transactions and economic events from non-owner sources. Comprehensive income (loss) consists of net income (loss), changes in defined benefit pension plan, net of tax, foreign currency translation adjustments and unrealized gains (losses) relating to cash flow and net investment hedges, net of tax. Treasury Stock The Company records the repurchase of shares of common stock at cost based on the settlement date of the transaction. These shares are classified as treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. Business Combinations The Company accounts for its acquisitions in accordance with ASC 805, Business Combinations . The Company initially allocates the purchase price of an acquisition to the assets acquired and liabilities assumed based on their estimated fair values, with any excess of consideration transferred recorded as goodwill. If the estimated fair value of net assets acquired and liabilities assumed exceeds the purchase price, the Company records a gain on bargain purchase in earnings in the period of acquisition. The results of operations of acquisitions are included in the consolidated financial statements from their respective dates of acquisition. Costs incurred to complete the business combination such as investment banking, legal and other professional fees are not considered part of consideration and are charged to general and administrative expense as they are incurred. Segments Operating segments are identified as components of an enterprise that engage in business activities from which it recognizes revenues and expenses, and for which discrete financial information is available and regularly reviewed by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. Fair Value Measurements Fair value is determined using the principles of ASC 820, Fair Value Measurement . Fair value is described as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes and defines the inputs to valuation techniques as follows: • Level 1: Observable quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs are observable for the asset or liability either directly or through corroboration with observable market data. • Level 3: Unobservable inputs. The inputs used to measure the fair value of an asset or a liability are categorized within levels of the fair value hierarchy. The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the measurement. Derivative Instruments Designated as Hedging Instruments Cross Currency Swaps - The Company uses fixed-to-fixed cross-currency swap agreements to hedge its exposure to adverse foreign currency exchange rate movements for its foreign operations. The Company has elected the spot method for designating these contracts as net investment hedges. These derivative arrangements qualify as net investment hedges under ASC 815, Derivatives and Hedging (“ASC 815”), with the gain or loss resulting from changes in the spot value of the derivative reported in other comprehensive income (loss) with amounts reclassified out of other comprehensive income (loss) into earnings when the hedged net investment is either sold or substantially liquidated. Refer to Note 12 “ Derivative Instruments ” for further information. Interest Rate Contracts - The Company uses interest rate derivatives to hedge its exposure to variability in cash flows on its floating-rate debt to add stability to interest expense and manage its exposure to interest rate movements. The Company’s interest rate swaps and collars are designated as cash flow hedges under ASC 815, with changes in the fair value reported in 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. Refer to Note 12 “ Derivative Instruments ” for further information. 72 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. 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. 4. CONSOLIDATED FINANCIAL INFORMATION General and Administrative Expense Amounts included in General and administrative expense for the years ended December 31, 2024, 2023 and 2022 were as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Advertising, general and administrative $ 957,118 $ 888,787 $ 776,226 Acquisition and integration 24,729 49,292 49,480 Restructuring charges, net 17,921 31,014 — Loss on disposal of business (1) 27,796 — — Merger costs (2) 14,808 — — 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 ) 73 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other Non-Operating Income (Expense) Amounts included in Other non-operating income (expense), net for the years ended December 31, 2024, 2023 and 2022 were as follows: Year Ended December 31, (in thousands) 2024 2023 2022 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 5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Standards Implemented 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 In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative . The amendments in this update align the requirements in the ASC to the Securities and Exchange Commission’s (“SEC”) regulations. The effective date for each amended topic in the ASC is the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. If by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. 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. 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures . The amendments in this update enhance the transparency and decision usefulness of income tax disclosures. This update will be effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently in the process of evaluating the impact of this amendment on its consolidated financial statements and related disclosures. 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. 74 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6 . 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. 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. 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. 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. 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. The performance obligation related to loyalty program incentives are deferred and recognized as revenue upon redemption by the customer. 75 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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, 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: Years Ended December 31, (in thousands) 2024 2023 2022 Hotel $ 82,520 $ 94,650 $ 87,540 Food and beverage 82,025 80,899 70,476 Retail, entertainment and other 9,722 11,100 10,195 $ 174,267 $ 186,649 $ 168,211 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. 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. 76 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table provides a disaggregation of total revenue by segment (in thousands): Years Ended December 31, Casinos & Resorts International Interactive North America Interactive Total 2024 Gaming $ 1,008,361 $ 893,756 $ 149,551 $ 2,051,668 Non-gaming: Hotel 148,693 — — 148,693 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 Total non-gaming revenue 354,752 15,737 28,321 398,810 Total revenue $ 1,363,113 $ 909,493 $ 177,872 $ 2,450,478 2023 Gaming $ 954,725 $ 952,921 $ 84,395 $ 1,992,041 Non-gaming: Hotel 200,650 — — 200,650 Food and beverage 143,521 — — 143,521 Retail, entertainment and other 64,395 20,289 28,177 112,861 Total non-gaming revenue 408,566 20,289 28,177 457,032 Total revenue $ 1,363,291 $ 973,210 $ 112,572 $ 2,449,073 2022 Gaming $ 907,431 $ 899,934 $ 38,759 $ 1,846,124 Non-gaming: Hotel 153,750 — — 153,750 Food and beverage 115,322 — — 115,322 Retail, entertainment and other 51,060 46,508 42,941 140,509 Total non-gaming revenue 320,132 46,508 42,941 409,581 Total revenue $ 1,227,563 $ 946,442 $ 81,700 $ 2,255,705 Contract Assets and Contract Related Liabilities 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. The Company has the following liabilities related to contracts with customers: 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 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 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. Unpaid wagers include the Company’s outstanding chip liability and unpaid slot, pari-mutuel and sports betting tickets. 77 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Liabilities related to contracts with customers as of December 31, 2024 and 2023 were as follows: December 31, 2024 2023 Loyalty programs $ 12,167 $ 16,803 Advanced deposits from customers 26,141 29,052 Unpaid wagers 32,992 20,481 Total $ 71,300 $ 66,336 The Company recognized $ 30.5 million, $ 35.7 million and $ 31.0 million of revenue related to loyalty program redemptions for the years ended December 31, 2024, 2023 and 2022, respectively. 7 . BUSINESS COMBINATIONS Casinos & Resorts Acquisitions Bally’s Golf Links - On September 12, 2023, the Company completed the acquisition of Trump Golf Links at Ferry Point, subsequently renamed Bally’s Golf Links at Ferry Point, which includes the assignment of a license agreement to operate an 18-hole links-style golf course located in the Bronx, New York. The total purchase consideration included cash paid, net of cash acquired and net working capital adjustments, which amounted to $ 55.0 million. This acquisition continues the Company’s strategic objective of developing a diversified portfolio within its Casinos & Resorts segment. Total purchase consideration also includes contingent consideration valued at $ 58.6 million, which is the fair value, under GAAP, of expected cash payments totaling up to $ 125 million to the seller, based upon future events, which are uncertain. The contingent consideration was recorded at fair value, using discounted cash flow analyses with level 3 inputs, and is remeasured quarterly, with fair value adjustments recognized in earnings, until the contingencies are resolved. Inputs to this valuation approach include the Company’s estimated probabilities of achieving the conditions for payment, expected terms between 1.5 and 3 years, and discount rates between 7.2 % and 7.8 %. The settlement of the contingent consideration liabilities will be due to the seller in the event the license agreement is extended or if the Company is successful in its bid for a casino license. Tropicana Las Vegas - On September 26, 2022, the Company completed its acquisition of Tropicana Las Vegas for $ 148.2 million. 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’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. 78 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 Casinos & Resorts acquisitions as of December 31, 2024: Acquired during the year ended December 31, 2023 2022 (in thousands) Bally’s Golf Links Tropicana Las Vegas Final (3) Final(3) Total current assets $ 1,108 $ 7,924 Property and equipment, net 505 136,116 Right of use assets, net — 164,884 Goodwill 103,824 8,794 Intangible assets, net (1)(2) 6,500 5,140 Other assets 2,000 766 Total current liabilities ( 345 ) ( 10,129 ) Lease liabilities — ( 164,884 ) Other long-term liabilities — ( 395 ) Total purchase price $ 113,592 $ 148,216 __________________________________ (1) Bally’s Golf Links’ intangible assets include a concessionaire license of $ 6.5 million, which is being amortized over its estimated useful life of approximately 12 years. (2) 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) 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. 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” in the consolidated statements of operations. International Interactive Acquisition Casino Secret - On January 5, 2023, the Company completed the acquisition of BACA Limited (“Casino Secret”), a European based online casino that offers slots, tables and live dealer games to Asian markets for total consideration of $ 50.4 million. Cash paid by the Company, net of $ 8.3 million cash acquired, was $ 38.7 million, excluding transaction costs. 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 Final (2) Total current assets $ 8,862 Property and equipment, net 50 Intangible assets, net (1) 29,471 Goodwill 18,422 Total current liabilities ( 6,371 ) Total purchase price $ 50,434 __________________________________ (1) Casino Secret intangible assets include player relationships and trade names of $ 26.0 million and $ 3.5 million, respectively, which are both being amortized on a straight-line basis over their estimated useful lives of approximately 7 years. (2) The Company did not record adjustments to the preliminary purchase price allocation during year ended December 31, 2024. 79 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. 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 International Interactive reportable segment. The goodwill of the acquisition has been assigned, as of the acquisition date, to the Company’s International Interactive reportable segment. The Company incurred $ 1.2 million of acquisition costs related to the above International Interactive acquisition during the year ended December 31, 2023. 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. 8 . DISPOSITIONS 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. 80 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 9. PREPAID EXPENSES AND OTHER CURRENT ASSETS As of December 31, 2024 and 2023, prepaid expenses and other assets was comprised of the following: December 31, (in thousands) 2024 2023 Services and license agreements $ 43,141 $ 33,182 Taxes and licenses 18,988 19,973 Short term notes receivable 17,342 — Prepaid marketing 11,952 8,685 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 Total prepaid expenses and other current assets $ 115,471 $ 108,096 10. PROPERTY AND EQUIPMENT As of December 31, 2024 and 2023, property and equipment, net was comprised of the following: December 31, (in thousands) 2024 2023 Land and improvements $ 49,553 $ 401,208 Building and improvements 370,086 673,071 Equipment 280,946 264,398 Furniture and fixtures 64,109 68,746 Construction in process 149,906 73,810 Total property, plant and equipment 914,600 1,481,233 Less: Accumulated depreciation (1) ( 283,898 ) ( 306,345 ) Property and equipment, net $ 630,702 $ 1,174,888 __________________________________ (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, 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 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 81 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. GOODWILL AND INTANGIBLE ASSETS 2024 Annual Impairment Assessment As of October 1, 2024, the Company performed its annual impairment assessment of goodwill and long lived assets for all reporting units and asset groups. Each individual property within the Casinos and Resorts operating segment is determined to be its own reporting unit and asset group. 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 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 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. Items that were considered included, but were not limited to, the following: 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 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. 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. 82 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. The decline in value of the trademark was primarily driven by the change in useful life and the de-emphasis of the trademark for other newer brands in Asia and Rest of World, resulting in a decline in actual and projected revenues attributable to the trademark as compared to when the fair value was determined during the purchase price allocation of the Gamesys acquisition. These charges are recorded within “Impairment charges” in the consolidated statements of operations. 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 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. 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, 2023. If future results vary significantly from current estimates and related projections, the Company may be required to record impairment charges. 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. 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 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. 83 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2022 Impairment Assessment For the North America Interactive reporting unit and asset group, primarily due to a decline in actual and projected revenues, the Company determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value and therefore, a quantitative impairment analysis was performed. As a result of the analysis, the Company recorded an aggregate $ 390.7 million non-cash impairment charge in its North America Interactive reporting unit. The Company allocated the loss first to intangible assets, in the amount of $ 159.1 million, and then the residual of $ 231.6 million to goodwill. 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. 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 (3) International Interactive North America Interactive Total Goodwill as of December 31, 2022 (1) $ 209,257 $ 1,497,205 $ 39,740 $ 1,746,202 Goodwill from current year business combinations 104,032 18,422 — 122,454 Effect of foreign exchange — 70,963 184 71,147 Purchase accounting adjustments on prior year business combinations 204 — — 204 Current year divestiture — — ( 4,204 ) ( 4,204 ) Goodwill as of December 31, 2023 (1)(3) $ 313,493 $ 1,586,590 $ 35,720 $ 1,935,803 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 ) Purchase accounting adjustments on prior year business combinations ( 208 ) — — ( 208 ) Current year divestiture — ( 20,657 ) — ( 20,657 ) Goodwill as of December 31, 2024 (2)(3) $ 313,285 $ 1,451,273 $ 35,386 $ 1,799,944 __________________________________ (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. 84 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): Intangible assets, net as of December 31, 2022 $ 1,961,938 Intangible assets from current year business combinations 35,971 Effect of foreign exchange 46,926 Impairment charges ( 136,404 ) Internally developed software 47,091 Other intangibles acquired (1) 147,619 Less: Accumulated amortization ( 231,713 ) Intangible assets, net as of December 31, 2023 $ 1,871,428 Impairment charges ( 164,486 ) Derecognition of Commercial rights - Sinclair ( 202,572 ) Internally developed software 48,392 Effect of foreign exchange ( 24,871 ) Other intangibles acquired 3,059 Intangible assets disposed ( 2,074 ) Less: Accumulated amortization ( 221,533 ) Intangible assets, net as of December 31, 2024 $ 1,307,343 __________________________________ (1) Includes gaming license fees of $ 135.3 million paid to the Illinois Gaming Board upon commencement of operations at Bally’s Chicago temporary casino. Refer to Note 22 “ Commitments and Contingencies ” for further information. 85 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company’s identifiable intangible assets consist of the following: Weighted average remaining life (in years) December 31, 2024 (in thousands, except years) Gross Carrying Amount Accumulated Amortization Net Amortizable intangible assets: Customer relationships 4.1 $ 660,005 $ ( 272,333 ) $ 387,672 Developed technology 5.1 210,712 ( 70,073 ) 140,639 Internally developed software 3.7 105,284 ( 26,791 ) 78,493 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 Total amortizable intangible assets 1,074,994 ( 414,556 ) 660,438 Intangible assets not subject to amortization: Gaming licenses Indefinite 546,908 — 546,908 Trade names Indefinite 98,784 — 98,784 Other Indefinite 1,213 — 1,213 Total unamortizable intangible assets 646,905 — 646,905 Total intangible assets, net $ 1,721,899 $ ( 414,556 ) $ 1,307,343 Weighted average remaining life (in years) December 31, 2023 (in thousands, except years) Gross amount Accumulated amortization Net Amount 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 Developed technology 4.8 267,927 ( 86,119 ) 181,808 Internally developed software 3.5 61,687 ( 13,091 ) 48,596 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 Total amortizable intangible assets 1,721,302 ( 539,177 ) 1,182,125 Intangible assets not subject to amortization: Gaming licenses Indefinite 586,971 — 586,971 Trade Names Indefinite 100,544 — 100,544 Other Indefinite 1,788 — 1,788 Total unamortizable intangible assets 689,303 — 689,303 Total intangible assets, net $ 2,410,605 $ ( 539,177 ) $ 1,871,428 __________________________________ (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. 86 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. The following table shows the remaining amortization expense associated with finite lived intangible assets as of December 31, 2024: (in thousands) 2025 $ 188,437 2026 186,679 2027 185,713 2028 39,476 2029 19,247 Thereafter 40,886 $ 660,438 12. DERIVATIVE INSTRUMENTS 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. 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. Currency forward agreements involve fixing the USD-EUR exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in USD for their fair value at or close to their settlement date. 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 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 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. 87 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 Interest Rate Contracts - The Company’s objectives in using interest rate derivatives are to hedge its exposure to variability in cash flows on a portion of its floating-rate debt, to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and collars as part of its financial risk and liability management policy. The Company’s interest rate swaps and collars are designated as cash flow hedges under ASC 815. 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. 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, 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 — % — % Interest rate contracts - collars US - SOFR $ — — % — % $ 500,000 4.25 % 3.22 % __________________________________ (1) Weighted average rate. 13. FAIR VALUE MEASUREMENTS Except for the assets and liabilities held for sale and the corresponding impairment described in Note 11, there were no assets and liabilities measured at fair value on a nonrecurring basis. The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement: 88 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 (in thousands) Balance Sheet Location Level 1 Level 2 Level 3 Assets: Cash and cash equivalents Cash and cash equivalents $ 171,233 $ — $ — Restricted cash Restricted cash 60,021 — — 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 — Cross currency swaps Other assets — 13,181 — Total derivative assets at fair value — 19,491 — Total assets $ 231,254 $ 39,909 $ — Liabilities: Contingent consideration Other long-term liabilities $ — $ — $ 59,923 Derivative liabilities not designated as hedging instruments: 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 and other current liabilities — 1,189 — Cross currency swaps Other long-term liabilities — 1,624 — Total derivative liabilities at fair value — 29,214 58,668 Total liabilities $ — $ 29,214 $ 118,591 89 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 (in thousands) Balance Sheet Location Level 1 Level 2 Level 3 Assets: Cash and cash equivalents Cash and cash equivalents $ 163,194 $ — $ — Restricted cash Restricted cash 152,068 — — 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 $ — Liabilities: Contingent consideration Other long-term liabilities $ — $ — $ 58,580 Derivatives not designated as hedging instruments: 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. 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 Balance as of December 31, 2022 $ 36,987 $ 8,220 Additions in the period (acquisition fair value) — 58,580 Reductions in the period — ( 9,292 ) Change in fair value 7,716 1,072 Balance as of December 31, 2023 44,703 58,580 Change in fair value 13,965 1,343 Balance as of December 31, 2024 $ 58,668 $ 59,923 90 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 Derivatives not designated as hedging instruments Sinclair Performance Warrants Other non-operating income (expense), net $ ( 13,965 ) $ ( 7,716 ) $ 32,577 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 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. 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 Sinclair Performance Warrants are accounted for as a derivative instrument classified as a liability within Level 3 of the hierarchy as the warrants are not traded in active markets and are subject to certain assumptions and estimates made by management related to the probability of meeting performance milestones. These assumptions and the probability of meeting performance targets may have a significant impact on the value of the warrant. The Performance Warrants are valued using an option pricing model, considering the Company’s estimated probabilities of achieving the performance milestones for each tranche. 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 “Other long-term liabilities” in the consolidated balance sheets. Contingent consideration Contingent consideration related to acquisitions is recorded at fair value as a liability on the acquisition date and subsequently remeasured at each reporting date, based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. 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” 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 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. 91 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 income (expense), net” in the consolidated statements of operations. Long-term debt 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. In the table below, the carrying amounts of the Company’s long-term debt is net of debt issuance costs and debt discounts. Refer to Note 17 “ Long-Term Debt ” for further information. December 31, 2024 December 31, 2023 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Term Loan Facility $ 1,858,800 $ 1,792,804 $ 1,871,330 $ 1,888,100 5.625% Senior Notes due 2029 738,517 587,813 736,447 596,250 5.875% Senior Notes due 2031 721,456 535,631 719,858 570,544 14. ACCRUED AND OTHER CURRENT LIABILITIES As of December 31, 2024 and 2023, accrued and other current liabilities consisted of the following: December 31, (in thousands) 2024 2023 Gaming liabilities $ 187,233 $ 177,557 Diamond Sports Group non-cash settlement (1) — 144,883 Compensation 66,356 83,112 Interest payable 60,792 66,587 Bally’s Chicago - land development liability — 47,739 Insurance reserve 23,898 20,990 Other 143,013 110,851 Total accrued and other current liabilities $ 481,292 $ 651,719 __________________________________ (1) Refer to Note 15 “Strategic Partnership - Sinclair Broadcast Group” for further information 15. STRATEGIC PARTNERSHIP - SINCLAIR BROADCAST GROUP In 2020, the Company and Sinclair entered into a Framework Agreement (the “Framework Agreement”) providing for a long-term strategic relationship between Sinclair and the Company. 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 paid annual fees to Diamond Sports Group (“Diamond”), a Sinclair subsidiary, for naming rights over Diamond’s regional sports networks (“RSNs”) and other consideration. 92 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. 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. 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 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. 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. Refer to Note 13 “ Fair Value Measurements ” and Note 25 “Subsequent Events” for further information on the Performance Warrants and Options. 16. RESTRUCTURING EXPENSE 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. 93 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) 2024 2023 Severance and employee related benefits (1) 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) 80,117 — Impairment (3) — 5,745 Total restructuring charges $ 98,038 $ 36,759 __________________________________ (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) Balance as of December 31, 2022 $ — Charges 31,014 Payments ( 26,649 ) Effect of foreign exchange 926 Balance as of December 31, 2023 5,291 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. 94 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17. LONG-TERM DEBT As of December 31, 2024 and 2023, long-term debt consisted of the following: December 31, (in thousands) 2024 2023 Term Loan Facility (1) $ 1,886,650 $ 1,906,100 Revolving Credit Facility — 335,000 5.625 % Senior Notes due 2029 750,000 750,000 5.875 % Senior Notes due 2031 735,000 735,000 Less: Unamortized original issue discount ( 19,760 ) ( 23,756 ) Less: Unamortized deferred financing fees ( 33,117 ) ( 39,709 ) Long-term debt, including current portion 3,318,773 3,662,635 Less: Current portion of Term Loan and Revolving Credit Facility ( 19,450 ) ( 19,450 ) Long-term debt, net of discount and deferred financing fees; excluding current portion $ 3,299,323 $ 3,643,185 __________________________________ (1) The Company has a series of interest rate and cross currency swap derivatives to synthetically convert $ 500.0 million notional of the Company’s in USD denominated variable rate Term Loan Facility into fixed rate debt through its maturity in 2028. Refer to Note 12 “ Derivative Instruments ” for further information. 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 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 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. 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. In connection with the repurchase of these 2031 Notes, the Company recorded a gain on extinguishment of debt of $ 4.0 million recorded within “Other non-operating income, net” in the consolidated statements of operations. The indenture contains covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, (1) incur additional indebtedness, (2) pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, (3) enter into certain transactions with affiliates, (4) sell or otherwise dispose of assets, (5) create or incur liens and (6) merge, consolidate or sell all or substantially all of the Company’s assets. These covenants are subject to exceptions and qualifications set forth in the indenture. Secured Notes 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. 95 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Credit Facility On October 1, 2021, the Company and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”) with Deutsche Bank AG New York Branch, as administrative agent and collateral agent, and the other lenders party thereto, providing for senior secured financing of up to $ 2.565 billion, consisting of a senior secured term loan facility in an aggregate principal amount of $ 1.945 billion (the “Term Loan Facility”), which will mature in 2028, and a senior secured revolving credit facility in an aggregate principal amount of $ 620.0 million (the “Revolving Credit Facility”), which will mature in 2026. The credit facilities allow the Company to increase the size of the Term Loan Facility or request one or more incremental term loan facilities or increase commitments under the Revolving Credit Facility or add one or more incremental revolving facilities in an aggregate amount not to exceed the greater of $ 650 million and 100 % of the Company’s consolidated EBITDA for the most recent four-quarter period plus or minus certain amounts as specified in the Credit Agreement, including an unlimited amount subject to compliance with a consolidated total secured net leverage ratio as set out in the Credit Agreement. The credit facilities are guaranteed by the Company’s restricted subsidiaries, subject to certain exceptions, and secured by a first-priority lien on substantially all of the Company’s and each of the guarantors’ assets, subject to certain exceptions. As of June 30, 2023, with the discontinuation of the LIBOR reference rate, borrowings under the credit facilities bear interest at a rate equal to, at the Company’s option, either (1) the term Secured Overnight Financing Rate (“SOFR”), adjusted for certain additional costs and subject to a floor of 0.50 % in the case of term loans and 0.00 % in the case of revolving loans or (2) a base rate determined by reference to the greatest of (a) the federal funds rate plus 0.50 %, (b) the prime rate, (c) the one-month SOFR rate plus 1.00 %, (d) solely in the case of term loans, 1.50 % and (e) solely in the case of revolving loans, 1.00 %, in each case of clauses (1) and (2), plus an applicable margin. In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Credit Facility a 0.50 % or 0.375 % commitment fee in respect of commitments under the Revolving Credit Facility, with the applicable commitment fee determined based on the Company’s total net leverage ratio. The credit facilities contain covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, incur additional indebtedness, pay dividends or make certain other restricted payments, sell assets, make certain investments and grant liens. These covenants are subject to exceptions and qualifications set forth in the Credit Agreement. The Revolving Credit Facility contains a financial covenant regarding a maximum first lien net leverage ratio that applies when borrowings under the Revolving Credit Facility exceed 30 % of the total revolving commitment. As of December 31, 2024, the Company was in compliance with all such covenants. In an effort to mitigate the interest rate risk associated with the Company’s variable rate credit facilities, the Company entered into a series of interest rate and cross currency swap derivative transactions during the second half of 2023. Refer to Note 12 “ Derivative Instruments ” for further information. Debt Maturities As of December 31, 2024, the contractual annual principal maturities of long-term debt, including the Revolving Credit Facility, are as follows: (in thousands) 2025 $ 19,450 2026 19,450 2027 19,450 2028 1,828,300 2029 750,000 Thereafter 735,000 $ 3,371,650 96 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 18. LEASES Operating Leases The Company is committed under various operating lease agreements for real estate and property used in operations. Certain leases include various renewal options which are included in the lease term when the Company has determined it is reasonably certain of exercising the options. Certain of these leases include percentage rent payments based on property revenues and/or rent escalation provisions determined by increases in the CPI. These percentage rent and escalation provisions are treated as variable lease payments and recognized as lease expense in the period in which the obligation for those payments are incurred. 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 $ 1.62 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. GLPI Leases 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 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 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. 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. 97 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 Variable lease cost 12,121 10,360 8,386 Operating lease expense 169,950 158,735 84,061 Short-term lease expense 22,871 13,249 17,536 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: Year Ended December 31, ($ in thousands) 2024 2023 2022 Cash paid for amounts included in the lease liability - operating cash flows from operating leases $ 145,891 $ 132,871 $ 68,689 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 Weighted average discount rate 8.5 % 7.5 % As of December 31, 2024, future minimum lease payments under noncancelable operating leases are as follows: (in thousands) 2025 $ 199,690 2026 200,068 2027 194,964 2028 197,307 2029 197,857 Thereafter 3,868,745 Total lease payments 4,858,631 Less: present value discount ( 3,238,325 ) Lease obligations $ 1,620,306 Financing Obligation Bally’s Chicago Operating Company, LLC., an indirect wholly-owned subsidiary of the Company, entered into a ground lease for the land on which Bally’s Chicago will be built, which 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. The lease commenced November 18, 2022 and has a 99-year term followed by ten separate 20-year renewals at the Company’s option. 98 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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. Lessor The Company leases its hotel rooms to patrons and records the corresponding lessor revenue in “ Non-gaming revenue ” within our consolidated statements of operations. For the years ended December 31, 2024, 2023, and 2022, the Company recognized $ 148.7 million, $ 200.7 million and $ 153.8 million of lessor revenues related to the rental of hotel rooms, respectively. Hotel leasing arrangements vary in duration, but are short-term in nature. 19. EQUITY PLANS Equity Incentive Plans 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 The Company recognized total share-based compensation expense of $ 14.8 million, $ 24.1 million and $ 27.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. The total income tax benefit for share-based compensation arrangements was $ 3.9 million, $ 6.2 million, and $ 7.1 million, for the years ended December 31, 2024, 2023 and 2022, respectively. 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. 99 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Restricted Stock Units and Performance-Based Restricted Stock Units Under the 2021 Incentive Plan, RSUs and PSUs have been awarded to eligible employees, members of the Company’s senior management and certain members of its Board of Directors. Each RSU and PSU represents the right to receive one share of the Company’s common stock. RSUs generally vest in one-third increments over a three year period and compensation cost is recognized over the respective service periods based on the grant date fair value. PSUs generally vest over a three year period depending on the individual award agreement and become eligible for vesting upon attainment of performance objectives for the performance period. The number of PSUs that may become eligible for vesting varies and is dependent upon whether the performance targets are met, partially met or exceeded each year. The fair value of RSUs and PSUs is based on the Company’s common stock price as of the grant date. The following summary presents information of equity-classified RSU and PSU activity for the year ended December 31, 2024: Restricted Stock Units Performance Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2023 1,176,611 347,817 $ 20.83 Granted 420,366 502,125 12.12 Vested ( 526,907 ) ( 370,713 ) 21.18 Forfeited ( 88,730 ) ( 153,074 ) 13.17 Outstanding at December 31, 2024 981,340 326,155 $ 15.85 The weighted average grant date fair value for RSUs and PSUs was $ 12.12 , $ 18.58 and $ 30.13 in 2024, 2023, and 2022, respectively. The total intrinsic value of RSUs vested was $ 6.9 million, $ 8.5 million and $ 15.3 million, for the years ended December 31, 2024, 2023, and 2022, respectively. For PSU awards, performance objectives for each year are established no later than 90 days following the start of the year. As the performance targets have not yet been established for the PSUs that are eligible to be earned in 2025 or later, a grant date has not yet been established for those awards in accordance with ASC 718. The grant date for the 2024, 2023, and 2022 performance periods have been established and, based upon achievement of the performance criteria for the years ended December 31, 2024, 2023, and 2022, 326,155 , 348,835 and 62,133 PSUs, respectively, became eligible for vesting. 20. STOCKHOLDERS’ EQUITY Capital Return Program The Company has a Board of Directors approved capital return program under which the Company may expend a total of up to $ 700 million for share repurchases and payment of dividends. Future share repurchases may be effected in various ways, which could include open-market or private repurchase transactions, accelerated stock repurchase programs, tender offers or other transactions. The amount, timing and terms of any return of capital transaction will be determined based on prevailing market conditions and other factors. There is no fixed time period to complete share repurchases. 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: Year Ended December 31, (in thousands, except share and per share data) 2023 2022 (1) Number of common shares repurchased 7,581,428 6,621,841 Total cost $ 99,081 $ 153,366 Average cost per share, including commissions $ 13.07 $ 23.16 __________________________________ (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. 100 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. The Company retired 7,581,428 and 7,394,642 shares of its common stock held in treasury during the years ended December 31, 2023 and 2022, respectively. The shares were returned to the status of authorized but unissued shares. As of December 31, 2024, there were no shares remaining in treasury. There were no cash dividends paid during the years ended December 31, 2024, 2023, and 2022. Preferred Stock The Company has authorized the issuance of up to 10 million shares of $ 0.01 par value preferred stock. As of December 31, 2024 and 2023, no shares of preferred stock have been issued. Shares Outstanding As of December 31, 2024, the Company had 40,787,007 common shares issued and outstanding. The Company issued warrants, options and other contingent consideration in acquisitions and strategic partnerships that are expected to result in the issuance of common shares in future periods resulting from the exercise of warrants and options or the achievement of certain performance targets. These incremental shares are summarized below: Sinclair Penny Warrants (1) (Note 15) 7,911,724 Sinclair Performance Warrants (2) (Note 15) 3,279,337 Sinclair Options (1) (Note 15) 1,639,669 MKF Penny warrants (Note 13) 44,128 Outstanding awards under Equity Incentive Plans (Note 19) 1,307,495 14,182,353 __________________________________ (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 101 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 (1) Benefit Plans Cash Flow Hedges (2) Net Investment Hedges (3) Total Accumulated other comprehensive loss at December 31, 2021 $ ( 25,833 ) $ ( 976 ) $ — $ — $ ( 26,809 ) Other comprehensive income (loss) before reclassifications ( 270,151 ) 1,911 — — ( 268,240 ) Reclassifications from accumulated other comprehensive income (loss) to earnings — — — — — Tax effect — ( 591 ) — — ( 591 ) Accumulated other comprehensive loss at December 31, 2022 ( 295,984 ) 344 — — ( 295,640 ) 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 Accumulated other comprehensive income (loss) at December 31, 2023 ( 177,203 ) 886 ( 11,246 ) ( 21,995 ) ( 209,558 ) Other comprehensive income (loss) before reclassifications ( 79,853 ) 1,172 16,003 24,843 ( 37,835 ) Reclassifications from accumulated other comprehensive income (loss) to earnings ( 4,689 ) — ( 11,031 ) 5,420 ( 10,300 ) Tax effect — ( 312 ) ( 1,915 ) ( 347 ) ( 2,574 ) Accumulated other comprehensive income (loss) at December 31, 2024 $ ( 261,745 ) $ 1,746 $ ( 8,189 ) $ 7,921 $ ( 260,267 ) __________________________________ (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. (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). 102 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 21. INCOME TAXES The components of income (loss) before taxes are as follows: Years Ended December 31, (in thousands) 2024 2023 2022 Domestic $ ( 456,728 ) $ ( 244,412 ) $ ( 444,549 ) Foreign ( 95,774 ) 58,674 ( 9,920 ) Total $ ( 552,502 ) $ ( 185,738 ) $ ( 454,469 ) The components of the provision (benefit) for income taxes are as follows: Years Ended December 31, (in thousands) 2024 2023 2022 Current taxes Federal $ ( 3,219 ) $ ( 4,419 ) $ 9,318 State 1,390 3,673 8,289 Foreign ( 6,866 ) 26,431 41,599 ( 8,695 ) 25,685 59,206 Deferred taxes Federal ( 18,326 ) 11,302 ( 32,304 ) State ( 10,789 ) 720 ( 9,429 ) Foreign 53,062 ( 35,945 ) ( 46,396 ) 23,947 ( 23,923 ) ( 88,129 ) Provision (benefit) for income taxes $ 15,252 $ 1,762 $ ( 28,923 ) The effective rate varies from the statutory US federal tax rate as follows: Years Ended December 31, (in thousands) 2024 2023 2022 Income tax (benefit) expense at statutory federal rate $ ( 116,025 ) $ ( 39,009 ) $ ( 95,439 ) State income taxes, net of federal effect ( 30,390 ) ( 14,716 ) ( 10,096 ) Foreign tax rate adjustment 64,884 ( 50,082 ) ( 17,455 ) Nondeductible professional fees 3,117 430 1,370 Other permanent differences including lobbying expense ( 8,906 ) 1,066 2,414 Share-based compensation 992 2,577 3,348 Gain on bargain purchases — — 22 CARES Act ( 3,153 ) — — Return to provision adjustments 6,455 ( 8,810 ) ( 2,275 ) Global intangible low-tax income (“GILTI”) 17,941 14,333 2,404 Goodwill — — 28,935 Change in uncertain tax positions 681 1,103 ( 2,224 ) Change in valuation allowance 79,656 94,870 60,073 Total provision (benefit) for income taxes $ 15,252 $ 1,762 $ ( 28,923 ) Effective income tax rate on continuing operations ( 2.8 ) % ( 0.9 ) % 6.4 % 103 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. Significant components of the Company’s deferred income taxes at December 31, 2024 and 2023 are as follows: Years Ended December 31, (in thousands) 2024 2023 Deferred tax assets: Interest 283,757 195,628 Net operating loss carryforwards 44,510 28,468 Property and equipment 26,911 — Accrued and other current liabilities 21,681 44,707 Framework Agreement liabilities 20,344 31,376 Share-based compensation 5,876 7,818 Goodwill — — Valuation allowance ( 234,599 ) ( 154,943 ) Total deferred tax assets, net 168,480 153,054 Deferred tax liabilities: Land ( 4,167 ) ( 4,142 ) Property and equipment — ( 46,472 ) Change in accounting method ( 281 ) ( 280 ) RI Joint Venture and GLPI Partnership ( 175,614 ) ( 108,598 ) Amortizable assets ( 104,323 ) ( 83,118 ) Total deferred tax liabilities ( 284,385 ) ( 242,610 ) Net deferred tax liabilities $ ( 115,905 ) $ ( 89,556 ) The Company will only recognize a deferred tax asset when, based on available evidence, realization is more likely than not. The Company has assessed its deferred tax liabilities arising from taxable temporary differences and has concluded such liabilities are not a sufficient source of income for the realization of deferred tax assets, including indefinite life taxable temporary differences which offset, subject to limitation, deferred tax assets with unlimited carryovers, such as the Section 163(j) interest limitation. 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, 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. 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. 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. There was $ 25.4 million of federal net operating carryforwards subject to a section 382 limitation with an unlimited carryforward period as of December 31, 2023. 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. 104 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. Section 382 can also apply when we acquire subsidiaries with net operating loss carryforwards, as there may be limitations on the use of acquired net operating losses against our taxable income. As of December 31, 2024, the Company expects to utilize all acquired tax attributes prior to expiration. 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: a. refund of federal income taxes due to five-year carryback of net operating loss incurred in 2020 when our 2020 tax return was filed in 2021; b. relaxation of interest expense deduction limitation for income tax purposes; and c. 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. 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. The Company intends to continue to review and consider any available potential benefits under the CARES Act for which it qualifies, including those described above. The Company cannot predict the manner in which such benefits or any of the other benefits described herein will be allocated or administered and the Company cannot provide assurances that it will be able to access such benefits in a timely manner or at all. 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. 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. While the Company believes that the tax returns filed and tax positions taken are supportable and accurate, some tax authorities may not agree with the positions taken. This can give rise to tax uncertainties which, upon audit, may not be resolved in the Company’s favor. As of December 31, 2024, there was $ 24.8 million tax contingency accruals and deferred tax asset reductions for uncertain tax positions, of which $ 22.1 million would impact the effective tax rate, if recognized. A reconciliation of the beginning and ending balances of the gross liability for uncertain tax positions is as follows: (in thousands) 2024 2023 2022 Uncertain tax position liability at the beginning of the year $ 29,286 $ 11,277 $ 5,131 Increases related to tax positions taken during the year ( 4,462 ) 18,009 — Increases related to tax positions taken during prior period — — 11,277 Decreases related to tax positions taken during prior periods — — ( 5,131 ) Uncertain tax position liability at the end of the year $ 24,824 $ 29,286 $ 11,277 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. The Company records interest and penalties related to uncertain tax positions as a component of the income tax provision (benefit). The Company has reserved interest and penalties on uncertain tax positions of $ 1.0 million and $ 0.7 million as of December 31, 2024 and 2023, respectively. The Company has recorded $ 0.3 million and $ 0.6 million of interest on uncertain tax positions on the consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively. The Company and its subsidiaries file tax returns in several jurisdictions including the US and various US state and foreign jurisdictions. The Company remains subject to examination for US federal income tax purposes for the years ended December 31, 2015 through 2024, as a result of a 2020 net operating loss carryback claim. The Company remains subject to examination for state and foreign income tax purposes for the years ended December 31, 2013 through 2024. The Company is currently appealing an audit by the State of Colorado for tax years ended December 31, 2012 through 2015. Based on the current status of the Colorado appeal, the Company believes no additional reserves are necessary. In addition, the disallowance of a loss carryforward generated in a period outside of the normal statute of limitations is generally open until the statute of limitations expires in the year of the utilization of the loss. 105 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 22. COMMITMENTS AND CONTINGENCIES Litigation The Company is a party to other various legal and administrative proceedings which have arisen in the ordinary course of its business. Estimated losses are accrued for these proceedings when the loss is probable and can be estimated. The current liability for the estimated losses associated with these proceedings is not material to the Company’s consolidated financial condition and those estimated losses are not expected to have a material impact on results of operations. Although the Company maintains what it believes is adequate insurance coverage to mitigate the risk of loss pertaining to covered matters, legal and administrative proceedings can be costly, time-consuming and unpredictable. Although no assurance can be given, the Company does not believe that the final outcome of these matters, including costs to defend itself in such matters, will have a material adverse effect on the company’s consolidated financial statements. 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. Capital Expenditure Commitments Bally’s Twin River - Pursuant to the terms of the Regulatory Agreement in Rhode Island, the Company is committed to invest $ 100 million in its Rhode Island properties over the term of the master contract through June 30, 2043, including an expansion and the addition of new amenities at Bally’s Twin River. As of December 31, 2024, approximately $ 45.1 million of the commitment remains. Bally’s Chicago - Pursuant to the Host Community Agreement with the City of Chicago, the Company’s indirect subsidiary is required to spend at least $ 1.34 billion on the design, construction and outfitting of the temporary casino and the permanent resort and casino. The actual cost of the development may exceed this minimum capital investment requirement. In addition, land acquisition costs and financing costs, among other types of costs, are not counted toward meeting this requirement. As of December 31, 2024, approximately $ 1.02 billion of this commitment remains. City of Chicago Guaranty In connection with the Host Community Agreement, entered into by Bally’s Chicago Operating Company, LLC (the “Developer”), a wholly-owned indirect subsidiary of the Company, the Company provided the City of Chicago with a performance guaranty whereby the Company agreed to have and maintain available financial resources in an amount reasonably sufficient to allow the Developer to complete its obligations under the Host Community Agreement. In addition, upon notice from the City of Chicago that the Developer has failed to perform various obligations under the Host Community Agreement, the Company has agreed to indemnify the City of Chicago against any and all liability, claim or reasonable and documented expense the City of Chicago may suffer or incur by reason of any nonperformance of any of the Developer’s obligations. Bally’s Chicago Casino Fees Under the Illinois Gambling Act, the Company will be responsible to pay the Illinois Gaming Board a reconciliation fee payment three years after the date operations commenced (in a temporary or permanent facility) in an amount equal to 75% of the adjusted gross receipt (“AGR”) for the most lucrative 12-month period of operations, minus the amount equal to the initial payment per gaming position paid. Sponsorship Commitments As of December 31, 2024, the Company has entered into multiple sponsorship agreements with various professional sports leagues and teams. These agreements commit a total of $ 125.4 million through 2036 and grant the Company rights to use official league marks for branding and promotions, among other benefits. Interactive Technology Commitments The Company has certain multi-year agreements with its various market access and content providers, as well as its online sports betting platform partners, that require the Company to pay variable fees based on revenue, with minimum annual guarantees. As of December 31, 2024, the cumulative minimum obligation committed in these agreements is $ 52.4 million through 2029. 106 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Collective Bargaining Agreements As of December 31, 2024, the Company had approximately 10,000 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. There can be no assurance that we will be able to extend or enter into replacement agreements. If the Company is able to extend or enter into replacement agreements, there can be no assurance as to whether the terms will be on comparable terms to the existing agreements. 23. SEGMENT REPORTING The Company has three operating and reportable segments: Casinos & Resorts, International Interactive and North America Interactive. 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 - 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. Revenue generated from the UK and Japan represented approximately 28 % and 6 %, 25 % and 11 %, and 25 % and 12 % of total revenue, respectively, during the year ended December 31, 2024, 2023 and 2022, respectively. The Company does not have any revenues from any individual customers that exceed 10% of total reported revenues. 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. The Other category is included in the following tables in order to reconcile the segment information to the Company’s consolidated financial statements. 107 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, (in thousands) 2024 2023 2022 Revenue Casinos & Resorts $ 1,363,113 $ 1,363,291 $ 1,227,563 International Interactive 909,493 973,210 946,442 North America Interactive 177,872 112,572 81,700 Total $ 2,450,478 $ 2,449,073 $ 2,255,705 Adjusted EBITDAR (1) Casinos & Resorts $ 370,518 $ 428,968 $ 398,930 International Interactive 336,460 343,559 321,651 North America Interactive ( 40,236 ) ( 55,653 ) ( 65,729 ) Corporate & Other ( 52,212 ) ( 63,770 ) ( 53,024 ) Total 614,530 653,104 601,828 Operating (expense) income: Rent expense associated with triple net operating leases (2) ( 118,919 ) ( 125,775 ) ( 53,313 ) Depreciation and amortization ( 379,544 ) ( 350,408 ) ( 300,559 ) Transaction costs ( 41,060 ) ( 80,376 ) ( 85,604 ) Restructuring ( 17,921 ) ( 31,014 ) — Tropicana Las Vegas demolition and closure costs ( 59,838 ) — — Share-based compensation ( 14,752 ) ( 24,074 ) ( 27,912 ) Gain on sale-leaseback, net 86,254 374,321 50,766 Impairment charges ( 248,879 ) ( 149,825 ) ( 463,978 ) 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 ) (Loss) income from operations ( 258,328 ) 104,009 ( 293,008 ) Other income (expense) Interest expense, net ( 289,629 ) ( 277,561 ) ( 208,153 ) Other ( 4,545 ) ( 12,186 ) 46,692 Total other expense, net ( 294,174 ) ( 289,747 ) ( 161,461 ) Loss before income taxes ( 552,502 ) ( 185,738 ) ( 454,469 ) (Provision) benefit for income taxes ( 15,252 ) ( 1,762 ) 28,923 Net loss $ ( 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. (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. 108 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 2024 Revenue $ 1,363,113 $ 909,493 $ 177,872 Less: 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 ) 2023 Revenue $ 1,363,291 $ 973,210 $ 112,572 Less: 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 ) 2022 Revenue $ 1,227,563 $ 946,442 $ 81,700 Less: 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 ) __________________________________ (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. 109 BALLY’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, (in thousands) 2024 2023 2022 Capital Expenditures Casinos & Resorts $ 60,373 $ 143,526 $ 183,693 International Interactive 706 2,462 12,392 North America Interactive 2,147 1,986 6,635 Corporate & Other (1) 136,601 163,509 9,536 Total $ 199,827 $ 311,483 $ 212,256 __________________________________ (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, 2024, over 97 % of the Company’s long-lived assets, consisting primarily of property and equipment, are located within the United States. 24. LOSS PER SHARE Diluted earnings per share includes the determinants of basic earnings per share and, in addition, reflects the dilutive effect of the common stock deliverable for stock options, using the treasury stock method, and for RSUs, RSAs and PSUs for which future service is required as a condition to the delivery of the underlying common stock. Years Ended December 31, 2024 2023 2022 Net loss applicable to common stockholders $ ( 567,754 ) $ ( 187,500 ) $ ( 425,546 ) Weighted average common shares outstanding, basic 48,468,887 53,350,817 58,111,699 Weighted average effect of dilutive securities — — — Weighted average common shares outstanding, diluted 48,468,887 53,350,817 58,111,699 Per share data Basic $ ( 11.71 ) $ ( 3.51 ) $ ( 7.32 ) Diluted $ ( 11.71 ) $ ( 3.51 ) $ ( 7.32 ) Anti-dilutive shares excluded from the calculation of diluted earnings per share 5,377,457 5,021,833 5,188,388 On November 18, 2020, the Company issued Penny Warrants, Performance Warrants and Options which participate in dividends with the Company’s common stock subject to certain contingencies. In the period in which the contingencies are met, those instruments are participating securities to which income will be allocated using the two-class method. The Performance Warrants and Options do not participate in net losses. The Penny Warrants were considered exercisable for little to no consideration and are therefore included in basic shares outstanding at their issuance date. For the years ended December 31, 2024, 2023 and 2022, the shares underlying the Performance Warrants were anti-dilutive as certain contingencies were not met. Refer to Note 15 “ Strategic Partnership - Sinclair Broadcast Group ” for further information. 25. SUBSEQUENT EVENTS Merger 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. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.