What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-12 compared with 2024-11-08 · 148 added, 189 removed, 245 unchanged (58% of the section changed)

9 unchanged sentences

Important factors beyond those that apply to most businesses, some of which are beyond our control, that could cause actual results to differ materially from our expectations and assumptions include:

• risks related to the Mergers, including:

◦ the timing, receipt and terms and conditions of any required governmental or regulatory approvals of the Mergers;

◦ the ability of the parties to satisfy the conditions precedent and consummate the proposed Mergers;

◦ the timing of the consummation of the proposed Mergers;

◦ the ability of the parties to secure any required stockholder approval in a timely manner or on the terms desired or anticipated;

◦ failure of the parties to obtain the financing required to consummate the company merger;

◦ the ability to achieve anticipated benefits and savings expected from the proposed Mergers;

◦ risks related to the potential disruption of management’s attention from our ongoing business operations due to the pending Mergers;

◦ the outcome of any legal proceedings related to the proposed Mergers.

• unexpected costs and other events impacting our planned construction projects, including Bally’s Chicago;

• unexpected costs, difficulties integrating and other events impacting our completed acquisitions and our ability to realize anticipated benefits;

• risks associated with our rapid growth, including those affecting customer and employee retention, integration and controls;

• risks associated with the impact of the digitalization of gaming on our casino operations, our expansion into sports betting and iGaming and the highly competitive and rapidly changing aspects of our businesses generally;

• risks associated with the impact of the digitalization of gaming on our casino operations, our expansion into online gaming (“iGaming”) and sports betting and the highly competitive and rapidly changing aspects of our interactive businesses generally;

• the very substantial regulatory restrictions applicable to us, including costs of compliance;

• restrictions and limitations in agreements to which we are subject, including our debt;

• our asset impairment analyses and our intangible asset and goodwill impairment tests;

• global economic challenges, including the impact of public health crises, global and regional conflicts, rising inflation, rising interest rates and supply-chain disruptions, could cause economic uncertainty and volatility and impact discretionary consumer spending;

• restrictions and limitations in agreements to which we are subject, including our debt, could significantly affect our ability to operate our business and our liquidity;

• other risks identified in Part I.

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You should not place undue reliance on our forward-looking statements.

We are a global gaming, hospitality and entertainment company with a portfolio of casinos and resorts and online gaming businesses.

We are a global gaming, hospitality and entertainment company with a portfolio of casinos and resorts and a growing omni-channel presence.

We provide our customers with physical and interactive entertainment and gaming experiences, including traditional casino offerings, iGaming, online bingo, sportsbook and free-to-play (“F2P”) games.

As of September 30, 2024, we own and manage 15 land-based casinos in 10 states across the United States (“US”), one golf course in New York, and one horse racetrack in Colorado operating under the Bally’s brand.

Our land-based casino operations include approximately 14,900 slot machines, 550 table games and 3,800 hotel rooms, along with various restaurants, entertainment venues and other amenities.

In 2021, we acquired London-based Gamesys Group Ltd.

(“Gamesys”) to expand our geographical and product footprints to include an iGaming business with well-known brands providing iCasino and online bingo experiences to our global online customer base with concentrations in Europe and Asia and a growing presence in North America.

As of March 31, 2025, we own and manage 19 casinos in 11 states across the United States (“US”), one golf course in New York, one horse racetrack in Colorado, and Aspers Casino in the United Kingdom (“UK”) (“Bally's Newcastle”).

In February 2025, we merged with The Queen Casino & Entertainment Inc.

(“Queen”) adding four additional casinos to our portfolio.

We also own Bally Bet Sportsbook & Casino, a first-in-class sports betting and iCasino platform, Bally’s Interactive International division, a leading global interactive gaming operator concentrated in Europe, and a significant stake in Intralot S.A.

(“Intralot”), a global lottery management and services business.

Our revenues are primarily generated by these gaming and entertainment offerings.

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Agreement and Plan of Merger

On July 25, 2024, we entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with SG Parent, LLC, The Queen Casino & Entertainment, Inc.

(“Queen”), Epsilon Sub I, Inc.

(“Merger Sub I”), Epsilon Sub II, Inc.

(“Merger Sub II”)and, solely for purposes of specified sections thereof, SG CQ Gaming LLC (“SG Gaming”).

Subject to the terms and conditions set forth in the Merger Agreement, in connection with the closing of the transaction, SG Gaming will contribute to the Company all shares of common stock of Queen that it owns in exchange for shares of common stock of the Company, immediately thereafter, Merger Sub I will merge into the Company with the Company surviving such merger and immediately thereafter, Merger Sub II will merge into Queen with Queen surviving such merger as a direct, wholly owned subsidiary of the Company.

On February 7, 2025, the Company completed the previously announced transactions under the 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”).

Refer to Note 1 “General Information” in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the Merger Agreement and the mergers.

Carved-Out Business

On October 31, 2024, the Company entered into an agreement to carve-out components of its 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 the management of the Carved-Out Business.

The Buyer is acquiring the net-assets, predominantly working capital, of the Carved-Out Business, in exchange for a seven-year term note in the principal amount of €30 million, subject to applicable interest.

Certain intellectual property used in the Carved-Out Business has been placed in trust, with royalty licensing fees paid to the trust by the Buyer for a term of five years (subject to extension).

All royalty licensing fees, net of trustee administrative expenses, are paid to the Company by the trust and are expected to be reported by the Company as licensing revenues.

The Company will also provide the Carved-Out Business with certain transition services.

In connection with the separation transaction, the Company will acquire penny warrants that represent a 19.9% fully-diluted interest in the Buyer, which is expected to result in the deconsolidation of the Carved-Out Business.

Bally’s will have no role in the management or operational governance of the Carved-Out Business.

The separation transaction is intended to allow Bally’s to focus its capital and resource allocation on North American and European business, and the Carved-Out Business will benefit from focused management attention and aligned ownership.

Post transaction, the financial statements of the Company will only reflect licensing and royalty revenues received from a trust that it licenses to the Buyer, which are expected to be lower than revenues recorded under the current accounting treatment.

However, the licensing and royalty revenues received from the Buyer are expected to be at higher profitability margins, leading to a modest decrease in Income from operations on an annualized basis after giving effect to the transaction.

The gain or loss on sale of the net-assets of the Carved-Out Business has not yet been determined as it is subject to valuation procedures and associated goodwill allocation, the release of accumulated currency translation adjustments for the disposed entities, and other post-closing adjustments.

The goodwill allocation, as well as the completion of a re-assessment of the Company’s goodwill reporting units and long-lived asset groups upon completion of the separation transaction, could result in material impairment charges.

Long-lived assets, predominantly intellectual property (including those to be held in trust), subject to the cash flows of the Carved-Out Business are $332.0 million as of September 30, 2024.

Operating Structure

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Bally’s Golf Links at Ferry Point (“Bally’s Golf Links”) Bronx, New York

The Queen Baton Rouge Baton Rouge, Louisiana

The Belle of Baton Rouge Baton Rouge, Louisiana

Casino Queen Marquette Marquette, Iowa

DraftKings at Casino Queen East St.

Louis, Illinois

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Site of future permanent casino resort is leased from GLPI.

International Interactive - includes Gamesys, primarily a business-to-consumer (“B2C”) iCasino operator.

North America Interactive - includes the following North America businesses:

• Bally’s Interactive, primarily a B2C online iGaming and online sportsbook operator;

• Consumer facing service and marketing engines, including SportCaller, a business-to-business (“B2B”) and F2P game provider for sports betting companies;

Live at the Bike, an online subscription streaming service featuring livestream and on-demand poker videos and podcasts;

an investment in the Association of Volleyball Professionals (“AVP”), a professional beach volleyball organization and host of the longest-running domestic beach volleyball tour;

and an investment in Watch Stadium, a content distribution channel focused on sporting events.

The North America Interactive reportable segment also includes the North American operations of Gamesys.

International Interactive - includes Gamesys’ European operations and global licensing business, one casino property, Bally’s Newcastle, in the UK, as well as certain other international consumer facing platforms.

North America Interactive - includes Bally’s Interactive, primarily a B2C online iGaming and online sportsbook operator;

and certain other consumer facing service and marketing engines.

Refer to Note 19 “Segment Reporting” to our condensed consolidated financial statements for additional information on our segment reporting structure.

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Among other things, the Regulatory Agreement prohibits us and our subsidiaries from owning, operating, managing or providing gaming specific goods and services to any properties in Rhode Island (other than Bally’s Twin River and Bally’s Tiverton), Massachusetts, Connecticut or New Hampshire.

A failure to comply with the Regulatory Agreement could subject us to injunctive or monetary relief, payments to the Rhode Island regulatory agencies and ultimately the revocation or suspension of our licenses to operate in Rhode Island.

In addition, our master contracts with Rhode Island extended through June 30, 2043, and allow for consolidation of promotional points between Bally’s Twin River and Bally’s Tiverton, obligate Bally’s Twin River to build a 50,000 square foot expansion, obligate Bally’s to lease at least 20,000 square feet of commercial space in Providence, and commit us to invest $100 million in Rhode Island over the term, including an expansion and the addition of new amenities at Bally’s Twin River.

A failure to comply with the Regulatory Agreement could subject us to injunctive and monetary relief, and ultimately the revocation or suspension of our licenses to operate in Rhode Island.

The DoL also has regulatory authority over Bally’s under our VLT master contracts with the DoL.

Our master contracts with Rhode Island extended through June 30, 2043, and allow for consolidation of promotional points between Bally’s Twin River and Bally’s Tiverton, obligate Bally’s Twin River to build a 50,000 square foot expansion, obligate Bally’s to lease at least 20,000 square feet of commercial space in Providence, and commit us to invest $100 million in Rhode Island over the term, including an expansion and the addition of new amenities at Bally’s Twin River.

As a licensed Technology Provider since July 1, 2021, Bally’s Twin River is entitled to an additional share of net terminal income on Video Lottery Terminals (“VLTs”) which they owned or leased.

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Consolidated Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income, because it excludes the rent expense associated with our triple net operating leases with GLPI and the lease for real estate and land underlying the operations of the Bally’s Lake Tahoe property.

Third Quarter 2024 and First Nine Months 2024 Results

First Quarter 2025 Results

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

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2024 2023 2024 2023

Successor Predecessor

(in millions) Period from February 8, 2025 to March 31, 2025 Period from January 1, 2025 to February 7, 2025 Three Months Ended March 31, 2024

Total revenue $ 368.7 $ 220.5 $ 618.5

(Loss) income from operations (157.7) 37.2 (226.0) 420.0

Net (loss) income (247.9) (61.8) (482.0) 90.9

Loss from operations (1.8) (20.8) (74.0)

Net income (loss) 34.5 (51.0) (173.9)

The following table presents, for the periods indicated, certain income and expense items expressed as a percentage of total revenue:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Successor Predecessor

Period from February 8, 2025 to March 31, 2025 Period from January 1, 2025 to February 7, 2025 Three Months Ended March 31, 2024

Total revenue 100.0 % 100.0 % 100.0 %

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General and administrative 43.5 % 51.9 % 40.2 %

Loss (gain) on sale-leaseback, net 23.8 % — % 8.0 % (20.4) %

Depreciation and amortization 12.9 % 10.1 % 25.8 %

Total operating costs and expenses 100.5 % 109.4 % 112.0 %

(Loss) income from operations (25.0) % 5.9 % (12.1) % 22.9 %

Loss from operations (0.5) % (9.4) % (12.0) %

Other (expense) income:

Interest expense, net (14.0) % (12.3) % (11.8) %

Other non-operating (expense) income, net (7.9) % 2.5 % (2.1) % 1.4 %

Other non-operating income (expense), net (2.4) % (1.1) % 0.7 %

Total other expense, net (16.5) % (13.4) % (11.1) %

(Loss) income before income taxes (44.7) % (2.8) % (26.0) % 13.3 %

Loss before income taxes (17.0) % (22.8) % (23.0) %

(Benefit) provision for income taxes (26.3) % 0.3 % 5.1 %

Net (loss) income (39.3) % (9.8) % (25.8) % 4.9 %

Net income (loss) 9.4 % (23.1) % (28.1) %

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Segment Performance

The following table sets forth certain financial information associated with results of operations for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, except percentages) 2024 2023 $ Change 2024 2023 $ Change

During the first quarter of 2025, the Company moved a component of the North America Interactive operating segment to a separate operating segment, which is reported in the Corporate & Other category, to better align with the Company’s strategic growth initiatives and how its chief operating decision maker evaluates performance and allocates resources.

Comparable prior period segment results have been re-cast to reflect this change.

The prior year results presented below were reclassified to conform to the new segment presentation.

The following table sets forth certain financial information associated with results of operations for the Successor period from February 8, 2025 to March 31, 2025, the Predecessor period from January 1, 2025 to February 7, 2025 and the three months ended March 31, 2024 (Predecessor):

Successor Predecessor

(in thousands, except percentages) Period from February 8, 2025 to March 31, 2025 Period from January 1, 2025 to February 7, 2025 Three Months Ended March 31, 2024

Casinos & Resorts $ 178,534 $ 95,984 $ 250,418

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North America Interactive 48 2,007 5,195

Corporate & Other 1,536 273 1,903

Total Non-gaming revenue 54,915 34,731 102,425

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North America Interactive 24,571 17,022 35,130

Corporate & Other — — —

Total Gaming expenses 133,523 87,994 236,144

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North America Interactive 2,565 68 540

Corporate & Other 564 202 334

Total Non-gaming expenses 29,109 16,526 48,111

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North America Interactive 3,029 5,512 12,140

Other 45,107 39,908 5,199 96,378 116,679 (20,301)

Corporate & Other 45,234 28,568 (13,174)

Total General and administrative $ 160,391 $ 114,401 $ 248,436

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General and administrative as a percentage of Total revenue 44 % 52 % 40 %

Three and Nine Months Ended September 30, 2024 Compared to Three and Nine Months Ended September 30, 2023

The Successor Period from February 8, 2025 to March 31, 2025 and the Predecessor Period from January 1, 2025 to February 7, 2025 Compared to the Three Months Ended March 31, 2024 (Predecessor)

Total Revenue

Total revenue for the three and nine months ended September 30, 2024 and 2023 consisted of the following (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 $ Change % Change 2024 2023 $ Change % Change

The following table sets forth certain financial information associated with revenue for the Successor period from February 8, 2025 to March 31, 2025, the Predecessor period from January 1, 2025 to February 7, 2025 and the three months ended March 31, 2024 (Predecessor) (in thousands):

Successor Predecessor

Period from February 8, 2025 to March 31, 2025 Period from January 1, 2025 to February 7, 2025 Three Months Ended March 31, 2024

Gaming $ 313,779 $ 185,767 $ 516,057

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Food and beverage 20,254 11,304 34,952

Licensing 4,883 3,720 —

Retail, entertainment and other 11,065 8,701 26,383

Total revenue $ 368,694 $ 220,498 $ 618,482

Total revenue for the three months ended September 30, 2024 decreased 0.4% to $630.0 million, from $632.5 million in the same period last year and total revenue for the nine months ended September 30, 2024 increased 1.8% to $1.87 billion, from $1.84 billion in the same period last year.

We saw total revenue increase in our Casinos & Resorts reportable segment, mainly due to the inclusion of our Bally’s Chicago temporary casino property, which contributed approximately $32.6 million and $64.2 million during the three and nine months ended September 30, 2024, respectively, partially offset by the incremental decrease in revenue associated with the closure of our Tropicana Las Vegas property during the second quarter of 2024 of approximately $25.0 million and $32.1 million, respectively.

Additionally, the expanded operating jurisdictions within our North America Interactive reportable segment contributed incremental revenue of approximately $7.8 million and $33.9 million for the three and nine months ended September 30, 2024, respectively, compared to the prior year.

Total revenue for the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor period from January 1, 2025 to February 7, 2025 decreased 5% or $29.3 million, from $618.5 million in the three months ended March 31, 2024 (Predecessor).

The Queen contributed $34.7 million to total revenues for the Successor period.

Revenue for Casinos & Resorts was up approximately 3%, or $8.8 million, mainly due to the contribution of Queen offset by negative impacts of severe weather conditions across our portfolio in January and February.

International interactive revenue was down 22%, or $42.9 million, primarily due to the sale of portions of our international interactive business in Asia in the fourth quarter of 2024.

North America Interactive segment revenues were relatively flat year over year, increasing $1.8 million, or 3.9%.

Gaming and Non-gaming Expenses

Gaming and non-gaming expenses for the three months ended September 30, 2024 decreased $0.9 million, from $287.2 million in 2023, and for the nine months ended September 30, 2024 increased $27.0 million, from $828.4 million in 2023.

The overall increase in gaming and non-gaming expenses from the prior year was mainly attributable to the inclusion of expenses from our recently opened Bally’s Chicago temporary casino which contributed approximately $13.9 million and $46.9 million to the increase in both gaming and non-gaming expenses during the three and nine months ended September 30, 2024, respectively, partially offset by the incremental decrease in expense associated with the closure of our Tropicana Las Vegas property of $13.8 million and $28.9 million, respectively.

Gaming and non-gaming expenses for the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor period from January 1, 2025 to February 7, 2025 decreased 6% or $17.1 million, from $284.3 million in the three months ended March 31, 2024 (Predecessor).

The overall decrease in gaming and non-gaming expenses from the prior year was attributable to the decrease in revenues year over year.

General and Administrative

General and administrative expense for the three months ended September 30, 2024 increased $43.0 million from $230.6 million in the same period last year, and for the nine months ended September 30, 2024 increased $42.3 million from $732.1 million in the same period last year.

The year to date fluctuation in general and administrative expense is primarily attributable to higher operating expenses associated with the opening of our Bally’s Chicago property and increased Merger Agreement costs in the current year, offset by decreased acquisition and integration costs and severance and employee related restructuring costs compared to prior year.

General and Administrative expense for the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor period from January 1, 2025 to February 7, 2025 increased 11% or $26.4 million, from $248.4 million in the three months ended March 31, 2024 (Predecessor).

This increase was mainly due to $15.9 million and $11.2 million of costs incurred in connection with the Merger Agreement during the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor period from January 1, 2025 to February 7, 2025, respectively.

Depreciation and Amortization

Depreciation and amortization for the three months ended September 30, 2024 was $77.8 million, an increase of $0.3 million compared to the same period last year, and for the nine months ended September 30, 2024 was $316.3 million, an increase of $85.1 million compared to the same period last year.

The year to date increase was primarily driven by our Tropicana Las Vegas property, where we recorded accelerated depreciation of $80.1 million on assets as a result of the recent closure of the property on April 2, 2024.

Depreciation and Amortization expense for the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor period from January 1, 2025 to February 7, 2025 decreased 56% or $89.9 million, from $159.7 million in the three months ended March 31, 2024 (Predecessor).

The decrease was primarily driven by $80.1 million of accelerated depreciation recorded in the first quarter of 2024 related to the closure of the Tropicana Las Vegas property.

Income (Loss) From Operations

Loss from operations was $157.7 million for the three months ended September 30, 2024 compared to income from operations of $37.2 million in the same period last year.

Loss from operations was $226.0 million for the nine months ended September 30, 2024 compared to income from operations of $420.0 million in the same period last year.

The change year-over-year was driven by the loss on sale-leaseback of $150.0 million related to the lease modification event involving the real estate underlying the Bally’s Chicago project in the current year, compared to the gain on sale-leaseback of $374.3 million recorded during the first quarter of 2023 related to our Hard Rock Biloxi and Bally’s Tiverton properties, combined with the depreciation at our Tropicana Las Vegas property in the current year, as noted above.

The decrease in income (loss) from operations for the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor period from January 1, 2025 to February 7, 2025 of $51.4 million compared to the three months ended March 31, 2024 (Predecessor).

Other Income (Expense)

Total other expense increased $68.7 million to $123.8 million for the three months ended September 30, 2024 from $55.1 million, and increased $83.6 million to $259.7 million for the nine months ended September 30, 2024 from $176.0 million, each compared to the same periods last year.

The increase in other expense was primarily attributable to an increase in interest expense due to higher interest rates of our borrowings year-over-year and increased foreign currency losses, partially offset by increased interest income recognized on our derivative instruments.

The increase in other expense for the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor period from January 1, 2025 to February 7, 2025 of $21.8 million compared to the three months ended March 31, 2024 (Predecessor) was primarily attributable to an increase in interest expense due to higher interest rates of our borrowings year-over-year and increased foreign currency losses, partially offset by increased interest income recognized on our derivative instruments.

Provision (Benefit) for Income Taxes

Benefit for income taxes for the three and nine months ended September 30, 2024 was $33.6 million and $3.7 million, respectively, compared to provision for income taxes of $43.9 million and $153.0 million for the three and nine months ended September 30, 2023, respectively.

The effective year to date tax rate for 2024 was 0.8% compared to 62.7% in the prior year.

The 2024 year to date effective tax rate differed from the US federal statutory tax rate of 21%, creating a benefit for income tax on the Company’s Loss before income taxes, largely due to an increase in the valuation allowance, entirely offset by discrete tax asset related to the sale-leaseback transaction involving the real estate underlying the Bally’s Chicago project.

The 2023 year to date effective tax rate was higher than the US federal statutory tax rate of 21%, largely due to an increase in the valuation allowance and a tax liability for a discrete item related to the deferred gain on sale-leaseback transactions in Mississippi and Rhode Island.

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

The EU effective dates are January 1, 2024 and January 1, 2025, for different aspects of the directive.

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

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

During the period from February 8, 2025 to March 31, 2025 (Successor), the Company recorded a benefit for income tax of $(97.1) million, and a provision for income tax of $0.7 million, and $31.4 million during the period from January 1, 2025 to February 7, 2025 (Predecessor), and the three months ended March 31, 2024 (Predecessor), respectively.

The effective tax rate for period from February 8, 2025 to March 31, 2025 (Successor), period from January 1, 2025 to February 7, 2025 (Predecessor), and the three months ended March 31, 2024 (Predecessor) was 155.2%, (1.3)%, and 22.0%, respectively.

As of March 31, 2025 (Successor), the Company projects an annual tax provision relative to its pre-tax loss in the US due to the valuation allowance on interest, and a tax provision internationally relative to its pre-tax income, which results in a combined 204% annual effective tax rate, as the combined pre-tax income by jurisdiction is minimized.

Net Income (Loss) and Earnings (Loss) Per Share

Net loss for the three months ended September 30, 2024 was $247.9 million, or $(5.10) per diluted share, compared to $61.8 million, or $(1.15) per diluted share, for the three months ended September 30, 2023.

Net loss for the nine months ended September 30, 2024 was $482.0 million, or $(9.96) per diluted share, compared to net income of $90.9 million, or $1.67 per diluted share, for the nine months ended September 30, 2023.

Net income for the Successor period from February 8, 2025 to March 31, 2025 was $34.5 million and net loss for the Predecessor period from January 1, 2025 to February 7, 2025 was $51.0 million compared to net loss of $173.9 million for the three months ended March 31, 2024 (Predecessor) was primarily attributable to the factors noted above.

Adjusted EBITDA and Adjusted EBITDAR by Segment

Consolidated Adjusted EBITDA was $137.7 million for the three months ended September 30, 2024 compared to $141.6 million for the same period last year.

Consolidated Adjusted EBITDA was $387.7 million for the nine months ended September 30, 2024, a decrease of $10.3 million, or 2.6%, from $398.0 million in the same period last year.

Adjusted EBITDAR for the Casinos & Resorts segment for the three months ended September 30, 2024 decreased $17.7 million to $100.4 million and for the nine months ended September 30, 2024 decreased $44.7 million to $289.7 million, each compared to the same prior year periods.

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

Adjusted EBITDAR for the International Interactive segment increased $4.6 million to $90.0 million and increased $4.5 million to $254.9 million for the three and nine months ended September 30, 2024, respectively, compared to the same prior year periods, driven by softness in our non-UK operations year-over-year, offset by stronger performance in the United Kingdom in the current year.

Adjusted EBITDAR loss for the North America Interactive segment for the three months ended September 30, 2024 was $(11.0) million compared to an adjusted EBITDAR loss of $(17.6) million for the three months ended September 30, 2023.

For the nine months ended September 30, 2024, adjusted EBITDAR loss was $(27.9) million compared to an adjusted EBITDAR loss of $(45.8) million for the nine months ended September 30, 2023.

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

Adjusted EBITDA was $83.3 million for the Successor period from February 8, 2025 to March 31, 2025 and $24.4 million for the Predecessor period from January 1, 2025 to February 7, 2025, compared to $116.5 million for the three months ended March 31, 2024 (Predecessor).

Adjusted EBITDAR was $71.5 million for the Casinos & Resorts segment for the Successor period from February 8, 2025 to March 31, 2025 and $23.6 million for the Predecessor period from January 1, 2025 to February 7, 2025 compared to $89.4 million in the three months ended March 31, 2024 (Predecessor).

Adjusted EBITDAR for the International Interactive segment was $48.2 million for the Successor period from February 8, 2025 to March 31, 2025 and $28.9 million for the Predecessor period from January 1, 2025 to February 7, 2025 compared to 83,532 for the three months ended March 31, 2024 (Predecessor).

Adjusted EBITDAR loss for the North America Interactive segment was $2.3 million for the Successor period from February 8, 2025 to March 31, 2025 and Adjusted EBITDAR loss of $5.7 million for the Predecessor period from January 1, 2025 to February 7, 2025 compared to Adjusted EBITDAR loss of $9.1 million in the three months ended March 31, 2024 (Predecessor).

The following table presents segment Adjusted EBITDAR, which is our reportable segment GAAP measure and our primary measure for profit or loss for our reportable segments, and consolidated Adjusted EBITDA.

The following table reconciles consolidated Adjusted EBITDA, which is a non-GAAP measure, to net income (loss), as derived from our financial statements (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

Successor Predecessor

(in thousands) Period from February 8, 2025 to March 31, 2025 Period from January 1, 2025 to February 7, 2025 Three Months Ended

March 31, 2024

Casinos & Resorts $ 226,851 $ 124,299 $ 342,329

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North America Interactive 27,557 16,941 39,567

Corporate & Other 1,536 273 1,903

Total $ 368,694 $ 220,498 $ 618,482

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North America Interactive (2,345) (5,661) (9,114)

Other (13,163) (12,883) (40,377) (46,687)

Corporate & Other (9,703) (6,774) (15,721)

Total 107,687 40,059 148,115

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Restructuring charges (4)

1,068 (411) (17,921) (20,673)

Tropicana Las Vegas demolition costs (5)

(19,643) — (31,904) —

Decommissioning costs (6)

Tropicana Las Vegas demolition and closure costs (5)

(5,931) (2,605) (464)

Share-based compensation (2,740) (1,954) (3,058)

(Loss) gain on sale-leaseback, net (7)

(150,000) — (150,000) 374,321

Planned business divestiture (8)

— (35) — (2,089)

Impairment charges (9)

— — (12,757) (9,653)

Merger Agreement costs (6)

(15,875) (11,233) (770)

Payment Service Provider write-off (11)

(3,683) (949) 523

(6,475) 3,549 (7,854) 507

Net (loss) income $ (247,855) $ (61,802) $ (481,965) $ 90,883

Net income (loss) $ 34,516 $ (51,024) $ (173,914)

__________________________________

(1) Consists of the operating lease components contained within our triple net master lease with GLPI for the real estate assets used in the operation of Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities, Bally’s Black Hawk, Hard Rock Biloxi and Bally’s Tiverton, the individual triple net lease with GLPI for the land underlying Tropicana Las Vegas, through its closure in April 2024, and the triple net lease assumed in connection with the acquisition of Bally’s Lake Tahoe for real estate and land underlying the operations of the Bally’s Lake Tahoe facility.

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

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

(3) Includes acquisition, integration and other transaction related costs, financing costs incurred in connection with the prior year sale lease-back transaction.

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

(2) Non-operating expense, net includes:

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

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

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

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

As part of the binding term sheet, GLPI has agreed to reimburse the Company for such expenses and will increase rent to reflect the additional funding.

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

(7) Loss on sale-leaseback of $150 million in the third quarter of 2024 related to the lease modification of the real estate underlying the Bally’s Chicago project and gain on sale-leaseback in the prior year related to our Hard Rock Biloxi and Bally’s Tiverton properties.

(8) Losses related to a North America Interactive business that Bally’s was marketed as held-for-sale in 2023.

(9) Includes impairment charges on long-lived assets in the second quarter of 2024 and impairment charges related to assets held-for-sale in 2023.

(10) Costs incurred in connection with the merger agreement signed July 25, 2024 with Standard General.

(11) 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.

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

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

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

(7) Other includes the following items:

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

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

Critical Accounting Estimates

There were no material changes in critical accounting estimates during the period covered by this Quarterly Report on Form 10-Q.

Valuation of Intangible Assets Acquired in Business Combinations

Intangible assets consist primarily of gaming licenses, trade names, developed technology and customer lists which have been obtained through business combinations and internally developed software attributable to our interactive businesses.

Gaming licenses obtained through business combinations are generally recorded at their fair values through purchase accounting using the Greenfield Method under the income approach.

This method estimates isolated income that properly attributable to a license based on modeling a hypothetical start-up company going into business without any other assets than the gaming license being valued and building a new casino with similar utility to the existing casino.

Using this method, the valuation of the gaming license is dependent upon significant estimates such as projected revenues and cash flows, estimated construction costs, duration of that construction, pre-opening expenses and appropriate discounting.

Gaming licenses accounted for as asset acquisitions are valued at cost.

Trade names obtained through business combinations are valued using the relief-from-royalty method under the income approach.

This method estimates the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset.

As such, the value of a trade name acquired through a business combination is dependent upon estimates such as projected revenues, selection of an appropriate hypothetical royalty rate and appropriate discounting.

Developed technology is obtained through business combinations and is recorded at fair value through purchase accounting using the Multi-Period Excess Earnings Method under the income approach.

The principle behind this method is that the value of an intangible asset is equal to the present value of the incremental after tax cash flows attributable only to the subject intangible asset after deducting Contributory Asset Charges (“CACs”).

The principle behind a CAC is that an intangible asset ‘rents’ or ‘leases’ from a hypothetical third party all the assets it requires to produce the cash flows resulting from its development, that each project rents only those assets it needs and not the ones that it does not need, and that each project pays the owner of the assets a fair return on the value of the rented assets.

Under this method, the valuation of developed technology is dependent on estimates such as projected revenues and cash flows, CAC and appropriate discounting.

Certain trade names are considered to be indefinite lived based on future expectations of continuing to brand our corporate name and certain properties under the Bally’s trade name indefinitely.

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 not be recoverable.

For our finite-lived intangible assets, we establish 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.

There were no material changes to other critical accounting estimates during the period covered by this Quarterly Report on Form 10-Q.

Refer to Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for a complete list of our Critical Accounting Estimates.

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Our strategy has been to maintain moderate leverage and substantial capital resources in order to take advantage of opportunities, to invest in our businesses and acquire properties at what we believe to be attractive valuations.

As such, we have continued to invest in our land-based casino business and build on our interactive/iGaming gaming business.

As such, we have continued to invest in our land-based casino business and build on our interactive/iGaming business.

We believe that existing cash balances, operating cash flows and availability under our Revolving Credit Facility, as explained below, will be sufficient to meet funding needs for operating, capital expenditure and debt service purposes.

Cash Flows Summary

Nine Months Ended September 30,

(in thousands) 2024 2023

Net cash provided by operating activities $ 76,178 $ 118,359

Successor Predecessor

(in thousands) Period from February 8, 2025 to March 31, 2025 Period from January 1, 2025 to February 7, 2025 Three Months Ended March 31, 2024

Net cash provided by (used in) operating activities $ 42,001 $ (80,186) $ (7,854)

Net cash used in investing activities (20,797) (17,697) (43,401)

Net cash provided by (used in) financing activities 75,708 (79,560)

Effect of foreign currency on cash and cash equivalents 4,472 (2,251)

Change in cash and cash equivalents and restricted cash held for sale — (1,648)

Net cash provided by financing activities 14,073 97,988 51,327

Effect of foreign currency on cash and cash equivalents and restricted cash (1,497) (457) (4,445)

Net change in cash and cash equivalents and restricted cash 33,780 (352) (4,373)

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Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2024 was $76.2 million, compared to $118.4 million for the nine months ended September 30, 2023.

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

Net cash provided by operating activities for the Successor period from February 8, 2025 to March 31, 2025 was $42.0 million and net cash used in operating activities for the Predecessor period from January 1, 2025 to February 7, 2025 was $80.2 million.

Both the Successor and Predecessor periods were impacted by net income (loss) positions, depreciation and amortization and changes in working capital.

The Successor period also incurred additional debt related costs, $17.4 million loss on extinguishment of debt and $14.6 million of amortization of debt discount and debt issuance costs, in connection with the Merger.

Net cash used in operating activities for the three months ended March 31, 2024 (Predecessor) was $7.9 million and was driven by a $173.9 million net loss in the quarter coupled with $80.1 million of accelerated depreciation related to our Tropicana Las Vegas assets.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2024 was $191.1 million, an increase of $188.8 million compared to net cash used in investing activities of $2.2 million for the nine months ended September 30, 2023.

This change was primarily driven by the proceeds from sale-leaseback transactions in the prior year and a decrease in cash paid for acquisitions and capital expenditures year-over-year.

Net cash used in investing activities for the Successor period from February 8, 2025 to March 31, 2025 of $20.8 million and the Predecessor period from January 1, 2025 to February 7, 2025 of $17.7 million, compared to $43.4 million of cash used in investing for the three months ended March 31, 2024 (Predecessor) was driven by an increase in capital expenditures offset by cash paid for acquisitions, net of cash acquired.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2024 was $75.7 million compared to net cash used in financing activities of $79.6 million for the nine months ended September 30, 2023.

This increase was mainly attributable to an increase in long-term debt borrowings offset by higher payments made year-over-year and a decrease in stock repurchases.

Net cash provided by financing activities for the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor period from January 1, 2025 to February 7, 2025 increased 118.3% or $60.7 million, from $51.3 million in the three months ended March 31, 2024 (Predecessor).

This increase was mainly attributable to higher net issuance of long-term debt in the Successor period from February 8, 2025 to March 31, 2025 and Predecessor period from January 1, 2025 to February 7, 2025 offset by cash paid for the Merger.

Capital Return Program

As of September 30, 2024, there was $95.5 million available for use under the capital return program, subject to limitations in our regulatory and debt agreements.

As of March 31, 2025, there was $95.5 million available for use under the capital return program, subject to limitations in our regulatory and debt agreements.

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.

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There is no fixed time period to complete share repurchases.

We did not pay cash dividends during the nine months ended September 30, 2024 or 2023, nor do we currently intend to pay any dividends on our common stock in the foreseeable future.

We did not pay cash dividends during the Successor period from February 8, 2025 to March 31, 2025, the Predecessor period from January 1, 2025 to February 7, 2025 nor the three months ended March 31, 2024 (Predecessor), nor do we currently intend to pay any dividends on our common stock in the foreseeable future.

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

Debt and Lease Obligations

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

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

Unsecured Notes

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

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

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

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

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

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

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

After two years, notes can be redeemed at par.

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

Credit Facility

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

As of September 30, 2024, the Company was in compliance with all applicable covenants.

As of March 31, 2025, the Company was in compliance with all applicable covenants.

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

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

In the third quarter of 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.

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

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

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The Company is committed under various operating lease agreements for real estate and property used in operations.

Minimum rent payable under operating leases was $4.17 billion as of September 30, 2024, of which $45.3 million is due within the current year.

Minimum rent payable under operating leases was $5.23 billion as of March 31, 2025, of which $181.2 million is due within the current year.

Refer to Note 16 “Leases” in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

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

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

During 2023, the Company’s Bally’s Tiverton and Hard Rock Biloxi properties were added to the Master Lease on January 3, 2023, as a result of a transaction with GLP Capital, L.P.

(“GLP”), an affiliate of GLPI, related to the land and real estate assets for a total consideration of $625.4 million.

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

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

In addition to the properties under the Master Lease, the Company leases 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.

During the third quarter, the Company entered into a lease modification, whereby GLPI funded $48.6 million to the Company for the demolition of the building at the Tropicana Las Vegas site in exchange for increasing annual rent by $4.1 million.

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

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

Additionally, in the third quarter of 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 permanent casino.

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

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

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

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

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

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

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

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

All such transactions are subject to required regulatory approvals.

As of March 31, 2025 (Successor), the Company leases certain properties from GLPI under two separate master lease agreements, the “Master Lease,” and the “Master Lease No.

2.” 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 the “Master Lease” which requires combined minimum annual payments of $106.1 million.

The Company’s Bally’s Kansas City and Bally’s Shreveport properties are leased under the terms of the “Master Lease No.

2” which requires combined minimum annual payments of $32.2 million.

Both leases have an initial term of 15 years and include four, five-year options to renew and are subject to a minimum 1% annual escalation or greater escalation dependent on CPI.

Following the Merger, the Company also has a master lease agreement through Queen with GLPI, the “Queen Master Lease”, with The Queen Baton Rouge, The Belle of Baton Rouge, Casino Queen Marquette and DraftKings at Casino Queen properties being leased under the terms of the Queen Master Lease, which requires combined minimum annual payments of $31.9 million.

The Queen Master Lease has an initial term of 15 years and include four, five-year options to renew and is subject to annual escalation.

In addition to the properties under the master leases 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 the possibility of extending up to 99 years through renewal options.

Annual rent under the lease is $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.

Capital Expenditures

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Capitalized software expenditures relate to the creation, production and preparation of software for use in our online gaming operations.

For the nine months ended September 30, 2024, capital expenditures were $155.8 million compared to $266.2 million in the same period last year.

During the nine months ended September 30, 2024, we continued our spending on our planned projects and maintenance at our casino properties, the most significant being our future Bally’s Chicago permanent facility.

Capital expenditures for the Successor period from February 8, 2025 to March 31, 2025 were $30.5 millionand the Predecessor Period from January 1, 2025 to February 7, 2025 were $16.4 million compared to $28.1 million for the three months ended March 31, 2025 (Predecessor).

For the Successor period from February 8, 2025 to March 31, 2025 and the Predecessor Period from January 1, 2025 to February 7, 2025, we continued our spending on our planned projects and maintenance at our casino properties, the most significant being our future Bally’s Chicago permanent facility.

Bally’s Twin River - In connection with our partnership with IGT, we have committed to invest $100 million in Bally’s Twin River over the term of our master contract, ending in 2043, with Rhode Island to expand the property and add additional amenities along with other capital improvements.

As a major component of this, we have constructed and opened a 14,000 square foot Korean-style spa, and a 40,000 square foot casino expansion, both of which opened in the first half of 2023.

Approximately $48.2 million of the committed investment remains as of September 30, 2024.

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

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

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

Centre County, PA - In September 2024, we issued a termination notice to cancel the framework agreement entered into on December 31, 2020 to design, develop, construct and manage a Category 4 licensed casino in Centre County, Pennsylvania.

We concluded that market circumstances have changed and that such development at this point no longer fits with our strategic objectives.

In accordance with the provisions of the framework agreement, we paid a termination fee of $5 million and the charge is reflected the quarter ending September 30, 2024.

Approximately $45.0 million of the committed investment remains as of March 31, 2025.

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

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

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

In 2024, we estimate spending of approximately $190.2 million primarily dedicated to demolition and site preparation.

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

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

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

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

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

As of September 30, 2024, obligations related to these agreements were $129.8 million, with contracts extending through 2037.

As of March 31, 2025, obligations related to these agreements were $122.7 million, with contracts extending through 2036.

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

As of September 30, 2024, the cumulative minimum obligation committed in these agreements is approximately $54.7 million, extending through 2029.

As of March 31, 2025, the cumulative minimum obligation committed in these agreements is approximately $37.6 million, extending through 2029.

As of March 31, 2025, the net aggregate available amount of capacity under the Shared Cap (as defined in the Note Purchase Agreement) was approximately $154 million.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis