What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-23 compared with 2025-03-17 · 2656 added, 1234 removed, 611 unchanged (86% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID 34 )

Consolidated Balance Sheets at December 31, 202 4 and 202 3

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

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

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

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

Consolidated Balance Sheets at December 31, 2025 (Successor) and 2024 (Predecessor)

Consolidated Statements of Operations for the Period from February 8, 2025 to December 31, 2025

(Successor), Period from January 1, 2025 to February 7, 2025 (Predecessor) and Year ended December 31,

2024 (Predecessor)

Consolidated Statements of Comprehensive Loss for the Period from February 8, 2025 to December 31,

2025 (Successor), Period from January 1, 2025 to February 7, 2025 (Predecessor) and Year ended

December 31, 2024 (Predecessor)

Consolidated Statements Stockholders’ Equity (Deficit) for the Period from February 8, 2025 to December

31, 2025 (Successor), Period from January 1, 2025 to February 7, 2025 (Predecessor) and Year ended

December 31, 2024 (Predecessor)

Consolidated Statements of Cash Flows for the Period from February 8, 2025 to December 31, 2025

(Successor), the Period from January 1, 2025 to February 7, 2025 (Predecessor) and Year ended

December 31, 2024 (Predecessor)

Notes to Consolidated Financial Statements

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.

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.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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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.

We have audited the accompanying consolidated balance sheets of Bally's Corporation and subsidiaries (the

“Company”) as of December 31, 2025 (successor) and 2024 (predecessor), the related consolidated statements of

comprehensive loss, stockholders’ equity (deficit), and cash flows for the periods from February 8, 2025 to

December 31, 2025 (successor), from January 1, 2025 to February 7, 2025 (predecessor), and for the year ended

December 31, 2024 (predecessor), and the related notes (collectively referred to as the “financial statements”).

opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of

December 31, 2025 (successor) and 2024 (predecessor), and the results of its operations and its cash flows for the

periods from February 8, 2025 to December 31, 2025 (successor), from January 1, 2025 to February 7, 2025

(predecessor), and for the year ended December 31, 2024 (predecessor), 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, 2025 (successor),

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 23, 2026 , 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.

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.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

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.

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.

Critical Audit Matters

The critical audit matter communicated below are matters arising from the current-period audit of the financial

statements that were communicated or required to be communicated to the audit committee and that (1) 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 matters below,

providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill – International Interactive Reporting Unit – Refer to Notes 2 and 10 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.

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, 2025, the value of the International Interactive

reporting unit goodwill is $1.5 billion .

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

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.

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

• 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 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;

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◦ Conducting inquiries with management;

◦ 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;

◦ 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

◦ Testing the source information underlying the determination of the market multiples;

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

/s/ Deloitte & Touche LLP

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

by management.

Business Combination – Merger – Refer to Notes 1, 2, and 7 to the financial statements

Critical Audit Matter Description

On February 7, 2025, the Company completed the Merger with SG Parent LLC, (“Parent”), The Queen Casino &

Entertainment, Inc., (“Queen”), and as a result of the transactions, at closing, Parent and its affiliates beneficially

owned 73.8% of the issued and outstanding Company common stock.

The Merger between the Company and Queen was accounted for as a transaction between entities under common

control in accordance with ASC Topic 805, Business Combinations (“ASC 805”), in which the accounting acquirer

(Parent and its affiliates) obtained control of the Company.

The Company has elected to push down its Parent’s basis

in its net assets into its financial statements, and as a result, the net assets of the Predecessor were measured and

recognized at their fair values as of the acquisition date and were combined with those of Queen at Queen’s

historical carrying amounts and are presented on a combined basis.

The fair value of the Merger consideration was $955.6 million which was allocated to the assets acquired and

liabilities assumed based on their respective fair values, including the fair value of the operating segments and

reporting units, gaming licenses, customer relationships, developed technology, trade names and Intellectual

property license.

The fair value determination of these intangible assets requires management to make significant estimates and

assumptions related to expected cash flows and projected financial results, including forecasted revenues

(collectively the “Merger forecasts”), and the selection of the discount rate.

Changes to these assumptions could

result in a significant impact on the recognition of the acquired gaming licenses, customer relationships, developed

technology, trade name and intellectual property license intangible assets, and the determination of goodwill.

Therefore, performing audit procedures to evaluate the reasonableness of these assumptions required a high degree

of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

Business Combination – Intralot S.A.

– Refer to Notes 1 and 7 to the financial statements

Critical Audit Matter Description

On October 8, 2025, Intralot S.A.

(“Intralot”) completed the acquisition of the Company’s issued and outstanding

capital stock of Bally’s Holdings Limited, (“Bally’s International Interactive”) and combined it with Intralot’s global

lottery and gaming operations (the “Intralot Transaction”).

The Intralot Transaction consideration comprised of €1.530 billion ( $1.8 billion ) cash paid by Intralot, and 873.7

million newly issued Intralot shares to the Company.

Following the Intralot Transaction, the Company became the

majority shareholder of Intralot with an aggregate 57.9% interest.

As the Company obtained a controlling financial

interest in Intralot as a result of the Intralot Transaction, the Company is deemed the accounting acquirer of Intralot

for purposes of financial reporting.

Accordingly, the Intralot Transaction will be accounted for as a business

combination under ASC 805.

The consideration for the purchase accounting is approximately $1.60 billion, consisting of (i) the fair value of the

Intralot shares issued to the Company on the closing date, and (ii) the fair value of Bally’s previously held equity

interest in Intralot.

The remaining 42.1% of Intralot’s equity interests held by third parties will be reflected as a

noncontrolling interest of the Company in the equity section of its consolidated balance sheet in accordance with

The preliminary fair value of the noncontrolling interest on the closing date was $1.1 billion, based on

Intralot’s share price on the closing date and the control premium.

The fair value of consideration was allocated to the assets acquired and liabilities assumed based on their respective

fair values, including the fair value of the synergies, developed technology, trade names, backlog, and customer

relationship.

The fair value determination of these intangible assets requires management to make significant estimates and

assumptions related to expected cash flows and projected financial results, including forecasted revenues

(collectively the “Intralot forecasts”), and the selection of the discount rate.

Changes to these assumptions could

result in a significant impact on the recognition of the acquired developed technology, trade names, backlog and

customer relationship intangible assets and the determination of goodwill.

Therefore, performing audit procedures to

evaluate the reasonableness of these assumptions required a high degree of auditor judgment and an increased extent

of effort, including the need to involve our fair value specialists.

How the Critical Audit Matters Were Addressed in the Audit

Our audit procedures related to the Merger forecasts and Intralot forecasts (collectively forecasts”) and the selection

of the discount rates used by management to determine the fair value of the acquired intangible assets and the

assigned goodwill included the following, among others:

• We tested the effectiveness of controls over the valuation of the operating segments, reporting units, and

intangible assets, including management’s controls over the forecasts and the selection of the discount rate

• We evaluated the assumptions and estimates included in the forecasts by:

◦ Comparing the 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

◦ Comparing the forecasts to historical financial results;

◦ Conducting inquiries with management;

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

• With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate 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

New York, New York

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Accounts receivable, net

Inventory 19,317 14,629

Tax receivable

Prepaid expenses and other current assets

Assets held for sale — 1,815

Total current assets

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Right of use assets, net

Goodwill 1,799,944 1,935,803

Intangible assets, net

Deferred tax asset

Other assets 127,030 110,317

Total assets $ 5,860,137 $ 6,861,103

Liabilities and Stockholders’ Equity

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Accrued and other current liabilities

481,292 651,719

Liabilities related to assets held for sale — 1,307

Total current liabilities

Long-term debt, net

Long-term portion of financing obligation — 200,000

Long-term portion of lease liabilities

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200,000,000 shares authorized;

40,787,007 and 39,973,202 shares issued;

40,787,007 and 39,973,202 shares outstanding

48,524,809 (Successor)

and 40,787,007 (Predecessor) shares issued;

48,524,809 (Successor) and 40,787,007

(Predecessor) shares outstanding)

Preferred stock ( $ 0.01 par value;

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Additional paid-in-capital

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

Accumulated deficit

Accumulated other comprehensive loss ( 260,267 ) ( 209,558 )

( 1,123,649 )

Accumulated other comprehensive income (loss)

Total Bally’s Corporation stockholders’ equity

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(In thousands, except per share data)

Years Ended December 31,

2024 2023 2022

Gaming $ 2,051,668 $ 1,992,041 $ 1,846,124

Non-gaming 398,810 457,032 409,581

Total revenue

Operating (income) costs and expenses:

Gaming 934,063 888,937 812,918

Non-gaming 189,088 216,239 196,318

General and administrative

Gain on sale-leaseback, net

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

Impairment charges

Gain on sale-leaseback, net

Depreciation and amortization

Total operating costs and expenses

(Loss) income from operations

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

Loss from operations

Other (expense) income:

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Loss before income taxes

Provision (benefit) for income taxes 15,252 1,762 ( 28,923 )

Provision for income taxes

Net loss attributable to non-controlling interests

Net loss attributable to Bally’s Corporation

$ ( 650,074 )

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

$ ( 567,754 )

Basic and diluted loss per share

Weighted average common shares outstanding, basic and diluted

The accompanying notes are an integral part of these consolidated financial statements.

BALLY’S CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

Years Ended December 31,

$ ( 665,539 )

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Other comprehensive income (loss):

Foreign currency translation adjustments ( 84,542 ) 118,781 ( 270,151 )

Foreign currency translation adjustments, net of tax

Defined benefit pension plan adjustments, net of tax

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 )

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

Other comprehensive income (loss)

Total comprehensive loss

Comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to Bally’s Corporation

$ ( 593,582 )

$ ( 618,463 )

The accompanying notes are an integral part of these consolidated financial statements.

BALLY’S CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDE RS’ EQUITY (DEFICIT)

(In thousands, except shares)

Common Stock Additional

Paid-in Capital Treasury

Stock Retained

Earnings (Deficit) Accumulated

Comprehensive

Loss Non-controlling Interest Total Stockholders’

Shares Outstanding Amount

Stockholders’

Balance as of December 31, 2023

Issuance of restricted stock and other stock awards 458,603 4 ( 5,957 ) 429 — — — ( 5,524 )

(Predecessor)

Issuance of restricted stock and other

Share-based compensation

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

Settlement of consideration

Acquired non-controlling interest

Other comprehensive loss

Net loss — — — — ( 425,546 ) — — ( 425,546 )

Balance as of December 31, 2024

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 ) —

(Predecessor)

( 1,123,649 )

Issuance of restricted stock and other

Share-based compensation

Other comprehensive loss

Balance as of February 7, 2025

(Predecessor)

$ ( 1,174,673 )

$ ( 269,710 )

Comprehensive

Stockholders’

Balance as of February 8, 2025

Issuance of restricted stock and other

Share-based compensation - equity

Bally's Chicago Issuance

Share repurchases

( 22,804,384 )

Purchase of Bally's Intralot

Recognition of non-controlling

interest in Bally's International

Purchase of incremental Intralot

Other comprehensive income

Balance as of December 31, 2025

$ ( 650,074 )

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

January 1, 2025

to February 7,

(in thousands)

Years Ended December 31,

2024 2023 2022

Cash flows from operating activities:

$ ( 665,539 )

$ ( 567,754 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

Non-cash lease expense 58,727 56,945 32,438

Non-cash amortization of right of use assets

Share-based compensation

Impairment charges

Amortization of debt discount and debt issuance costs

11,707 11,312 10,896

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

Non-cash amortization of debt discounts, debt issuance costs and fair value

Loss on extinguishment of debt

Gain on sale-leaseback, net

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

Loss on disposal of business

Deferred income taxes

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 fair value of fair value option assets

Loss from equity method investments

Change in value of performance warrants

13,965 7,716 ( 32,577 )

Change in contingent consideration payable

Proceeds from interest rate contracts

Foreign exchange loss (gain)

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Changes in current operating assets and liabilities

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

Net cash used in (provided by) operating activities

Cash flows from investing activities:

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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

Cash paid for shares in Intralot

Cash paid for The Star Investment

Capital expenditures

Proceeds from sale of property and equipment to GLPI

Cash paid for capitalized software

Cash and cash equivalents transferred in sale of business

( 4,178 ) — —

Restricted cash transferred in sale of business

( 37,541 ) — —

Proceeds from net investment hedges

Acquisition of gaming licenses

Purchase of equity securities — — ( 3,175 )

Other intangible asset acquisitions ( 929 ) — ( 665 )

Other investing activities

Net cash provided by (used in) investing activities

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

Cash flows from financing activities:

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Repayments of long-term debt

Deferred payables

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

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

( 1,938,818 )

Debt prepayment premium

Deferred payables, net

Payment of financing fees

Share repurchases

Purchase of incremental Intralot shares

Bally’s Chicago Inc.

share issuance

Other financing activities

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Effect of foreign currency on cash and cash equivalents

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

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Cash and cash equivalents and restricted cash, end of period

Years Ended December 31,

2024 2023 2022

January 1, 2025

to February 7,

(in thousands)

Supplemental disclosure of cash flow information:

Cash paid for interest, net of amounts capitalized

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

Unpaid internally developed software 5,419 1,891 —

Unpaid capitalized software

Consideration for purchase of Intralot

Non-controlling interest acquired

Consideration issued for the Company Merger

Consideration issued for the Queen Merger

Initial recognition of Bally’s International Interactive non-controlling interest

Unpaid New York gaming license fee

Intralot shares received as settlement of loan receivable

Consideration receivable from sale of assets

Sale of business in exchange for note receivable

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

Non-controlling interest acquired

( 428 ) — ( 3,332 )

Net purchase consideration for acquisitions — 58,580 —

Years Ended December 31,

2024 2023 2022

January 1, 2025

to February 7,

(in thousands)

Reconciliation of cash and cash equivalents and restricted cash:

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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 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, 2025 (Successor), the Company owns and manages the

following properties within its Casinos & Resorts reportable segment:

Casinos and Resorts

Bally’s Twin River Lincoln Casino Resort (“Bally’s Twin River”)

Lincoln, Rhode Island Casino and Resort 2004

Lincoln, Rhode Island

Casino and Resort

Bally’s Arapahoe Park

Aurora, Colorado Racetrack/OTB Site 2004

Aurora, Colorado

Racetrack/OTB Site

Hard Rock Hotel & Casino Biloxi (“Hard Rock Biloxi”) (2)

Biloxi, Mississippi Casino and Resort 2014

Biloxi, Mississippi

Casino and Resort

Bally’s Tiverton Casino & Hotel (“Bally’s Tiverton”) (2)

Tiverton, Rhode Island Casino and Hotel 2018

Tiverton, Rhode Island

Casino and Hotel

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

Dover, Delaware

Casino, Resort and Raceway

Bally’s Black Hawk (1)(2)

Black Hawk, Colorado

Three Casinos

Bally’s Kansas City Casino (“Bally’s Kansas City”) (2)

Kansas City, Missouri Casino 2020

Kansas City, Missouri

Bally’s Vicksburg Casino (“Bally’s Vicksburg”)

Vicksburg, Mississippi Casino and Hotel 2020

Vicksburg, Mississippi

Casino and Hotel

Bally’s Atlantic City Casino Resort (“Bally’s Atlantic City”)

Atlantic City, New Jersey Casino and Resort 2020

Atlantic City, New Jersey

Casino and Resort

Bally’s Shreveport Casino & Hotel (“Bally’s Shreveport”) (2)

Shreveport, Louisiana Casino and Hotel 2020

Shreveport, Louisiana

Casino and Hotel

Bally’s Lake Tahoe Casino Resort (“Bally’s Lake Tahoe”)

Lake Tahoe, Nevada Casino and Resort 2021

Lake Tahoe, Nevada

Casino and Resort

Bally’s Evansville Casino & Hotel (“Bally’s Evansville”) (2)

Evansville, Indiana Casino and Hotel 2021

Evansville, Indiana

Casino and Hotel

Bally’s Quad Cities Casino & Hotel (“Bally’s Quad Cities”) (2)

Rock Island, Illinois Casino and Hotel 2021

Rock Island, Illinois

Casino and Hotel

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

Chicago, Illinois Casino 2023

Chicago, Illinois

Bally’s Golf Links at Ferry Point (“Bally’s Golf Links”)

Bronx, New York Golf Course 2023

Bronx, New York

The Queen Baton Rouge (2)

Baton Rouge, Louisiana

Bally’s Baton Rouge Casino and Hotel (“Bally's Baton Rouge”) (2)

Baton Rouge, Louisiana

Casino and Hotel

Casino Queen Marquette (2)

Marquette, Iowa

DraftKings at Casino Queen (2)

Louis, Illinois

Casino and Hotel

__________________________________

2 unchanged sentences

Refer to Note 15 “ Leases ” for further information.

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

(3) Temporary casino facility as permanent casino resort is 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.

The Company’s Bally's Intralot B2B reportable segment includes Intralot’s global business-to-business (“B2B”) operations and

licensing revenue generating operations.

Intralot was acquired by the Company in the fourth quarter of 2025.

“Acquisition of Intralot” subsection below for further information.

The Company’s Bally's Intralot B2C reportable segment includes the Company’s business-to-consumer (“B2C”) gaming

operations in international jurisdictions and one casino property, Bally's Newcastle , in the UK.

The North America Interactive reportable segment include s a portfolio of sports betting and iGaming offerings in the United

States and Canada.

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.

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”).

On February 7, 2025 , as a result of the transactions,

Parent and its affiliates beneficially owned 73.8 % of the issued and outstanding Company common stock.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the Merger Agreement, (i) SG Gaming contributed to the Company all shares of common stock of Queen that it

owned (the “Queen Share Contribution”) in exchange for 26,909,895 shares of common stock of the Company (“Company

Common Stock”) based on a 2.4536890595 share exchange ratio, (ii) the Company issued approximately 3,542,201 shares of

Company Common Stock to the other stockholders of Queen, (iii) immediately thereafter, Merger Sub I merged into the

Company (the “Company Merger”), with the Company surviving the Company Merger and (iv) immediately thereafter, Merger

Sub II merged into Queen (the “Queen Merger,” and together with the Company Merger, the “ Merger ”), 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”)) were 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) had the option to

make a Rolling Share Election.

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.

(“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”.

Support Agreements obligated 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 a

Framework Agreement originally entered into in 2020 (the “Framework Agreement”), upon completion of the Merger , and in

exchange, the Company issued 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.

In connection with the Merger , as of

February 7, 2025 , all outstanding Performance Warrants became immediately exercisable at a price of $ 0.01 per share.

Acquisition of Intralot

In 2025, following the Queen Merger, the Company held an investment in Bally’s Intralot S.A.

(“Intralot”) , which was

accounted for as an equity method investment under the fair value option.

The total initial investment represented

approximately 26.86 % of Intralot’s outstanding shares.

As part of this investment structure, the Company held a € 25.0 million

delayed draw term loan receivable from a third‑party investment holding company, the repayment of which was contractually

tied to the delivery of Intralot shares.

During the three months ended June 30, 2025 (Successor), the Company settled this

outstanding delayed draw term loan by receiving 34.3 million shares of Intralot in full satisfaction of the loan, consistent with

the fair value model that estimated repayment based on the value of Intralot shares.

In addition, on June 30, 2025, the Company

purchased 4.8 million additional Intralot shares for € 1.06 per share.

These transactions collectively triggered a mandatory tender

offer for the remaining outstanding shares of Intralot.

During the three months ended September 30, 2025 (Successor), the

mandatory tender offer was completed, and the Company’s acquired an additional 6.1 million shares of Intralot, increasing its

ownership to 34.35 % of Intralot’s outstanding shares prior to the transaction described below.

On October 8, 2025 (the “Intralot Closing Date”), the Company completed the previously announced acquisition under the

transaction agreement (the “Transaction Agreement”) of Intralot, pursuant to which Intralot agreed to acquire Bally’s

International Interactive through a combined cash-and-equity transaction.

Pursuant to the Transaction Agreement, (i) Intralot

paid the Company $ 1.8 billion in cash and issued approximately 873.7 million new shares in exchange for all of the issued and

outstanding capital stock of Bally’s Holdings Limited which held Bally’s International Interactive, (ii) the Company’s

ownership of Intralot increased to a controlling 57.9 % interest through the issuance of equity to the Company’s consolidated

subsidiary Premier Entertainment Sub, LLC via PE Sub Holdings LLC, an indirect wholly owned subsidiary of the Company,

making the Company the majority shareholder of Intralot (the “ Intralot Transaction ”).

As a result of obtaining a controlling financial interest in Intralot, the Company retained control of Bally’s International

Interactive, via Bally’s Holdings Limited, throughout the transaction.

On the Intralot Closing Date, legal ownership of Bally’s

Holdings Limited transferred from Premier Entertainment Sub to Intralot;

however, Bally’s Corporation simultaneously

obtained control of Intralot.

Accordingly, Bally’s maintained control of Bally’s International Interactive, and as a result, t he

transfer of Bally’s International Interactive was accounted for as an equity transaction with the initial recognition of a 42.1 %

non-controlling interest, and no gain or loss was recognized in earnings.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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).

Any 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).

As described in Note 1 , “ General Information ”, the Company completed the Merger with Queen on February 7, 2025 (the

“Closing”), with Queen surviving the Merger as a wholly-owned subsidiary of the Company.

The Parent and its affiliates

maintained a controlling financial interest, as defined by ASC 810, Consolidation , in Queen before and after the Merger , and in

the Company upon consummation of the Merger .

The Merger with Queen was accounted for as a transaction between entities

under common control because the Parent and its affiliates contributed a wholly owned subsidiary into the Company, which

became a controlled subsidiary of the Parent and its affiliates upon consummation of the merger.

The Company has elected to

push down its Parent’s basis in its net assets into its consolidated financial statements, and as a result, unless the context

otherwise requires, the “Company,” for periods prior to the Closing refers to Bally’s (“Predecessor”), and for the periods after

the Closing refers to the combined Company of Bally’s and Queen (“Successor” or the “Company”).

As a result of the Merger ,

the results of operations, financial position and cash flows of the Predecessor and the Successor are not directly comparable.

Bally’s was deemed to be the predecessor entity, the historical financial statements of Bally’s became the historical financial

statements of the combined Company, upon the consummation of the Merger .

As a result, the financial statements included in

this report reflect (i) the historical operating results of Bally’s prior to the Merger and (ii) the combined results of the Company

following the Closing.

The accompanying consolidated financial statements include a Predecessor period, which includes the

period through February 7, 2025 concurrent with the Merger , and a Successor period from February 8, 2025 through

December 31, 2025 .

A black line between the Successor and Predecessor periods has been placed in the consolidated financial

statements and in the tables to the notes to the consolidated financial statements to highlight the lack of comparability between

these two periods.

Certain adjustments have been made to Queen’s historical carrying values to conform accounting policies with the Company,

with any such adjustments being recorded to equity.

The preliminary purchase price of Queen is estimated based on the fair

value of all existing and outstanding shares of Queen that were exchanged for shares of Company common stock, with the net

effect of the transaction being charged to equity.

The preliminary purchase price of Queen and adjustment to equity resulting from the merger consists of the following:

(in thousands, except share and per share data)

Queen common stock outstanding on February 7, 2025

Per share ratio

Equivalent Bally’s common stock to be issued

Bally’s common stock issued to settle Queen’s outstanding warrant and restricted stock awards

Total Bally’s shares issued for Queen shares outstanding

Share price per Merger Agreement

Total purchase price

Queen net assets assumed

Equity adjustment associated with the Queen merger

For the period from February 8, 2025 to December 31, 2025 (Successor), revenue and net income from Queen was $ 216.0

million and $ 30.8 million , respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Star Entertainment Group Investment

On April 7, 2025 (Successor), the Company entered into a Binding Term Sheet with The Star Entertainment Group Limited

(“The Star”), an ASX-listed company, to invest up to A$ 300.0 million in a multi-tranche issuance of convertible notes and

subordinated debt (the “Investment”).

On April 8, 2025 (Successor), The Star announced a commitment from its largest

shareholder, Investment Holdings Pty, to subscribe for A$ 100.0 million of the Investment, reducing the Company’s

commitment to A$ 200.0 million .

On April 9, 2025 (Successor), the Company funded A$ 66.7 million , consisting of Tranche 1A

convertible notes of A$ 22.2 million (“the Convertible Notes”) and subordinated debt with a principal amount of A$ 44.4

Additionally, on May 23, 2025 (Successor), the Company and The Star entered into a Subscription Agreement and a

Subordination Deed Poll in favor of certain The Star’s senior lenders.

Following shareholder approval, the Company funded an additional principal amount of A$ 66.7 million in subordinated debt on

June 27, 2025 (Successor) and the remainder of the Company’s A$ 66.7 million commitment (the “Forward Obligation”) in

subordinated debt (together with the A$ 44.4 million and A$ 66.7 million , the “Subordinated Notes”) on October 9, 2025

Both the Convertible Notes and Subordinated Notes matured on July 2, 2029, and bore interest at an annual rate of

9 % , paid in-kind and compounded quarterly.

These investments were accounted for as debt securities under ASC 320, Investments - Debt Securities , for which the Company

had elected the fair value option allowed by ASC 825, Financial Instruments .

Under the fair value option, the investment is

remeasured at fair value at each reporting period, with changes in fair value included within Other non-operating income

(expense), net .

During the period from February 8, 2025 to December 31, 2025 (Successor) , the Company recognized $ 3.9

million of interest income from the Star Investment, which it has elected to present as part of the total change in fair value.

Company m easures fair value using a binomial lattice model as well as a discounted cash flow model, classified within Level 3

of the hierarchy.

Inputs to the valuation approach include the stock price and credit rating of The Star, volatility of 45 % ,

recovery rate of 10 % , risk free rate of 3.6 % , and the Company’s estimate of the probability of default.

During the fourth quarter of 2025, following all required regulatory approvals and pursuant to the terms of the Subscription

Agreement, The Star issued Tranche 2 convertible notes.

Using the principal value of the Subordinated Notes as payment, the

Company effectively swapped the Subordinated Notes for Tranche 2 convertible notes.

On November 28, 2025 (Successor), the

Company converted the principal amount of the outstanding convertible notes into 2.5 billion ordinary shares of The Star at a

conversion price of A$ 0.08 per share, giving the Company a 37.7 % equity interest in The Star.

The Company accounts for its

equity interest in The Star as an equity method investment under the fair value option.

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.

In 2025, following the Queen Merger, the Company had an investment in Intralot.

The total initial investment represented

approximately 26.86 % of the outstanding shares of Intralot.

During the fourth quarter of 2025, the Company acquired a

controlling financial interest in Intralot as described in Note 1 , “ General Information ” and will account for the Intralot

Transaction as a business combination (refer to Note 7 “ Business Combinations ” for further information).

Prior to the Intralot

Transaction , the Company accounted for its shares as an equity method investment under the fair value option.

The Company also has other investments in unconsolidated subsidiaries, which are accounted for using equity method

The Company records its share of net income or loss and changes in fair value for equity method investments

accounted for under the fair value option within “ Other non-operating income (expense), net ” in the consolidated statements of

Refer to Note 4 “ Consolidated Financial Information ” for further information.

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.

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.

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

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.

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 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.

Related Parties

The Company evaluates related parties pursuant to ASC 850, Related Party Disclosures (“ASC 850”).

Related parties include

VIE entities, shareholders of significant subsidiaries, key management personnel of the Company, and equity method

investments held by the Company.

Refer to Note 3 “ Related Party Transactions ” for further information.

Non-controlling interest

As described in Note 1 , “ General Information ,” on October 8, 2025 the Company acquired a controlling financial interest in

In connection with the transaction, Bally’s International Interactive, a wholly owned subsidiary, was contributed to

As a result, the Company consolidates Intralot and its subsidiaries, including Bally’s International Interactive, and the

equity interests in Intralot held by third parties are reflected as a noncontrolling interest in the Company’s Consolidated

Statements of Stockholders’ Equity.

The non-controlling interest recognized at the Intralot Closing Date represents (i) the fair

value of the equity interests in Intralot held by third parties, which is based on Intralot’s closing share price as of that date and

(ii) the carrying value of the noncontrolling interests attributable to Bally’s International Interactive.

As of December 31, 2025

(Successor) , third parties held approximately 41.2 % of the outstanding equity interests in Intralot.

Net loss attributable to non-

controlling interest was $ 9.2 million for the period from February 8, 2025 to December 31, 2025 (Successor).

During the first quarter of 2025, Bally’s Chicago, Inc., a consolidated subsidiary of the Company, successfully completed a

private placement, whereby shares of Class A-1, A-2, A-3 and A-4 were issued to third parties for total consideration of $ 12.4

million , net of $ 0.8 million of issuance costs.

Additionally, on August 14, 2025 (Successor), Bally’s Chicago, Inc.

completed its

public offering and concurrent private placement, whereby additional shares of Class A-1, A-2, A-3 and A-4 were issued for

total consideration of $ 5.8 million , net of $ 0.3 million of issuance costs.

As of December 31, 2025 (Successor), the Company’s

non-controlling interest in Bally’s Chicago, Inc.

Net loss attributable to non-controlling interest was $ 6.3 million for

the period from February 8, 2025 to December 31, 2025 period from February 8, 2025 to December 31, 2025 (Successor).

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.

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.

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

Restricted cash includes player deposits, payment service provider deposits, cash collateral in connection with amounts

previously due to the Chicago Tribune, 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.

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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Receivable, Net

1 unchanged sentence

(in thousands)

Accounts due from Rhode Island and Delaware (1)

$ 14,135 $ 13,028

Gaming receivables 20,700 26,127

Amounts due from GLPI (1)

Non-gaming receivables

Gaming receivables

Accounts due from Rhode Island and Delaware (2)

Accounts receivable

2 unchanged sentences

__________________________________

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

(1) Represents amounts due from GLPI related to the development of the Company’s future permanent casino resort in Chicago .

Refer to Note 15 “ Leases ”

for further information.

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

Bally’s Dover from the 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:

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 (in thousands):

Allowance for credit losses as of December 31, 2023 (Predecessor)

Charged to expense

Allowance for credit losses as of December 31, 2024 (Predecessor)

Charged to expense

Allowance for credit losses as of February 7, 2025 (Predecessor)

Allowance for credit losses as of February 8, 2025 (Successor)

Charged to expense

Allowance for credit losses as of December 31, 2025 (Successor)

Inventory is stated at the lower of cost or net realizable value on either a first-in, first-out or weighted average cost basis and

consists primarily of food, beverage, promotional items, other supplies and technology hardware and terminals used in the

Company’s consumer lottery business.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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 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:

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:

Land improvements

Building and improvements

Equipment 2 - 10

Furniture and fixtures

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.

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.

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

If substantially all of the construction activities of a project are suspended, capitalization of interest will cease until

such activities are resumed.

The Company recorded capitalized interest of $ 4.8 million , $ 0.8 million , and $ 8.0 million during

the period from February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025

(Predecessor), and the year ended December 31, 2024 (Predecessor), respectively .

Refer to Note 15 “ Leases ” for further

information on capitalized interest in connection with the Company’s Bally’s Chicago permanent casino development.

The Company determines if a contract is or contains a lease at the contract inception date or the date on 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 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.

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.

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 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.

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

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

The Company’s intangible assets primarily consist of customer relationships, developed technology, internally developed

software, gaming licenses, backlog and trade names.

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.

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

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.

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 business combinations.

Developed technology is considered to be a

finite-lived intangible asset, which are amortized over their estimated useful lives.

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.

Gaming Licenses - Gaming licenses obtained through business combinations are generally recorded at their fair values through

purchase accounting using the Greenfield Method under the income approach.

Gaming licenses accounted for as asset

acquisitions are valued at cost.

The Company considers its gaming licenses to be finite lived intangibles assets, amortized over

the individual license’s estimated useful life, which is determined by various factors such as the regulatory life of the license,

costs to renew, and whether the real property assets used to operate the license are subject to a long term le ase.

Trade Names - Certain trade names are classified as finite-lived based on expectations of future use and are amortized over their

estimated useful lives.

The Company also has certain trade names, which are considered to be indefinite lived based on future

expectations of continuing to brand its corporate name and certain properties and online gaming operations 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 exceed its fair value.

Backlog - Represents the estimated fair value of contracted customer orders and committed future sales that existed but were

not yet fulfilled as of the acquisition date.

The valuation includes only revenues that are contractually agreed to and specifically

identifiable at the acquisition date and excludes assumptions about renewals, future sales beyond the contracted period, or

expected synergies.

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

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.

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 or asset group 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.

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.

Interest Expense, Net

Interest expense, net is comprised of interest costs for the Company’s debt, amortization of debt issuance costs, debt discounts

and fair value adjustments, interest costs associated with the Company’s deferred payable arrangements, net of interest income

earned on the note receivable (refer to Note 3 “ Related Party Transactions ”), 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 year ended December 31, 2023 (Predecessor).

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.

In order to execute 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

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 period from February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7,

2025 (Predecessor) and the year ended 2024 (Predecessor), the Company borrowed $ 272.1 million , $ 79.6 million and $ 239.1

million , respectively, under these deferred payable arrangements and repaid $ 313.6 million , $ 68.5 million and $ 165.4 million ,

respectively.

For the period from February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to

February 7, 2025 (Predecessor) and the years ended 2024 (Predecessor), the Company incurred $ 8.7 million , 0.5 million , and

$ 6.4 million of interest expense, respectively, under these arrangements.

Amounts outstanding under these deferred payable

arrangements were $ 47.0 million and 72.8 million as of December 31, 2025 (Successor) and December 31, 2024 (Predecessor),

respectively, and are included in “ Accrued and other current liabilities ” on the consolidated balance sheets.

All outstanding

deferred payable arrangements as of December 31, 2025 (Successor) were held by Bally’s International Interactive.

Debt Issuance Costs, Debt Discounts and Fair Value Adjustments

Debt issuance costs and debt discounts incurred by the Company in connection with obtaining and amending financing, and fair

value adjustments in connection with business combinations 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, debt discounts and fair value adjustments are amortized using the effective interest method.

Amortization of debt

issuance costs, debt discounts and fair value adjustments included in “Interest expense” in the consolidated statements of

operations was $ 77.3 million , $ 1.0 million , and $ 11.7 million for the period from February 8, 2025 to December 31, 2025

(Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor), and the year ended December 31, 2024

(Predecessor), 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.

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 $ 32.8 million and $ 23.9 million as of December 31, 2025 (Successor) and 2024

(Predecessor), respectively.

BALLY’S CORPORATION

2 unchanged sentences

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.

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

Total employer contribution expense

attributable to defined contribution plans was $ 5.1 million , $ 1.0 million , and $ 10.3 million for the period from February 8, 2025

to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor), and the year ended

December 31, 2024 (Predecessor), respectively.

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.

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.

The Company accounts for its share-based compensation in accordance with ASC 718, Compensation - Stock Compensation

The Company has one share-based employee compensation plan, which is described more fully in Note 16

“ 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.

are recognized as reductions to share-based compensation when they occur.

Strategic Partnership - Sinclair Broadcast Group

In 2020, the Company and Sinclair Broadcast Group, Inc.

(“Sinclair”) entered into the Framework Agreement, providing for a

long-term strategic relationship between Sinclair and the Company.

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 an exercise 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 benefits 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, were treated as an adjustment to the intangible

In connection with the Queen merger, as of February 7, 2025, all outstanding Performance Warrants became immediately

exercisable at a price of $ 0.01 per share and the Options were returned to the Company in exchange for 384,536 penny

The Performance Warrants were reclassified from liability to equity as of February 7, 2025.

Refer to Note 12 “ Fair

Value Measurements ” for more information.

Bally’s Chicago Service Agreements

The Company is party to various agreements relating to the operations of certain services at the Company’s Bally’s Chicago

Casino facilities, including a long-term management agreement with a provider to operate and manage certain hospitality

services at its permanent casino and resort upon opening.

The Company expects to receive $ 50.0 million towards the

construction and build out of certain casino facilities related to such services, payable in installments over 2 years , subject to

certain conditions precedent (the “Bally’s Chicago Construction Investments”).

Under the aforementioned hospitality services

agreement, the Company received $ 4.4 million of Bally’s Chicago Construction Investments in the third quarter of 2025.

Bally’s Chicago Construction Investments are recorded in “Other long-term liabilities” and will be amortized as a reduction of

Non-gaming operating costs and expenses over the contract term upon commencement of operations at the permanent casino

Upon commencement of the management services, the Company will pay a management fee and a share of net

receipts to the providers, as applicable, which will be recognized as Non-gaming operating costs and expenses as incurred.

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 six principal sources:

gaming (which includes retail gaming,

online gaming, consumer lottery, sports betting and racing), hotel , food and beverage , licensing , technology services and retail,

entertainment and other .

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

2 unchanged sentences

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.

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.

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.

Advertising expenses, including production and agency fees of

campaigns, for the period from February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to

February 7, 2025 (Pre decessor) and the year ended December 31, 2024 (Predecessor), was $ 12.9 million , $ 0.9 million , and

$ 12.2 million , respectively.

The above advertising expenses 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 $ 121.1 million , $ 12.6 million , and $ 170.1 million during the period from

February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the

year ended December 31, 2024 (Predecessor), respectively.

These costs are included within Gaming expenses in the

consolidated statements of operations.

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.

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.

allowance is required when it is “more likely than not” that all or a portion of the deferred taxes will not be realized.

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).

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, c ontingently issuable warrants and RSUs, RSAs and

PSU s for which no future service is required as a condition to the delivery of the underlying common stock (collectively, basic

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.

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.

Comprehensive Income (Loss)

Comprehensive income (loss) includes changes in equity that result from transactions and economic events from non-owner

Comprehensive income (loss) consists of net income (loss), changes in defined benefit pension plan, net of tax, foreign

currency translation adjustments, net of tax and unrealized gains (losses) relating to cash flow and net investment hedges, net of

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.

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.

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.

The Company accounts for its acquisitions in accordance with ASC 805, Business Co mbinations (“ASC 805”).

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

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

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.

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:

Observable quoted prices (unadjusted) for identical assets or liabilities in active markets.

Inputs are observable for the asset or liability either directly or through corroboration with observable market data.

Inputs are observable for the asset or liability either directly or through corroboration with observable

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.

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.

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 qualified as net investment hedges unde r ASC 815

through the date of the Intralot transaction, 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 11 “ 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

11 “ Derivative Instruments ” for further information.

BALLY’S CORPORATION

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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.

Disposition of Carved-Out Business

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 Bally's Intralot B2C reportable segment (the “Carved-Out Business”) to a company

(the “Buyer”) formed by members of management of the Carved-Out Business for total consideration of $ 32.9 million , which

consisted of a € 30 million seven -year term note, subject to applicable interest.

The disposition includes the Company’s interest

in various contracts with Breckenridge Curacao B.V.

(“Breckenridge”), which was previously determined to be a VIE and 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 de-designating the hedge as of the disposal date.

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 (Predecessor).

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.

Additionally in connection with the disposition, the Company acquired penny warrants that represent a 19.99 % fully diluted

equity interest in the Carved-Out Business, for approximately $ 1.9 million , 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 .

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 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 $ 19.3 million , $ 3.7 million , and $ 6.9 million during the period from

February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor), and

the year ended December 31, 2024 (Predecessor), respectively.

During the period from February 8, 2025 to December 31, 2025 , the Company recorded a provision for credit loss of $ 17.1

million , reducing the net carrying value of the seven -year term note to $ 17.1 million , included in Other assets within the

consolidated balance sheets, as of December 31, 2025 (Successor).

The carrying value of the loan receivable was $ 31.2 million

as of December 31, 2024 (Predecessor) recorded in Other Assets.

The Company r ecorded interest income on the seven -year term note of $ 2.7 million , $ 0.3 million and $ 0.5 million included

within Interest expense, net in the consolidated statements of operations during the period from February 8, 2025 to December

31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the year ended December 31,

2024 (Predecessor), respectively.

Receivables from this equity method investee are included in Accounts receivable, net and

were $ 6.1 million and $ 1.1 million as of December 31, 2025 (Successor) and December 31, 2024 (Predecessor), respectively.

Variable Interest Entities

Management has concluded that the Trust established in connection with the aforementioned disposal of the Carved-Out

Business, is a VIE that will be consolidated based on the applicable criterion.

Additionally, in connection with the acquisition of

a controlling interest in Intralot during the fourth quarter of 2025, the Company evaluated the variable interests held by Intralot

and concluded that DC09 LLC and Royal Highgate Ltd.

are VIEs for which the Company is the primary beneficiary.

result, these entities are consolidated in the Company’s consolidat ed financial statements.

As of December 31, 2025 (Successor) and 2024 (Predecessor), consolidated VIEs had total assets of $ 60.8 million and

$ 263.9 million , respectively, and total liabilities of $ 18.6 million and $ 27.9 million , respectively.

Consolidated VIEs had total

revenues of $ 19.3 million , $ 3.7 million and $ 169.8 million for the period from February 8, 2025 to December 31, 2025

(Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the year ended December 31, 2024

(Predecessor), respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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,

Amounts included in General and administrative were as follows:

(in thousands)

1 unchanged sentence

Acquisition and integration

24,729 49,292 49,480

Restructuring charges, net

17,921 31,014 —

Loss on disposal of business (1)

Merger costs (2)

Diamond Sports Group non-cash settlement (3)

1,114 144,883 —

Provision for credit loss on long-term note receivable (3)

Loss on disposal of business (3)

Total general and administrative

__________________________________

(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.

(1) For the year ended December 31, 2024 (Predecessor), includes $ 20.0 million of employee-related severance costs within the Company’s Casinos &

Resorts reportable segment related to the closure of its Tropicana Las Vegas casino on April 4, 2024.

There was no restructuring liability as of

December 31, 2025 (Successor) and December 31, 2024 (Predecessor) on the consolidated balance sheets.

(2) Refer to Note 1 “ General Information ” for further information.

(3) Refer to Note 3 “ Related Party Transactions ” for further information.

Other Non-Operating Income (Expense)

Amounts included in Other non-operating income (expense), net were as follows:

(in thousands)

Gain on fair value of fair value option assets

Change in value of contingent consideration

Net income (loss) from equity method investments

Change in value of performance warrants

Foreign exchange (loss) gain

Loss on extinguishment of debt

Total other non-operating income (expense), net

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,

Amounts included in Interest expense, net were as follows:

(in thousands)

Interest income

$ 20,718 $ 6,099 $ 616

Interest expense

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

Total interest expense, net

$ ( 365,233 )

$ ( 289,629 )

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

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

RECEN TLY 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.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures .

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 adopted ASU

2023-09 prospectively as of December 31, 2025.

Refer to Note 18 “ Income Taxes ” 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.

In October 2023, the FASB issued ASU 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):

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.

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.

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.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810):

the Accounting Acquirer in the Acquisition of a Variable Interest Entity.

The amendments in this update revise the requirements

for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal

acquiree is a VIE that meets the definition of a business.

The amendments require that an entity consider the same factors that

are currently required for determining which entity is the accounting acquirer in other acquisition transactions.

The amendments

in this update will be effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those

annual reporting periods.

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

statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326) .

The amendments clarify

guidance related to Topic 326 for current accounts receivable and current contract assets arising from transactions accounted for

under Topic 606, Revenue from Contracts with Customers, and allowing for a practical expedient that assumes that current

conditions as of the balance sheet do not change for the remaining life of the asset.

The amendments are effective for annual

reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with

early adoption permitted.

The Company is evaluating the impact of the adoption of Update 2025-05 to the consolidated

financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic

The amendments in this update are intended to simplify the capitalization guidance by removing all references to

software development project stages so that the guidance is neutral to different software development methods.

amendments in this update are effective for annual reporting periods after December 15, 2027.

The Company is currently

evaluating the impact that this guidance will have on its financial statements and related disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815):

Improvements to Hedge Accounting.

The amendments in this update address stakeholder concerns and intend to more closely align hedge accounting with the

economics of an entity’s risk management activities.

The amendments are effective for fiscal years beginning after December

15, 2026, with early adoption permitted.

The Company is currently evaluating the impact that this guidance will have on its

financial statements and related disclosures.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

amendments in this update are intended to improve the clarity and navigability of interim reporting guidance and specify when

The ASU addresses the form and content of interim financial statements, adds a consolidated list of required interim

disclosures from other Codification topics, and establishes a principle requiring disclosure of events occurring after the end of

the last annual reporting period that have a material impact on the entity.

The amendments are effective for interim reporting

periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is

currently evaluating the impact that this guidance will have on its financial statements and related disclosures.

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.

The Company recognizes revenue in accordance with 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

The Company generates revenue from six principal sources:

(1) gaming (which includes retail gaming, online gaming,

consumer lottery, sports betting and racing), (2) hotel , (3) food and beverage , (4) licensing , (5) technology services and (6)

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.

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.

For certain state-authorized sports betting contracts, the

Company operates and manages wagering services as an agent of the applicable government authority.

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

Each wagering contract contains a single performance obligation.

Consumer lottery revenue is earned from jurisdictions where the Company has a license from the applicable government

authority to operate games to provide game management services.

Each consumer lottery contract contains a single

performance obligation to stand ready to operate games and lotteries in the specific jurisdiction.

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.

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.

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

For certain consumer lottery contracts, payments to the applicable government authority for the license to operate are not

considered consideration payable to a customer under ASC 606.

Accordingly, such payments are recognized as operating

expenses and are not presented as a reduction of revenue.

Revenue Recognition

2 unchanged sentences

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

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.

Consumer lottery revenue is recognized as tickets are sold and the variability is resolved.

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.

Additionally, certain operations within the

Company’s B2C reportable segment act as an agent in providing virtual sports betting services on behalf of the applicable

government authority.

The Company collects wagers from players, remits net proceeds to the applicable government authority

after payment of prizes, and retains a commission.

As the Company does not control the underlying wagering activity, revenue

is recognized on a net basis in an amount equal to the commission to which the Company is entitled.

Revenue is recognized

over time as wagering activity occurs and the outcome of the underlying bets is resolved.

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.

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

Technology services contracts involve the Company using its software to provide services related to customers’ lottery, VLT,

and sports betting operations.

The Company will also provide related hardware and support services.

Technology services

contracts can contain multiple performance obligations, including a performance obligation to stand ready to provide access to

the software throughout the contract term and distinct performance obligations for sales of related hardware and

implementation, customization, maintenance, and technical support services.

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.

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.

The transaction price for technology services contracts is primarily variable and is generally based on either (i) a monthly fee

per enrolled machine, (ii) a percentage of gross revenue, or (iii) a percentage of net drop, which represents total amounts

wagered less winnings and payouts to players.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

1 unchanged sentence

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Technology services revenues from the use of the Company’s software to

provide services to customers are recognized over time as the variability is resolved.

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 Bally's Intralot B2B 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.

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

Gaming $ 1,008,361 $ 893,756 $ 149,551 $ 2,051,668

Hotel 148,693 — — 148,693

Period from February 8, 2025 to

December 31, 2025 (Successor)

Food and beverage

Licensing — 6,861 — 6,861

Technology Services

Retail, entertainment and other

1 unchanged sentence

Total revenue

Gaming $ 954,725 $ 952,921 $ 84,395 $ 1,992,041

Hotel 200,650 — — 200,650

Period from January 1, 2025 to

February 7, 2025 (Predecessor)

Food and beverage

2 unchanged sentences

Total revenue

Gaming $ 907,431 $ 899,934 $ 38,759 $ 1,846,124

Hotel 153,750 — — 153,750

Year ended December 31, 2024

(Predecessor)

Food and beverage

2 unchanged sentences

Total revenue

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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’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 $ 57.5

million and $ 41.3 million as of December 31, 2025 (Successor) and 2024 (Predecessor), 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.

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Loyalty programs $ 12,167 $ 16,803

Advanced deposits from customers 26,141 29,052

Liabilities related to contracts with customers as of December 31, 2025 (Successor) and 2024 (Predecessor) were as follows:

Unpaid wagers

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.

Advanced deposits from customers

Loyalty programs

The Company recognized $ 21.0 million , $ 2.2 million , and $ 30.5 million of revenue related to loyalty program redemptions for

the period from February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025

(Predecessor) and the year ended December 31, 2024 (Predecessor), respectively.

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.

Intralot Transaction

As described in Note 1 “ General Information ”, the Company completed the Intralot Transaction on October 8, 2025, with the

Company obtaining a controlling financial interest in Intralot and retaining control of Bally’s International Interactive.

transaction with Intralot was accounted for as a business combination in accordance with ASC 805, with the Company as the

accounting acquirer.

Intralot is a global gaming technology and services company that provides integrated lottery systems, sports betting solutions

and interactive gaming platforms to state-licensed gaming operators worldwide.

The Intralot Transaction expands the

Company’s international gaming and technology footprint, enhances its digital and sports betting capabilities, and strengthens

its position as a vertically integrated gaming and entertainment operator, which aligns with the Company’s broader strategic

The preliminary fair value of the transaction consideration for the Company’s 57.9 % interest in Intralot as of the Closing Date

was approximately $ 1.6 billion , which represents the fair value of Intralot shares issued to the Company plus the Company’s

pre-existing investment in Intralot of approximately $ 280.6 million as of the Intralot Closing Date.

As disclosed in Note 2,

“ Summary of Significant Accounting Policies ,” the Company’s previous investment in Intralot was accounted for as an equity

method investment under the fair value option and was adjusted to fair value immediately prior to closing of the transaction.

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

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)

Other assets 2,000 766

The preliminary allocation of the purchase price is as follows:

As of October 8, 2025

(in thousands)

Preliminary as of

December 31, 2025

Cash and cash equivalents

Restricted cash

Other current assets

Property and equipment

Right of use assets

Intangible assets

Total current liabilities

Lease liabilities

Long-term debt

( 1,982,214 )

Other long-term liabilities

Total purchase price $ 113,592 $ 148,216

Non-controlling interest

( 1,063,664 )

(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

Total current assets $ 8,862

Property and equipment, net 50

Intangible assets, net (1)

Goodwill 18,422

Total fair value of net assets acquired

The purchase consideration has been allocated to the tangible and identifiable intangible assets acquired and liabilities assumed

based upon their preliminary estimated fair values as of the acquisition date, with the excess of the purchase consideration over

the aggregate net fair values recorded as goodwill, which is not deductible for tax purposes.

Qualitative factors that contribute

to the recognition of goodwill include an organized workforce and expected synergies from future cost savings and revenue

driven by the integration of Bally’s intellectual property into Intralot’s product offerings as well as cross selling product

offerings of Intralot and Bally’s International Interactive into existing and new markets.

Goodwill has been assigned to the

segments expected to benefit from the transaction on a relative fair value basis, which includes $ 977.3 million and $ 785.9

million to the Bally's Intralot B2B and Bally's Intralot B2C segments, respectively.

The Non-controlling interest was initially

measured at its fair value based on the trading price of Intralot stock on the date of closing.

Certain adjustments have been made

to Intralot’s historical carrying values to conform accounting policies with the Company, including IFRS to US GAAP

conversion adjustments, with any such adjustments recorded to equity.

The Company recorded intangible assets based on estimates of fair value which consisted of the following:

Valuation Approach

Estimated Useful

Life (in years)

Estimated Fair

Developed technology

Relief from royalty method

Intralot trade name

Relief from royalty method

Customer relationships

Multi-period excess earnings method

Total fair value of intangible assets

The valuation of intangible assets was determined using an income approach methodology including the multi-period excess

earnings m ethod and the relief from royalty method.

Level 3 inputs used in estimating future cash flows included terminal

growth rates of 3 % , a royalty rate of 1.5 % for the Intralot trade name and 15.0 % for other acquired intangibles, discount rates

between 7.5 % and 8.5 % , and operating cash flows .

The projected future cash flows are discounted to present value using an

appropriate discount rate .

As of December 31, 2025 (Successor), the Company is in the process of completing its valuation of

tangible and intangible assets and the allocation of the purchase price to net assets, including the allocation of goodwill to

reporting units, which will be completed once the valuation process has been finalized.

The Company incurred $ 40.5 million of transaction-related expenses for the period from February 8, 2025 to December 31,

2025 (Successor) in connection with the transaction primarily related to legal and professional fees, which have been included

within “ General and administrative ” in the consolidate d statements of operations.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Since the Acquisition Date, revenue and net loss of Intralot attributable to Bally’s of $ 98.2 million and $ 37.5 million ,

respectively, have been included within the accompanying consolidated statement of income for the period from February 8,

2025 to December 31, 2025 (Successor).

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information is presented to illustrate the estimated effects of the transaction as if

the transaction had occurred on January 1, 2024:

Year Ended December 31,

(in thousands)

Pro forma revenue

Pro forma net loss

$ ( 720,051 )

$ ( 587,595 )

The pro forma amounts include the historical operating results of the Company and Intralot prior to the acquisition, with

adjustments directly attributable to the transaction including amortization expense of intangible assets, debt amortization

expense and interest expenses.

The unaudited pro forma financial information is not necessarily indicative of the results of

operations that actually would have been achieved had the transaction been consummated as of the dates indicated, nor is it

indicative of any future results.

In addition, the unaudited pro forma financial information does not reflect the expected

realization of any synergies or cost savings associated with the transaction.

Merger with Queen Casino & Entertainment, Inc.

The Merger between the Company and Queen was accounted for as a transaction between entities under common control in

accordance with ASC 805, in which the accounting acquirer (Parent and its affiliates) obtained control of the Company.

described in Note 2 , “ Summary of Significant Accounting Policies ”, the Company has elected to push down its Parent’s basis in

its net assets into its financial statements, and as a result, the net assets of the Predecessor were measured and recognized at

their fair values as of the acquisition date and were combined with those of Queen at Queen’s historical carrying amounts and

are presented on a combined basis.

The following disclosures relate to the Company’s election to apply push down and show

the effect of the change in control.

The fair value of the Merger consideration was $ 955.6 million , which represents 52,364,192 total shares outstanding prior to the

Merger multiplied by the Merger value of $ 18.25 per share.

Immediately following the transaction, the Company repurchased

22,804,384 shares at a price of 18.25 for a total repurchase price of $ 416.2 million .

The preliminary and final allocation of the purchase price is as follows:

As of February 7, 2025

(in thousands)

Preliminary as of

February 7, 2025

December 31, 2025

Cash and cash equivalents

Restricted cash

Other current assets

Property and equipment

Right of use assets

Intangible assets

Total current liabilities

Total purchase price $ 50,434

Lease liabilities

( 1,823,153 )

(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.

( 1,840,368 )

Long-term debt

( 2,914,688 )

Other long-term liabilities

Net assets acquired

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.

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.

The purchase consideration has been allocated to the tangible and identifiable intangible assets and liabilities based upon their

estimated fair values as of the acquisition date, with the excess of the purchase consideration over the aggregate net fair values

recorded as goodwill, which is not deductible for tax purposes.

Accounts receivable, other assets, current liabilities and

inventories were stated at their historical carrying value, which approximates fair value given the short-term nature of these

assets and liabilities.

The estimate of fair value for property and equipment and owned real property was based on an

assessment of the assets' condition as well as an evaluation of the current market value of such assets.

The fair value of

leasehold interests were estimated based on evaluating contractual rent payments relative to market rent giving consideration to

the Company’s capitalization rates and rent coverage ratios, under the income method or by estimating the fee simple value and

estimated rate of return, depending on the nature of the underlying leasehold interest.

In connection with remeasuring the

Company’s lease liabilities, unfavorable off-market components of $ 130.8 million were recognized as a decrease to the

Company’s right of use assets, and will be amortized as a reduction of lease expense on a straight line basis over the remaining

The Company recorded intangible assets based on estimates of fair value which consisted of the following:

Valuation Approach

Gaming licenses

Greenfield/Replacement Cost method

Customer relationships

Multi-Period Excess Earnings/

Replacement Cost method

Developed technology

Relief from royalty method

Intellectual property license

Relief from royalty method

Other amortizing intangibles

Various methods

Indefinite lived trade name

Relief from royalty method

Total fair value of intangible assets

The valuation of intangible assets was determined using income approach methodologies including the Greenfield method,

multi-period excess earnings method, relief from royalty method, and the replacement cost method.

Level 3 inputs used in

estimating future cash flows included terminal growth rates of 3 % , royalty rates between 2 % and 19 % , discount rates between

11 % and 15 % , operating cash flows, estimated construction costs, and pre-opening expenses, among others.

The projected

future cash flows are discounted to present value using an appropriate discount rate.

As of December 31, 2025 (Successor), the

Company has finalized its valuation of tangible and intangible assets and the allocation of the purchase price to the assets

acquired and liabilities assumed.

The Company incurred $ 22.7 million , $ 11.2 million and $ 14.8 million of transaction-related expenses for the period from

February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor), and

the year ended December 31, 2024 (Predecessor), respectively.

Transaction-related expenses were incurred in connection with

the Merger and are primarily related to legal and professional fees, which have been included within “ General and

administrative ” in the consolidated statements of operations.

BALLY’S CORPORATION

1 unchanged sentence

PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

As of December 31, 2025 (Successor) and 2024 (Predecessor), prepaid expenses and other assets was comprised of the

(in thousands)

1 unchanged sentence

Taxes and licenses

18,988 19,973

Short term notes receivable

Prepaid marketing

Purse funds 7,412 6,404

Short term derivative assets 5,359 9,530

Prepaid insurance

Due from payment service providers — 12,662

Other 7,936 9,294

Short term derivative assets

Short term notes receivable

Total prepaid expenses and other current assets

PROPERTY AND EQUIPMENT

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

As of December 31, 2025 (Successor) and 2024 (Predecessor), property and equipment, net was comprised of the following:

(in thousands)

Land and improvements

$ 49,553 $ 401,208

Building and improvements

Equipment 280,946 264,398

Furniture and fixtures

Construction in process (1)

Total property, plant and equipment 914,600 1,481,233

Total property and equipment

Accumulated depreciation

( 283,898 ) ( 306,345 )

Property and equipment, net

__________________________________

(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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Refer to Note 15 “ Leases ” for further information on the Company’s reclassification of its construction in process related to the construction of its

permanent casino resort in Chicago in connection with the signing of the Chicago MLA.

Depreciation expense relating to property and equipment for the period from February 8, 2025 to December 31, 2025

(Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the year ended 2024 (Predecessor) was

$ 73.6 million , $ 7.6 million , and $ 158.0 million , respectively.

GOODWILL AND INTANGIBLE ASSETS

2025 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.

A s of October 1, 2025 ( Successor), 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 & Resorts operating segment is determined

to be its own reporting unit and asset group.

The reporting unit for the North America Interactive operating segment is the

operating segment.

The reporting units for the Bally's Intralot B2C and Bally's Intralot B2B operating segments are grouped at

the geographical level .

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company performed a quantitative test of a reporting unit and a long lived asset group within its Bally's Intralot B2B

operating segment due to declining projected cash flows in its licensing business.

The carrying value of the reporting unit and

asset group exceeded their respective fair values, resulting in an impairment charge of $ 181.6 million .

The goodwill within the

reporting unit was impaired by $ 72.5 million , and the fair value was determined through a discounted cash flow approach.

valuation utilized level 3 inputs including projected cash flows, a market-based weighted average cost of capital (“WACC”) of

25 % and a long term growth rate of 2 % .

The long lived assets within the group consisted of a licensing asset, which was

impaired by $ 109.1 million .

The fair value of the asset group was determined using a relief from royalty method, which is a

discounted cash flow approach and utilized level three inputs including projected cash flows, a royalty rate of 19 % , a WACC of

23 % , and the C om pany’s estimates for probability of continuing use of the licensing asset.

For four indefinite lived gaming licenses in the Casinos & Resorts segment, the Company determined the useful life was no

longer indefinite, and the useful life was updated to be finite lived.

In accordance with ASC 350, upon re-assessing the assets

as finite lived, an impairment test was performed.

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 of 2 % , estimated construction costs, and pre-

opening expenses and are discounted at a WACC of 10 % for four licenses.

The fair values of the four gaming licenses exceeded

their respective carrying values and no impairment was recorded.

For all other reporting units, indefinite lived intangible assets and long lived asset groups, 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.

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, 2025 (Successor).

If future results vary significantly from current estimates and related projections, the Company

may be required to record impairment charges.

2025 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.

During the fourth quarter of 2025, the UK announced an increase of the remote gaming duty tax from 21 % to 40 % , effective in

As a result of this announcement, the Company identified a triggering event to assess impairment at a reporting unit

within its Bally's Intralot B2C operating segment and performed a quantitative test for impairment.

The estimated fair value of

the reporting unit was determined through a combination of a discounted cash flow model and market-based approach, which

utilized inputs including future cash flow projections for the reporting units, terminal growth rates of 3 % , and discount rates of

The result of this assessment did not result in any impairment as fair value exceeded carrying value.

If future results

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

2024 Annual Impairment Assessment

As of October 1, 2024 (Predecessor), 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 & Resorts operating segment is

determined to be its own reporting unit and asset group.

The reporting units for the North America Interactive and Bally's

Intralot B2C operating segments are the operating segments.

The Company performed a quantitative test of goodwill for its Bally's Intralot B2C reporting unit and one reporting unit within

the Casinos & 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.

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.

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.

For the North America Interactive reporting unit and all other reporting units within the Casinos & Resorts segment with

goodwill, the Company performed a qualitative analysis for the annual assessment of goodwill (commonly referred to as “Step

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 (Predecessor).

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 WACC, which was between 10 % and 11 % for three licenses.

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 (Predecessor).

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 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.

During the fourth quarter of 2024 (Predecessor), the Company divested a component within the Bally's Intralot B2B operating

segment (refer to Note 3 “ Related Party Transactions ” 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

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

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 reporting unit exceeded its carrying value and thus no impairment was recorded.

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

As a result of this divestiture, the Company identified a triggering event related to a long lived asset group within its Bally's

Intralot B2B 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.

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 Bally's Intralot B2B 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.

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

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

T he change in carrying value of goodwill by reportable segment for the period from February 8, 2025 to December 31, 2025

(Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the year ended December 31, 2024

(Predecessor) is as follows:

(in thousands)

Resorts (3)(4)

Goodwill as of December 31,

$ 209,257 $ 1,497,205 $ 39,740 $ 1,746,202

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

2023 (Predecessor) (1)(3)

Goodwill from current year

business combinations

Effect of foreign exchange

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

Purchase accounting

adjustments on prior year

business combinations

Current year divestiture

Reporting unit re-allocation

Impairment charges

Goodwill as of December 31,

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

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

2024 (Predecessor) (1)(2)(4)

Effect of foreign exchange

Goodwill as of February 7, 2025

(Predecessor) (1)(2)(4)

Goodwill as of February 8, 2025

Goodwill from current period

business combinations

Current year measurement

period adjustments

Goodwill measurement

period segment re-allocation

Impairment charges

Effect of foreign exchange

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

Current year divestiture — ( 20,657 ) — ( 20,657 )

Goodwill as of December 31,

$ 313,285 $ 1,451,273 $ 35,386 $ 1,799,944

2025 (Successor) (5)(6)

__________________________________

(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.

(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 $ 71.6 million for Bally's Intralot B2B .

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

(4) As of February 7, 2025 (Predecessor) and December 31, 2024 (Predecessor), amounts shown include $ 59.2 million of goodwill associated with reporting

units with negative carrying value.

(5) As of December 31, 2025 (Successor), amounts shown include $ 115.8 million of goodwill associated with reporting units with negative carrying value.

(6) Amounts are shown net of accumulated goodwill impairment charges of $ 73.3 million for Bally's Intralot B2B .

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

The change in intangible assets, net for the period from February 8, 2025 to December 31, 2025 (Successor), the period from

January 1, 2025 to February 7, 2025 (Predecessor) and the year ended December 31, 2024 (Predecessor) is as follows (in

Intangible assets, net as of December 31, 2023 (Predecessor)

Derecognition of Commercial rights - Sinclair

Effect of foreign exchange

Impairment charges

Internally developed software 47,091

Capitalized software

Other intangibles acquired

Accumulated amortization ( 231,713 )

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

Intangible assets disposed

Amortization of intangible assets

Intangible assets, net as of December 31, 2024 (Predecessor)

Effect of foreign exchange

Capitalized software

Amortization of intangible assets

Intangible assets, net as of February 7, 2025 (Predecessor)

Intangible assets, net as of February 8, 2025 (Successor)

Additions from current year business combinations

Measurement period adjustments

Impairment charges

Derecognition of Commercial rights - Sinclair

Internally developed software 48,392

Additions in current period (1)

Capitalized software

Effect of foreign exchange

Other intangibles acquired 3,059

Intangible assets disposed

Accumulated amortization ( 221,533 )

Intangible assets, net as of December 31, 2024 $ 1,307,343

Amortization of intangible assets

Intangible assets, net as of December 31, 2025 (Successor)

__________________________________

(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.

(1) Amount includes $ 500.0 million acquisition of New York gaming license .

Refer to Note 19 “ Commitments and Contingencies ” for further information.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

remaining life

(in years) December 31, 2024

(in thousands, except years) Gross Carrying Amount Accumulated

Amortization Net

December 31, 2025 (Successor)

(in thousands, except years)

Gross Carrying

Amortizable intangible assets:

Gaming licenses

Customer relationships

Developed technology

Licensing asset

Internally developed software

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

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

Total intangible assets, net

$ ( 214,527 )

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

remaining life

(in years) December 31, 2023

(in thousands, except years) Gross

amount Accumulated

amortization Net

December 31, 2024 (Predecessor)

(in thousands, except years)

Gross Carrying

Amortizable intangible assets:

Customer relationships

Commercial rights - Sinclair (1)

$ ( 272,333 )

2 unchanged sentences

Gaming licenses

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

Hard Rock license

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

Total amortizable intangible assets

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

Gaming licenses

Total unamortizable intangible assets

1 unchanged sentence

$ ( 414,556 )

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

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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Amortization of intangible assets was approximately $ 219.5 million , $ 14.8 million , and $ 221.5 million for the period from

February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the

year ended December 31, 2024 (Predecessor), respectively.

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

business combinations.

Refer to Note 2 “ Summary of Significant Accounting Policies ” 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,

2025 (Successor):

(in thousands)

2025 $ 188,437

Thereafter 40,886

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 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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2024 (Predecessor), 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

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

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.

Additionally, the Company is a party to 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 14 “ 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 Octo ber 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.

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.

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 (Predecessor), as a result of the sale of the Carved-Out Business, the

Company de-designated 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 de-designation, 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 3 “ Related Party Transactions ,”

Note 12 “ Fair Value Measurements ” and Note 17 “ Stockholders’ Equity ” for further information.

During the fourth quarter of 2025 (Successor), concurrent with the Intralot Transaction , the Company de-designated its USD-

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.

Refer to Note 1 “ General Information ” and Note 7 “ Business Combinations ” for

further information.

The following tables summarize the Company’s cross currency swap arrangements as of December 31, 2024 (Predecessor).

Company did not have any cross currency swap arrangements designated as hedging instruments as of December 31, 2025

December 31, 2025 (Successor)

December 31, 2024 (Predecessor)

(in thousands)

Hedge Designation

Cross currency swaps

Economic Hedge

Cross currency swaps

Economic Hedge

Net Investment Hedge

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.

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

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

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 12 “ Fair Value

Measurements ” and Note 17 “ Stockholders’ Equity ” for further information.

As of December 31, 2025 (Successor) and December 31, 2024 (Predecessor), the Company’s cash flow hedges included interest

rate swaps of $ 1.5 billion , respectively.

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

Foreign Exchange Forward Contracts

During the third quarter of 2025, the Company entered into a series of foreign exchange forward contracts (the “Deal

Contingent FX Forwards”) to hedge the EUR cash proceeds to be received in connection with the sale of its international

interactive business to Intralot.

The Company agreed to sell total notional amounts of € 1.00 billion and buy USD at fixed

exchange rates between 1.16489 and 1.18390 .

The Deal Contingent FX Forwards do not qualify for hedge accounting treatment

and are therefore carried at fair value with gains or losses recorded to Other non-operating income (expense), net .

Refer to Note

12 “ Fair Value Measurements ” for further information.

The Deal Contingent FX Forwards settled upon completion of the deal

with Intralot in October 2025.

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:

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

There were no assets and liabilities measured at fair value on a nonrecurring basis.

December 31, 2025

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

Cash and cash equivalents Cash and cash equivalents $ 171,233 $ — $ —

Restricted cash Restricted cash 60,021 — —

Investment in GLPI partnership Other assets — 20,418 —

(in thousands)

Balance Sheet Location

Cash and cash equivalents

Restricted cash

Investment in GLPI partnership

Investment in The Star

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 —

Cross currency swaps

Prepaid expenses and other current assets

Cross currency swaps

Total derivative assets at fair value

Total assets $ 231,254 $ 39,909 $ —

Contingent consideration Other long-term liabilities $ — $ — $ 59,923

Contingent consideration

Accrued and other current liabilities

Contingent consideration

Other long-term liabilities

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 —

Cross currency swaps

Accrued and other current liabilities

Cross currency swaps

Other long-term liabilities

Derivative liabilities designated as hedging instruments:

1 unchanged sentence

Accrued and other current liabilities

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 —

Interest rate contracts

Other long-term liabilities

Total derivative liabilities at fair value

3 unchanged sentences

December 31, 2024

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

Cash and cash equivalents Cash and cash equivalents $ 163,194 $ — $ —

Restricted cash Restricted cash 152,068 — —

Investment in GLPI partnership Other assets — 14,146 —

(in thousands)

Balance Sheet Location

Cash and cash equivalents

Restricted cash

Investment in GLPI partnership

Derivative assets not designated as hedging instruments

Cross currency swaps

Prepaid expenses and other current assets

Cross currency swaps

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 —

Interest rate contracts

Prepaid expenses and other current assets

Interest rate contracts

Cross currency swaps

Prepaid expenses and other current assets

Cross currency swaps

Total derivative assets at fair value

Total assets $ 315,262 $ 30,153 $ —

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

Contingent consideration

Other long-term liabilities

Derivatives not designated as hedging instruments:

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

Sinclair Performance Warrants

Other long-term liabilities

Cross currency swaps

Other long-term liabilities

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 —

Interest rate contracts

Accrued and other current liabilities

Interest rate contracts

Other long-term liabilities

Cross currency swaps

Accrued and other current liabilities

Cross currency swaps

Other long-term liabilities

Total derivative liabilities at fair value

Total liabilities

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

There were no transfers made among the three levels in the fair value hierarchy for the period from February 8, 2025 to

December 31, 2025 (Successor), period from January 1, 2025 to February 7, 2025 (Predecessor) and year ended December 31,

2024 (Predecessor).

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

( in thousands) Sinclair Performance Warrants Contingent Consideration

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 )

(in thousands)

Consideration

Balance as of December 31, 2023 (Predecessor)

Change in fair value

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

Balance as of December 31, 2024 (Predecessor)

Change in fair value

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

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,

Balance as of February 7, 2025 (Predecessor)

Balance as of February 8, 2025 (Successor)

Change in fair value

Balance as of December 31, 2025 (Successor)

The gains (losses) recognized in the consolidated statements of operations for derivative instruments are as follows:

Consolidated Statements of

Operations Location

(in thousands)

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 ) — —

Deal Contingent FX Forwards

Other non-operating income

(expense), net

Sinclair Performance Warrants

Other non-operating income

(expense), net

Cross currency swaps (1)

Other non-operating income

(expense), net

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 —

Interest rate contracts

Interest expense, net

Cross currency swaps

Interest expense, net

__________________________________

(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.

(1) Amounts during the year ended December 31, 2024 (Predecessor), as a result of the Company’s de-designation of its EUR-GBP cross currency swaps as

net investment hedges, are included in General and administrative.

Derivative Instruments

The fair values of interest rate contracts and cross currency swap assets and liabilities are classified within Level 2 of the fair

value hierarchy as the valuation inputs are based on estimates using currency spot and forward rates and standard pricing

models that consider the value of future cash flows as of the balance sheet date, discounted to a present value using discount

factors that match both the time to maturity and currency of the underlying instruments.

These standard pricing models utilize

inputs that are derived from or corroborated by observable market data such as interest rate yield curves as well as currency spot

and forward rates.

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Sinclair Performance Warrants

Sinclair Performance Warrants were accounted for as a derivative instrument classified as a liability within Level 3 of the

hierarchy through February 7, 2025 (Predecessor) 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.

assumptions and the probability of meeting performance targets may have a significant impact on the value of the warrant.

Performance Warrants were 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 .

In connection with the Queen Merger, as of February 7, 2025, all outstanding Performance Warrants

became immediately exercisable at a price of $ 0.01 per share and were reclassified out of liabilities and into equity and are no

longer measured at fair value.

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

as of December 31, 2024 (Predecessor).

Contingent consideration

In connection with the acquisition of Bally’s Golf Links on September 12, 2023 (Predecessor), the purchase price included

future cash payments totaling up to $ 125 million to the seller, based upon future events, which were uncertain at the time of

The Company recorded contingent consideration at fair value as a liability on the acquisition date, which was

subsequently remeasured at each reporting date within “Other, non-operating expenses, net” in the consolidated statements of

The contingent consideration was valued at $ 59.9 million as of December 31, 2024 (Predecessor) and $ 123.9

million as of December 31, 2025 (Successor).

As of December 31, 2024 (Predecessor), Level 3 inputs to this valuation

approach included 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 % .

As of December 31, 2025 (Successor), the contingency related to

$ 115 million of the $ 125 million total payments was resolved and is payable in 2026.

As such, that contingency was marked to

its fair value of $ 115 million and is classified as a current liability.

Fair Value Option Equity Method Investments

The Company has long-term investments in unconsolidated entities which it accounts for under the equity method of

The Company has elected the fair value option allowed by ASC 825, with respect to these investments.

fair value option, the investments are remeasured at fair value at each reporting period through earnings.

measures fair value using quoted prices in active markets that are classified within Level 1 of the hierarchy, with changes to fair

value included within Other non-operating (expense) income, net of the consolidated statements of operations.

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.

The Company holds a limited partnership interest in GLP Capital, L.P.

(“ GLP ”), the operating partnership of GLPI.

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

The fair value of the Company’s Term Loan Facility and senior notes are estimated based on quoted prices in active markets

and are classified as Level 1 measurements.

The fair value of the 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, debt discounts and fair value adjustments.

Refer to Note 14 “ Long-

Term Debt ” for further information.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

December 31, 2024

(in thousands)

Term Loan Facility

Intralot British Term Loan

Intralot Greek Term Loan

Intralot 6.00 % Retail Bond due 2029

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

Intralot 6.75 % Senior Secured Notes due 2031

Intralot Supplemental Indenture

Intralot Floating Rate Senior Notes due 2031

ACCRUED AND OTHER CURRENT LIABILITIES

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

As of December 31, 2025 (Successor) and 2024 (Predecessor), accrued and other current liabilities consisted of the following:

(in thousands)

New York gaming license fee

Gaming liabilities

Diamond Sports Group non-cash settlement (1)

Compensation 66,356 83,112

Contingent consideration

Interest payable

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

Insurance reserve

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

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.

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.

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Year Ended December 31,

(in thousands)

Severance and employee related benefits (1)

Casinos & Resorts $ 20,037 $ —

International Interactive ( 794 ) 19,591

North America Interactive ( 1,732 ) 9,735

Other 410 1,688

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

Accelerated depreciation expense (2)

Impairment (3)

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LONG-TERM DEBT

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

As of December 31, 2025 (Successor) and 2024 (Predecessor), long-term debt consisted of the following:

(in thousands)

Term Loan Facility (1)

$ 1,886,650 $ 1,906,100

Intralot British Term Loan

Intralot Greek Term Loan

Revolving Credit Facility

Intralot 6.00 % Greek Retail Bond due 2029

Fixed Rate Senior Notes:

5.625 % Senior Notes due 2029

750,000 750,000

5.875 % Senior Notes due 2031

735,000 735,000

Intralot 6.75 % Senior Secured Notes due 2031

Intralot Floating Rate Senior Notes due 2031 (2)

Intralot Supplemental Indenture

Unamortized original issue discount

Unamortized deferred financing fees

Unamortized fair value adjustment (3)

Long-term debt, including current portion

Current portion of Term Loan and Revolving Credit Facility ( 19,450 ) ( 19,450 )

Current portion of Term Loan, Intralot Greek Term Loan and Revolving Credit Facility

Long-term debt, net of discount and deferred financing fees;

1 unchanged sentence

__________________________________

(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.

(1) The Company has a series of interest rate derivatives to synthetically convert $ 1.0 billion notional of the Company’s variable rate Term Loan Facility into

fixed rate debt, and a series of cross currency swap derivatives to synthetically convert $ 500.0 million and $ 200 million notional of the Company’s USD

denominated Term Loan Facility into fixed rate EUR and GBP denominated debt, respectively, through its maturity in 2028.

Refer to Note 11 “ Derivative

Instruments ” for further information.

(2) At December 31, 2025 the interest rate of the Floating Rate Senior Notes was 6.526 % .

(3) Represents adjustment to recognize the Company’s existing debt at fair value in the Company Merger, calculated as the difference between the fair value

of the Company’s term loan facility and unsecured notes, estimated based on quoted prices in active markets as of the Closing Date, and the respective

ending principal balances as of February 7, 2025.

The adjustment is amortized through Interest expense, net using the effective interest method.

In connection with the closing of the Merger on February 7, 2025, the Company entered into a note purchase agreement and

issued $ 500.0 million in aggregate principal amount of first lien senior secured notes due 2028 (the “2028 Notes”) at an annual

interest rate of 11 % , payable in cash quarterly in arrears, beginning on April 1, 2025.

On October 8, 2025, the Company paid in full the entire $ 500.0 million principal balance of its 2028 Notes through a

mandatory redemption of $ 105.4 million and an optional redemption of $ 394.6 million plus a make-whole payment pursuant to

the note agreement.

In connection with the repayment, the Company paid a total of $ 540.4 million , including accrued interest .

The Company recorded a loss on debt extinguishment of $ 57.4 million during the fourth quarter of 2025, which was comprised

of the make whole payment and the acceleration of unamortized debt issuance costs and debt discount, within Other non-

operating income (expense), net in the consolidated statements of operations for the period from February 8, 2025 to December

31, 2025 (Successor).

In connection with the Merger , the Company settled the pre-existing debt of Queen and recorded a loss on extinguishment of

debt of $ 17.4 million , recorded within “ Other non-operating income (expense), net ” in the consolidated statements of

operations for the period from February 8, 2025 to December 31, 2025 (Successor).

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 “Senior Notes”).

The Senior Notes

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

Bank National

Association, as trustee.

Certain of the net proceeds from the Senior Notes offering were placed in escrow accounts for use in

connection with the Gamesys acquisition.

On October 1, 2021, upon the closing of the Gamesys acquisition, the Company

assumed the issuer obligation under the Senior Notes.

The Senior Notes are guaranteed, jointly and severally, by each of the

Company’s restricted subsidiaries that guarantees the Company’s obligations under its Credit Agreement (as defined below).

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

Interest is payable on the

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

The Company may redeem some or all of the 2031 Notes at any time prior to September 1, 2026, at prices equal to 100 % of the

principal amount of the 2031 Notes to be redeemed plus certain “make-whole” premiums, plus accrued and unpaid interest.

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.

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.

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.

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 $ 650.0 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.

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, 2025

(Successor), the Company was in compliance with its covenants under the Credit Agreement.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In September 2025, the Company executed a Third Amendment to the Credit Agreement (“Amendment No.

Incremental Joinder Agreement that collectively extended and increased the revolving credit facility and updated certain

covenants and pricing provisions.

Following the effectiveness of these amendments, which was subject to regulatory approvals

and obtained in January 2026, a portion of the revolving credit facility will mature in 2028, while the remaining portion will

mature in 2026 .

The amendments also provide for reductions in revolving commitments and related prepayments if specified

transactions are completed.

The revolving credit facility will continue to bear interest, at the Company’s option, at a SOFR-

based or base-rate benchmark plus an applicable margin determined by the Company’s consolidated total-leverage ratio.

Credit Facilities continue to be guaranteed by the Company’s restricted subsidiaries (subject to customary exceptions) and

secured by a first-priority lien on substantially all of the assets of the Company and such guarantors.

Amendment No.

refined the financial maintenance covenant applicable to the revolving lenders and reduced the utilization threshold at which the

covenant becomes effective to 25 % .

On October 10, 2025, the Company partially repaid a portion of the Term Loan Facility, paying $ 401.5 million in cash for a

$ 394.6 million reduction in principal and $ 6.9 million settlement of accrued interest, and recognized a $ 18.3 million loss on

extinguishment of debt.

In an effort to mitigate the interest rate risk associated with the Company’s variable rate credit facilities, the Company utilizes

interest rate and cross currency swap derivative instruments.

Refer to Note 11 “ 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:

Intralot Debt Assumed at Fair Value

In connection with the Intralot Transaction , the Company assumed Intralot’s debt in an aggregate principal amount of

$ 1.97 billion , which was recorded at fair value of $ 1.98 billion .

The fair value adjustment of $ 7.8 million , representing the

difference between the aggregate principal amount and the acquisition-date fair value, is being amortized in interest expense

over the weight-average remaining life of the assumed debt using the effective interest method.

For the period from February 8,

2025 to December 31, 2025 , (Successor), amortization of the fair value adjustment recognized in interest expense was

$ 0.4 million .

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

Intralot Greek Retail Bond

On February 27, 2024, Intralot established a common bond loan program (the “ Intralot Greek Retail Bond ”) for the issuance of

up to € 130.0 million aggregate principal amount of bonds, with a minimum issuance of € 120.0 million The bonds admitted to

trading on the Fixed Income Securities category of the Regulated Market of the Athens Stock Exchange.

As of December 31,

2025 (Successor), € 130.0 million aggregate principal amount ( $ 152.7 million ) was outstanding under the Intralot Greek Retail

The bonds bear interest at a fixed annual percentage of 6.00 % per annum, which will remain fixed throughout the duration of

the bond loan.

The interest is payable semi-annually.

The Intralot Greek Retail Bond matures February 27, 2029, at which time

the Intralot is obliged to repay the principal in full, together with outstanding accrued interest and any other amounts payable.

The Intralot Greek Retail Bond is an unsecured obligation of Intralot, with the benefit of a first-priority pledge over a

designated bond loan collateral account.

The bonds rank pari passu with the claims of all other unsecured creditors of Intralot,

with the exception of claims that have a statutory privilege.

The Intralot Greek Retail Bond is not guaranteed by any of

Intralot’s subsidiaries.

Intralot may not redeem the bonds prior to the expiration of the second interest period following the issue date.

Intralot may redeem all or a portion of the bonds, subject to a minimum redemption amount of € 15.0 million and a requirement

that at least € 50.0 million in aggregate principal amount remain outstanding after any partial redemption.

Early redemption is

subject to the payment of applicable premiums.

In the event of a change of control each bondholder has the right to require Intralot to repurchase of part or all of such

bondholder’s bonds at a price equal to 101 % of the nominal value, plus accrued and unpaid interest and any additional amounts.

Intralot Greek Senior Facilities Agreement

On October 3, 2025, Intralot Capital Luxembourg S.A.

(“Intralot Capital”), a wholly owned indirect subsidiary of the

Company, entered into a Senior Facilities Agreement (the “ Intralot Greek Term Loan ”) with Alpha Bank S.A., Optima Bank

S.A., Piraeus Bank S.A., CrediaBank S.A.

and other parties, providing for an amortizing euro-denominated term loan facility in

an aggregate amount up to € 270.0 million of which Intralot has drawn € 200.0 million as of December 31, 2025 (Successor).

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Intralot Greek Term Loan bears interest at a rate equal to 7.0 % per annum.

Interest periods may be selected in accordance

with the agreement terms.

The Intralot Greek Term Loan requires semi-annual principal repayments plus accrued interest

through the maturity date of October 8, 2029.

Subject to an intercreditor agreement, Intralot Greek Term Loan caries the same

security priority as other senior secured obligations.

Intralot British Pound Term Loan

Intralot Capital is a party to a Senior Facilities Agreement (the “ Intralot British Term Loan ”) with various lenders and agents,

providing for a settling-denominated term loan facility in an aggregate principal amount of £ 400.0 million .

As of December 31,

2025 (Successor), £ 400.0 million ( $ 538.7 million ) was outstanding under the Intralot British Term Loan .

The Intralot British Term Loan bears interest at a rate equal to SONIA (Sterling Overnight Index Average) plus a margin of

Interest periods may be one, three, or six months, or such other periods as agreed among the parties.

The Borrower pays

accrued interest on the last day of each interest period.

The Intralot British Term Loan is secured by first-ranking security interests, including pledges of shares in Intralot Capital and

material subsidiaries of Intralot and, in certain jurisdictions, security over substantially all assets of the obligors.

British Term Loan matures on October 8, 2031.

Intralot Fixed and Floating Interest Rate Bonds

Intralot Capital has issued € 600.0 million aggregate principal amount of 6.750 % Senior Secured Fixed Rate Notes due 2031

(the “ Intralot Fixed Rate Notes ”) and € 300.0 million aggregate principal amount of Senior Secured Floating Rate Notes due

2031 (the “ Intralot Floating Rate Notes ” and, together with the Intralot Fixed Rate Notes , the “ Intralot Notes ”), pursuant to an

indenture dated September 30, 2025 (the “ Intralot Indenture ”) among Intralot Capital, Intralot, and its subsidiaries, a s guarant or,

and The Law Debenture Trust Corporation p.l.c., as trustee.

As of December 31, 2025 (Successor), the full € 900.0 million

aggregate principal amount ( $ 1.1 billion ) of the Intralot Notes was outstanding.

The Intralot Fixed Rate Notes bear interest at a fixed rate of 6.750 % per annum, payable semi-annually, commencing on April

The Intralot Floating Rate Notes bear interest at a rate per annum, reset quarterly, equal to three-month EURIBOR

(subject to a 0 % floor) plus 4.500 % , payable quarterly, commencing on February 28, 2026.

The Intralot Notes mature on

October 15, 2031.

The Intralot Notes are senior secured obligations of Intralot Capital, secured by first-ranking security interests (to the extent

legally possible) over the share of obligors and material subsidiaries, structural intercompany receivables, and to the extent

customary in the applicable jurisdiction, substantially all assets of the obligors.

Enforcement of security is subject to an

intercreditor agreement, and the Intralot Notes may share collateral on an equal ranking or junior basis with other permitted

indebtedness as described in the Intralot Indenture .

The Intralot Notes are unconditionally guaranteed, jointly and severally, by Intralot and future guarantors that is required to

become a guarantor under the Intralot Indenture .

The guarantees are subject to customary limitations under applicable law.

The Intralot Fixed Rate Notes may be redeemed at the option of Intralot Capital, in whole or in part, at any time on or after

October 15, 2027, at determined redemption prices over time, plus accrued and unpaid interest.

Prior to October 15, 2027,

Intralot Capital may redeem the Intralot Fixed Rate Notes at a premium, which is the greater of (a) 1 % of the outstanding

principal amount and (b) the present value of the redemption price at October 15, 2027 plus all required interest payments

through that date, computed using a discount rate equal to the Bund Rate plus 50 basis points , over the outstanding principal

The Intralot Floating Rate Notes may be redeemed at the option of Intralot Capital at any time on or after October 15, 2026, at a

redemption price equal to 100.0 % of the principal amount redeemed plus accrued and unpaid interest.

In addition, prior to October 15, 2027 (in the case of Intralot Fixed Rate Notes ) or October 15, 2026 (in the case of Intralot

Floating Rate Notes ), Intralot Capital may redeem up to 40 % of the aggregate principal amount of the Intralot Notes with the

net cash proceeds of certain equity offerings at a redemption price equal to 106.750 % (in the case of Intralot Fixed Rate Notes )

of the principal amount plus accrued and unpaid interest, subject to certain conditions, including that at least 50 % of the original

aggregate principal amount of the Intralot Notes must remain outstanding immediately after each such redemption.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Intralot Notes are not convertible into equity securities of Intralot Capital or any other entity.

Intralot Super Senior Revolving Credit Facility

Intralot Capital is a party to a Super Senior Revolving Credit Facility Agreement (the “ Intralot RCF Agreement ”) with various

lenders and agents, providing for revolving credit commitments in an aggregate principal amount equal to the greater of

€ 190.0 million and 40.0 % of Intralot’s four-quarter consolidated EBITDA.

The facility may be utilized by way of revolving

loans, letters of credit, or ancillary facilities.

The minimum utilization amount is € 0.5 million for euro-denominated borrowings.

The Intralot RCF Agreement initially bears interest at the applicable reference rate plus a margin of 4.50 % per annum, subject

to future leverage-based adjustments ranging from 4.75 % to 3.75 % based on Intralot’s senior secured net leverage ratio.

Intralot Capital pays a commitment fee equal to 30 % of the applicable margin on unused commitments, payable quarterly in

Letter of credit fees are equal to the applicable margin for revolving loans, plus a fronting fee of 0.125 % per annum.

The facility matures on July 1, 2030.

As of December 31, 2025 (Successor), the Company had no borrowing outstanding under the Intralot RCF Agreement , no

letters of credit outstanding, and € 190.0 million of unused commitments available.

The Intralot RCF Agreement is subject to mandatory prepayment upon a change of control and customer conditions precedent

to borrowing.

The Intralot RCF Agreement contains customary covenants, including limitations on incurring additional

indebtedness and issuance of disqualified stock and preferred stock;

restricted payments;

transactions with

and reporting requirements.

The financial covenants include the maintenance of a senior secured net leverage ratio,

tested quarterly, as well as a total net leverage ratio not exceeding 4.75 :1.00.

The Intralot Indenture and the Company's credit agreements contain customary restrictive covenants, including limitations on

incurring additional indebtedness and the issuance of disqualified stock and preferred stock, restricted payments, liens, asset

sales, and transactions with affiliates;

and reporting requirements.

If the Intralot Notes or facilities obtain investment grade ratings from two rating agencies and no default has occurred and is

continuing, certain of these covenants will be suspended.

Upon a reversion date (when the instruments no longer maintain

investment grade ratings from two rating agencies), the suspended covenants will be reinstated with respect to future events.

The Company's debt agreements contain customary cross-default and cross-acceleration provisions.

As of December 31, 2025 (Successor), the Company was in compliance with all covenants under its debt agreements and there

were no defaults in principal, interest, sinking fund, or redemption provisions with respect to any of its outstanding

indebtedness.

No waivers of acceleration or covenant violations were in effect as of December 31, 2025 (Successor).

Deb t Maturities

As of December 31, 2025 (Successor), the contractual annual principal maturities of long-term debt, including the Revolving

Credit Facility, are as follows:

(in thousands)

2025 $ 19,450

2028 1,828,300

Thereafter 735,000

BALLY’S CORPORATION

2 unchanged sentences

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.

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.

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 $ 1.93 billion and $ 1.62 billion as of December 31, 2025 (Successor) and

2024 (Predecessor), respectively, and right of use assets of $ 1.77 billion and $ 1.54 billion as of December 31, 2025 (Successor)

and 2024 (Predecessor), respectively, which were included in the consolidated balance sheets.

As of December 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 initial minimum annual payments of $ 101.5 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 initial minimum

annual payments of $ 32.2 million .

All components of the Master Lease and Master Lease No.

2 are accounted for as operating

leases within the provisions of A SC 842 , over the lease term or until a re-assessment event occurs.

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.

The renewal options are not reasonably certain of exercise as of December 31, 2025 (Successor).

Following the Merger , as of June 20, 2025 (Successor), the Company also has a master lease agreement through Queen with

GLPI, the “Queen Master Lease”, with The Queen Baton Rouge, Bally's Baton Rouge Casino and Hotel , Casino Queen

Marquette and DraftKings at Casino Queen properties originally being leased under the terms of the Queen Master Lease,

which required initial combined minimum annual payments of $ 31.7 million .

All components of the Queen Master Lease are

accounted for as operating leases within the provisions of ASC 842, over the lease term or until a re-assessment event occurs.

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

The renewal options are not reasonably certain of exercise as of December 31, 2025 (Successor).

Effective July 1, 2025 (Successor), the DraftKings at Casino Queen and The Queen Baton Rouge properties were transferred to

Master Lease No.

2 and the associated annual payments of $ 28.9 million were reallocated from the Casino Queen Master Lease

to Master Lease No.

This was treated as a lease modification event where lease payments were reallocated across

components of the Master Lease No.

2 on a relative fair value basis and the right of use assets and lease liabilities were

In addition to the properties under the master leases explained above, the Company leases land associated with Tropicana Las

Vegas under a ground lease established with GLPI in 2022.

This lease has an initial term of 50 years , with the possibility of

extending up to 99 years through renewal options, and requires initial minimum annual payments 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 initial annual payments by $ 4.1 million , subject to a minimum 1 % annual increase or greater based on CPI, for a

total modified initial minimum annual payment of $ 14.6 million .

The lease modification did not change the lease classification.

As of December 31, 2025 (Successor), the renewal options are not considered reasonably certain to be exercised.

On July 17, 2025, the Company entered into a new master lease agreement with GLP (the “Chicago MLA”), that amended the

existing ground lease for the property on which the Company plans to develop its Permanent Facility and a development

agreement with GLP (the “Chicago Development Agreement”) pursuant to which GLP has committed to advance up to $ 940

million (the “GLP Development Advances”) for the payment of hard costs used to construct the Permanent Facility in exchange

for increasing the amount of rent payable to GLP under the Chicago MLA.

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,

The Chicago MLA has an initial term of 15 years and includes four , five -year options to renew and is subject to annual

Annual rent under the Chicago MLA is $ 20 million , with additional rent equal to 8.5 % of the GLP Development

Advances that are granted to the Company.

The amended and restated ground lease was considered a lease termination in the

third quarter due to the Company ceasing to control the use of the land effective upon signing of the Chicago MLA.

of the termination, the right of use asset and lease liability were derecognized, and a $ 0.5 million gain on lease termination was

Under the Development Agreement, as construction occurs, the Company will recognize a construction receivable on

the consolidated balance sheets due from the GLP.

To the extent costs exceed the amount to be reimbursed by GLP, such costs

are considered prepaid rent, which will be added to the associated operating lease right of use asset once the lease commences.

As of December 31, 2025 (Successor), the construction receivable balance was $ 63.2 million , classified within Accounts

receivable, net, and the prepaid rent balance was $ 175.8 million , classified within Other assets.

In addition, the Company

incurred a loss on sale of assets to GLP of $ 8.7 million during the third quarter of 2025 related to construction costs previously

capitalized that were determined not to represent prepaid rent, including capitalized interest of $ 4.8 million .

classified within General and administrative on the Consolidated Statement of Operations.

During the fourth quarter of 2025,

the Company received reimbursements from GLP of $ 201.6 million .

Components of the Company’s lease costs were as follows:

(in thousands)

5 unchanged sentences

Total operating lease expense

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

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

__________________________________

(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,

(3) Gain on sale-leaseback, net includes a gain of $ 26.4 million and $ 209.8 million from the termination of the previous right of use assets and lease liabilities

and difference in the transaction price and the derecognition of assets, respectively, related to Bally’s Kansas City and Bally’s Shreveport , as well as a loss

of $ 150.0 million as a result of the lease modification of the land underlying the Company’s Bally’s Chicago project during the year ended December 31,

2024 (Predecessor).

Supplemental cash flow and other information related to operating leases are as follows:

(in thousands)

Cash paid for amounts included in the lease liability - operating cash flows from operating leases $ 145,891 $ 132,871 $ 68,689

Cash paid for amounts included in the lease liability - operating cash flows

from operating leases

Right of use assets obtained in exchange for operating lease liabilities

Derecognition of operating leases

$ ( 259,607 )

Derecognition of financing obligation

December 31, 2024 December 31, 2023

Weighted average remaining lease term 26.2 years 17.6 years

$ ( 200,000 )

December 31, 2025

December 31, 2024

Weighted average remaining lease term

Weighted average discount rate

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

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025 (Successor), future minimum lease payments under noncancelable operating leases are as follows:

(in thousands)

2025 $ 199,690

Thereafter 3,868,745

Total lease payments

present value discount

( 1,478,504 )

Lease obligations (1)

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.

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.

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.

__________________________________

(1) Total lease obligations exclude future minimum lease payments under the Chicago MLA, which has not yet commenced as of December 31, 2025

Lease Transactions

On February 11, 2026, the Compan y completed the previously announced sale-lea seback of its Bally’s Twin River property to

GLP for total consideration of $ 700 million , with initial annual rent of $ 56 million .

Following the sale-leaseback, Bally's Twin

River is leased under the terms of Master Lease No.

The Company leases its hotel rooms to patrons.

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

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.

Additionally, the Company leases lottery equipment to government lottery commissions in conjunction with providing related

operations, maintenance, and support services.

These arrangements are priced either as (i) a fixed fee per machine per period or

(ii) a variable fee based on a percentage of the lottery organization’s gross ticket sales.

The Company records lessor revenue in “ Non-gaming revenue ” within the consolidated statements of operations.

For the period

from February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor)

and the year ended December 31, 2024 (Predecessor), the Company recognized $ 119.4 million , $ 11.0 million and

$ 148.7 million of lessor revenues.

Equi ty Incentive Plans

As of December 31, 2025 (Successor), 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 2 021 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, 2025 (Successor), 1.0 million shares were available for grant under the

2021 Incentive Plan.

As a result of the Merger described in Note 1 , “ General Information ”, all outstanding restricted stock awards granted under the

Queen Casino’s Amended and Restated 2023 Equity Incentive Plan were cancelled and converted into restricted stock awards

under the Company’s 2021 Incentive Plan.

The conversion was based on an exchange ratio set forth in the Merger Agreement

and resulted in the issuance of 1,754,410 restricted awards.

Sh are-Based Compensation

The Company recognized total share-based compens ation expense of $ 31.1 million , $ 2.0 million and $ 14.8 million for the

period from February 8, 2025 to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025

(Predecessor) and the year ended December 31, 2024 (Predecessor), respectively.

The total income tax benefit for share-based

compensation arrangements was $ 8.1 million , $ 0.5 million and $ 3.9 million , for the period from February 8, 2025 to December

31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the year ended December 31,

2024 (Predecessor), respectively.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025 (Successor), there was $ 4.8 million of unrecognized compensation cost related to outstanding share-

based compensation arrangements (including RSA, RSU and PSU arrangements and stock options) which is expected to be

recognized over a weighted average period of 1.2 years .

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

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.

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 period from February 8, 2025

to December 31, 2025 (Successor) and period from January 1, 2025 to February 7, 2025 (Predecessor):

Outstanding at December 31, 2024 (Predecessor)

Outstanding at February 7, 2025 (Predecessor)

Outstanding at February 8, 2025 (Successor)

( 1,555,300 )

Outstanding at December 31, 2025 (Successor)

The total intrinsic value of RSUs vested was $ 27.1 million , $ 0.2 million , and $ 6.9 million , for the period from February 8, 2025

to December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the year ended

December 31, 2024 (Predecessor), 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.

the performance targets have not yet been established for the PSUs that are eligible to be earned in 2026 or later, a grant date

has not yet been established for those awards in accordance with ASC 718.

The grant date for the 2025 (Successor) and 2024

(Predecessor) performance periods have been established and based upon achievement of the performance criteria for the

calendar years ended December 31, 2025 (Successor) and 2024 (Predecessor), 305,524 and 326,155 PSUs, respectively,

became eligible for vesting.

Stock Options

During the fourth quarter of 2025 (Successor), the Company granted equity-classified stock options under the 2021 Incentive

The stock options vest in three equal annual installments, half of which are based on continuous service with the

Company and half of which are based on the achievement of applicable performance criteria for each of the years ended

December 31, 2026, 2027 and 2028.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There were no stock options outstanding for the period ending February 7, 2025 (Predecessor).

The following summary

presents information of stock options activity for the period from February 8, 2025 to December 31, 2025 (Successor):

Outstanding at February 8, 2025 (Successor)

Outstanding at December 31, 2025 (Successor)

The following table summarizes the Company’s stock options outstanding as of December 31, 2025 (Successor):

Options Outstanding

Exercise Price

Number Outstanding

Weighted Average

Remaining Contractual

Weighted Average Exercise

As of December 31, 2025 (Successor), no options were exercisable and the options outstanding had no intrinsic value.

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.

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.

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.

As of December 31, 2025

(Successor), $ 95.5 million was available for use under the capital return program.

There was no repurchase activity during the period from February 8, 2025 to December 31, 2025 (Successor), period from

January 1, 2025 to February 7, 2025 (Predecessor) or year ended December 31, 2024 (Predecessor).

No cash dividends were paid during the period from February 8, 2025 to December 31, 2025 (Successor), period from January

1, 2025 to February 7, 2025 (Predecessor) or year ended December 31, 2024 (Predecessor).

As of December 31, 2025

(Successor), the Company does not intend to pay dividends on its common stock for the foreseeable future.

determinations regarding the Company’s dividend policies will be at the discretion of the Board and will depend on then-

current conditions, including the Company’s financial condition, results of operations, contractual restrictions, capital and

regulatory requirements and other factors the Board deems relevant.

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.

As of December 31,

2025 (Successor) and 2024 (Predecessor), 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.

As of December 31, 2025 (Successor), the Company had 48,524,809 common shares issued and outstanding.

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)

Sinclair Performance Warrants (2) (Note 15)

Sinclair Options (1) (Note 15)

MKF Penny warrants (Note 13)

Penny Warrants (Note 2 )

Outstanding awards under Equity Incentive Plans (Note 16 )

__________________________________

(1) As of December 31, 2024 and 2023, the Options consists of four equal tranches to purchase shares with exercise prices ranging from $ 30.00 to $ 45.00 per share, exercisable over a seven-year period beginning on the fourth anniversary of the November 18, 2020 closing of the Framework Agreement.

Pursuant to the Support Agreement, on February 7, 2025, all remaining Options were returned to Bally’s in exchange for an additional 384,536 Penny Warrants.

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

(2) On February 7, 2025, the consummation of the Merger constituted a Change of Control under the Framework Agreement and as such, all performance warrants became immediately exercisable at a price of $ 0.01 per share.

Refer to Note 25 “ Subsequent Events ” for further information

BALLY’S CORPORATION

1 unchanged sentence

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)

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)

The following table reflects the change in accumulated other comprehensive loss by component:

(in thousands)

Adjustment (1)

Accumulated other comprehensive (loss)

income at December 31, 2023 (Predecessor)

$ ( 177,203 )

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 )

$ ( 209,558 )

(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).

Other comprehensive (loss) income before

reclassifications

Reclassifications from accumulated other

comprehensive (loss) income to earnings

Net current period other comprehensive (loss)

Accumulated other comprehensive (loss)

income at December 31, 2024 (Predecessor)

Other comprehensive (loss) income before

reclassifications

Reclassifications from accumulated other

comprehensive (loss) income to earnings

Net current period other comprehensive (loss)

Accumulated other comprehensive (loss)

income at February 7, 2025 (Predecessor)

$ ( 274,842 )

$ ( 269,710 )

(in thousands)

Accumulated other comprehensive income

(loss) at February 8, 2025 (Successor)

Other comprehensive income (loss) before

reclassifications

Reclassification from accumulated other

comprehensive income (loss) to earnings

Net current period other comprehensive

income (loss)

Amount attributable to non-controlling

Accumulated other comprehensive income

(loss) at December 31, 2025 (Successor)

__________________________________

(1) Reclassifications from accumulated other comprehensive (loss) income during the year ended December 31, 2024 (Predecessor) 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 3 “ Related

Party Transactions ” for further information).

(2) Reclassifications from accumulated other comprehensive (loss) income during the year ended December 31, 2024 (Predecessor) to earnings includes

$ 9.1 million released as a result of de-designating a EUR-GBP cross currency swap related to the Company’s sale of the Carved-Out Business (refer to

Note 3 “ Related Party Transactions ” for further information).

(3) As of December 31, 2025 (Successor), approximately $ 16.9 million of existing gains and losses are estimated to be reclassified into earnings within the

next 12 months.

BALLY’S CORPORATION

1 unchanged sentence

The components of income (loss) before taxes are as follows:

Years Ended December 31,

(in thousands)

Domestic $ ( 456,728 ) $ ( 244,412 ) $ ( 444,549 )

Foreign ( 95,774 ) 58,674 ( 9,920 )

Total $ ( 552,502 ) $ ( 185,738 ) $ ( 454,469 )

February 8, 2025 to

December 31, 2025

Period from January

1, 2025 to February 7,

December 31, 2024

$ ( 432,530 )

$ ( 456,728 )

$ ( 617,975 )

$ ( 552,502 )

The components of the provision (benefit) for income taxes are as follows:

Years Ended December 31,

(in thousands)

February 8, 2025 to

December 31, 2025

Period from January

1, 2025 to February

December 31, 2024

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 )

Provision for income taxes

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the provision for income taxes to the amount computed by applying the 21% US federal income tax rate to

income (loss) before income taxes after the adoption of ASU 2023-09 is as follows:

Period from February 8, 2025

to December 31, 2025

Period from January 1, 2025 to

February 7, 2025

(in thousands, except percentages)

Income tax expense at US Federal Statutory Tax Rate

$ ( 129,774 )

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,

State and local income taxes, net of federal effect (1)(2)

Foreign tax effects:

Statutory tax rate difference between Gibraltar

and United States

Nondeductible expenses and nontaxable income

United Kingdom

Statutory tax rate difference between the United

Kingdom and United States

Changes in valuation allowance

Nondeductible expenses and nontaxable income

Statutory tax rate difference between Jersey and

United States

Statutory tax rate difference between the Isle of

Man and United States

Provincial tax rate difference between Ceuta and

United States

Changes in valuation allowance

Other foreign jurisdictions

Effect of cross-border tax laws

Global intangible low-taxed income

Subpart F income

Changes in valuation allowances

Nontaxable or nondeductible items

Nondeductible transaction costs

Changes in unrecognized tax benefits

Other adjustments

Current period adjustment to deferred tax liability

Effective Tax Rate

__________________________________

(1) The state and local jurisdictions that contribute to the majority of the tax effect in this category for the period from February 8, 2025 to December 31,

2025 (Successor) include Delaware, Illinois, Louisiana, Mississippi, Missouri, Kansas City (Missouri), and Pennsylvania.

(2) The state and local jurisdictions that contribute to the majority of the tax effect in this category for the period from January 1, 2025 to February 7, 2025

(Predecessor) include Rhode Island, Illinois and Indiana.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the effective rate to the statutory US federal tax rate before the adoption of ASU 2023-09 is as follows:

(in thousands)

Income tax (benefit) expense at statutory federal rate $ ( 116,025 ) $ ( 39,009 ) $ ( 95,439 )

December 31, 2024

Income tax benefit at statutory federal rate

$ ( 116,025 )

State income taxes, net of federal effect

3 unchanged sentences

Share-based compensation

Gain on bargain purchases — — 22

CARES Act ( 3,153 ) — —

Return to provision adjustments

Global intangible low-tax income (“GILTI”) 17,941 14,333 2,404

Goodwill — — 28,935

Global intangible low-tax income

Change in uncertain tax positions

2 unchanged sentences

Effective income tax rate on continuing operations

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,

Significant components of the Company’s deferred income taxes are as follows:

(in thousands)

December 31, 2025

December 31, 2024

Deferred tax assets:

Interest 283,757 195,628

Net operating loss carryforwards

1 unchanged sentence

Accrued and other current liabilities

21,681 44,707

Framework Agreement liabilities

20,344 31,376

Share-based compensation

2 unchanged sentences

Deferred tax liabilities:

Land ( 4,167 ) ( 4,142 )

Property and equipment

Change in accounting method

Cumulative translation adjustment

RI Joint Venture and GLPI Partnership

Revaluation of instruments

Amortizable assets

1 unchanged sentence

Net deferred tax liabilities

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.

$ ( 541,031 )

$ ( 115,905 )

The Company does not reinvest undistributed earnings, and accordingly, the Company has determined that no deferred tax

liability is required for undistributed foreign earnings as of December 31, 2025 (Successor) and 2024 (Predecessor).

the Company has recorded a deferred tax liability to other comprehensive income related to the translation of the financial

statements of foreign subsidiaries as of December 31, 2025 (Successor) and will continue to monitor for future changes.

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:

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;

relaxation of interest expense deduction limitation for income tax purposes;

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

The Company’s 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.

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 carry overs, such as the Section 163(j) interest limitation.

Accordingly, a $ 275.1

million and $ 234.6 million valuation allowance has been established as of December 31, 2025 (Successor) and 2024

(Predecessor), respectively.

As of December 31, 2025 (Successor) there was $ 217.3 million of federal net operating carryforwards subject to a section 382

limitation with an unlimited carryforward period, and $ 590.1 million of state net operating loss carryforwards, which expire at

various dates through 2045.

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.

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.

As of December 31, 2025

(Successor) , there was $ 20.6 million tax contingency accruals and deferred tax asset reductions for uncertain tax positions, of

which $ 18.1 million would impact the effective tax rate, if recognized.

This can give rise to tax uncertainties which, upon audit,

may not be resolved in the Company’s favor.

A reconciliation of the beginning and ending balances of the gross liability for

uncertain tax positions is as follows (in thousands):

Uncertain tax position liability at December 31, 2023 (Predecessor)

Increases related to tax positions taken during the period

Uncertain tax position liability at December 31, 2024 (Predecessor)

Decreases related to tax positions taken during the period

Uncertain tax position liability at February 7, 2025 (Predecessor)

Uncertain tax position liability at February 8, 2025 (Successor)

Decreases related to tax positions taken during prior periods

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.

Decreases related to settlements with taxing authorities

Uncertain tax position liability at December 31, 2025 (Successor)

The Company records interest and penalties related to uncertain tax positions as a component of the income tax provision

The Company has reserved interest and penalties on uncertain tax positions of $ 0.8 million as of December 31, 2025

The Company has reserved interest and penalties on uncertain tax positions of $ 1.0 million as of December 31,

2024 (Predecessor).

The Company has recorded a $ 0.2 million benefit for interest on uncertain tax positions on the consolidated

statements of operations for the period from February 8, 2025 to December 31, 2025 (Successor).

The Company has recorded a

$ 0.3 million provision for interest on uncertain tax positions on the consolidated statements of operations for the year ended

December 31, 2024 (Predecessor).

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 2025 (Successor), 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, 2014 through 2025.

settled the appeal of its audit by the State of Colorado during the period from February 8, 2025 to December 31, 2025

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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income taxes paid, net of refunds received were as follows:

(in thousands)

Period from February 8,

2025 to December 31, 2025

US state and local

United Kingdom

Other foreign jurisdictions

Total income taxes paid, net of refunds

__________________________________

During the period from January 1, 2025 to February 7, 2025 (Predecessor), cash received from income tax refunds was $ 0.1 million in the

State of Delaware.

Cash received from income tax refunds, net of cash paid was $ 2.2 million during the year ended December 31, 2024

(Predecessor) .

COMMITMENTS AND CONTINGENCIES

The Company is a party to other various legal and administrative proceedings which have arisen in the ordinary course of its business.

The Company is a party to other various legal and administrative proceedings which have arisen in the ordinary course of its

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.

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.

assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from

such matters.

New York Conveyance Agreement

On November 17, 2025, the Company entered into a Conveyance Agreement (the “Conveyance Agreement”) with the City of

New York (the “City”) and Bally’s New York Operating Company, LLC, a Delaware limited liability company and a

subsidiary of the Company (“ Bally’s New York ”).

Pursuant to the Conveyance Agreement, the City agreed to (i) dispose of

certain parkland property interests to Bally’s New York (the “Development Parcel”), (ii) alienate certain parkland in order to

grant Bally’s New York a non-exclusive easement over such lands for purposes of accessing the Development Parcel and (iii)

discontinue certain lands as parkland and alienate and transfer jurisdiction of such lands to the City’s Department of

Transportation for use as public roadways (the “Ring Road Parcel”) to facilitate access to the Development Parcel and so the

Development Parcel may be used by the Company for a gaming facility.

The closing of the transactions contemplated by the Conveyance Agreement occurred in February 2026 and was contingent

upon, among other things, (i) Bally’s New York’s agreement to (a) make certain capital improvements to Ferry Point Park in

the Bronx, NY with a fair market value of approximately $ 161 million and (b) to del iver security instruments to the City to

secure the performance and completion of such capital improvements, (ii) the Company being awarded a downstate gaming

facility license from the New York State Gaming Commission, (iii) payment by Bally’s New York to the City’s Department of

Parks & Recreation of an administrative fee in the amount of $ 1 million , (iv) Bally’s New York’s agreement to pay for all costs

and expenses for the development and mapping of the Ring Road Parcel and (v) Bally’s New York’s payment of real property

transfer taxes with respect to the transactions contemplated by the Conveyance Agreement.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

New York Gaming License Commitments

In December 2025, the Company was awarded one of New York State’s three downstate commercial casino licenses for its

planned Bally’s Bronx project, requiring the Company to pay a $ 500 million licen se fee, which was paid in the first quarter of

2026 , as well as post a bond or cash deposit equal to 5 % of the total project investment.

The Company must also implement its

community benefit commitments, including periodic public reporting, and engage an independent Compliance Monitoring

Team approved by the New York State Gaming Commission to oversee regulatory, anti‑money‑laundering, and

community‑benefit compliance.

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.

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, 2025 (Successor), approximately $ 40.5 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.

land acquisition costs and financing costs, among other types of costs, are not counted toward meeting this requirement.

December 31, 2025 (Successor), approximately $ 800.0 million of this commitment remains.

Bally’s New York - As noted above pursuant to the Conveyance Agreement, Bally’s New York must spend $ 161 million in

capital improvements to Ferry Point Park to be completed within 7 years after closing.

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.

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.

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.

Performance and other bonds

Certain contracts require the Company to provide a surety bond as a guarantee of performance for the benefit of customers.

These bonds give beneficiaries the right to obtain payment and/or performance from the issuer of the bond if certain specified

events occur.

In the case of performance bonds, such events include the Company’s failure to perform its required obligations

under the applicable contracts.

In general, the Company would only be liable for these guarantees in the event of breach of its

obligations and failure to perform under each applicable contract, which the Company determined is not probable.

no liability has been recorded as of December 31, 2025 (Successor) and 2024 (Predecessor) related to these bonds.

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.

As of December 31, 2025 (Successor), the Company has entered into multiple sponsorship agreements with various

professional sports leagues and teams.

These agreements commit a total of $ 114.9 million through 2036 and grant the Company

rights to use official league marks for branding and promotions, among other benefits.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

As of December 31, 2025 (Successor), the cumulative minimum obligation committed in these agreements is $ 32.1

million through 2029 .

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.

As of December 31, 2025 (Successor), the Company had approximately 11,700 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, 2025 (Successor), the Company had 36 collective bargaining agreements

covering approximately 3,679 employees.

All collective bargaining agreements are in good standing and most have been

renegotiated with terms between three and five years .

Th ere 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 repl acement agreements, there can be no assurance as to

whether the terms will be on comparable terms to the existing agreements.

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.

D uring the first quarter of 2025, the Company moved a component of the North America Interactive operating segment into a

separate operating segment, which is reported in the Corporate & Other category.

In the fourth quarter of 2025, the Company

further updated its operating and reportable segments in connection with the Intralot Transaction .

These changes were made to

better align with the Company’s strategic growth initiatives and how its chief operating decision maker evaluates performance

and allo cates resources .

As a result, the Company determined it had four operating and reportable segments:

Casinos & Resorts ,

Bally's Intralot B2B , Bally's Intralot B2C , and North America Interactive .

Prior period reportable segment results and related

disclosures have been conformed to reflect the Company’s current reportable segments.

The Company’s four reportable segments as of December 31, 2025 (Successor) include:

Casinos & Resorts - Includes 19 casino and resort properties, one horse racetrack and one golf course.

Bally's Intralot B2B - Includes Intralot’s B2B global lottery and technology services operations and the Company’s licensing

Bally's Intralot B2C - Includes the Company’s interactive European gaming operations, Intralot’s B2C lottery operations, as

well as one casino property, Bally's Newcastle , in the UK.

North America Interactive - A portfolio of sports betting and iGaming offerings in the United States and Canada.

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 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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025 (Successor), 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

consists primarily of revenue from the UK.

Revenue generated from the UK represented approximately 28 % and 32 % of total

revenue, respectively, during the period from February 8, 2025 to December 31, 2025 (Successor) and the period from January

1, 2025 to February 7, 2025 (Predecessor).

During the year ended December 31, 2024 (Predecessor), revenue generated outside

o f the US consisted primarily of revenue from the UK and Japan of approximately 28 % and 6 % of total revenue, 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.

The following table sets forth revenue and Adjusted EBITDAR for the Company’s four 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.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31,

(in thousands)

Casinos & Resorts

International Interactive 909,493 973,210 946,442

Bally's Intralot B2B

Bally's Intralot B2C

North America Interactive

Total $ 2,450,478 $ 2,449,073 $ 2,255,705

Corporate & Other

Adjusted EBITDAR (1)

Casinos & Resorts

International Interactive 336,460 343,559 321,651

Bally's Intralot B2B

Bally's Intralot B2C

North America Interactive

Corporate & Other

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

2 unchanged sentences

Tropicana Las Vegas demolition and closure costs

( 59,838 ) — —

Share-based compensation

2 unchanged sentences

Loss on disposal of business

Merger Agreement costs (3)

( 14,808 ) — —

Merger Agreement and Intralot Transaction costs (3)

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 )

Loss from operations

Other income (expense)

Interest expense, net

Other ( 4,545 ) ( 12,186 ) 46,692

Total other expense, net

Loss before income taxes

(Provision) benefit for income taxes ( 15,252 ) ( 1,762 ) 28,923

Provision for income taxes

$ ( 665,539 )

$ ( 567,754 )

(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.

__________________________________

(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.

Refer to Note 15 “ Leases ” for further

(3) Costs incurred in connection with the Merger Agreement and Intralot Transaction discussed in Note 1 “ General Information .”

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth significant segment expenses and other segment items by reportable segment (in thousands):

Years Ended December 31, Casinos & Resorts International Interactive North America Interactive

Revenue $ 1,363,113 $ 909,493 $ 177,872

(4) 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.

The following table sets forth significant segment expenses and other segment items by reportable segment:

(in thousands)

Period from February 8, 2025 to December 31,

2025 (Successor)

segment expenses

Marketing costs

Gaming tax 190,505 158,691 48,015

Compensation 393,160 97,431 38,057

Other direct costs

2 unchanged sentences

Other segment items (1)

105,324 ( 89 ) 181

Segment EBITDAR

Revenue $ 1,363,291 $ 973,210 $ 112,572

Period from January 1, 2025 to February 7, 2025

(Predecessor)

segment expenses

Marketing costs

Gaming tax 160,493 145,239 21,871

Compensation 379,835 104,538 40,620

Other direct costs

2 unchanged sentences

Other Segment Items (1)

114,217 158 426

Segment EBITDAR

Revenue $ 1,227,563 $ 946,442 $ 81,700

Year Ended December 31, 2024 (Predecessor)

segment expenses

Marketing costs

Gaming tax 148,945 134,338 6,268

Compensation 325,047 91,369 64,555

Other direct costs

2 unchanged sentences

Other segment items (1)

104,245 ( 1,036 ) 2,519

Segment EBITDAR

__________________________________

(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.

(1) Other Segment Items primarily includes Gaming and non-gaming expenses within our Casinos & Resorts reportable segment, and certain other

immaterial costs and allocations within each of the Company’s reportable segments.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31,

(in thousands)

1 unchanged sentence

Casinos & Resorts

International Interactive 706 2,462 12,392

Bally's Intralot B2B

Bally's Intralot B2C

North America Interactive

1 unchanged sentence

__________________________________

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.

(1) Includes $ 95.3 million , $ 11.0 million , and $ 133.6 million related to our future Bally’s Chicago project during the period from February 8, 2025 to

December 31, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the year ended December 31, 2024 (Predecessor),

respectively.

Total assets are not regularly reviewed for each operating segment when assessing segment performance or allocating resources

and accordingly, are not presented.

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,

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.

(in thousands, except per share data)

Net loss attributable to Bally’s Corporation

$ ( 650,074 )

Net loss applicable to common stockholders $ ( 567,754 ) $ ( 187,500 ) $ ( 425,546 )

$ ( 567,754 )

Weighted average common shares outstanding, basic

1 unchanged sentence

Weighted average common shares outstanding, diluted

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.

SUBSEQUENT EVENTS

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.

Basic loss per share

Diluted loss per share

Anti-dilutive shares excluded from the calculation of diluted earnings per

The Company has Penny Warrants 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 Penny Warrants were considered exercisable for little to no consideration and

are therefore included in basic shares outstanding at their issuance date.

Refer to Note 2 “ Summary of Significant Accounting

Policies ” for further information regarding the Framework Agreement.

BALLY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Bally’s stockholders owning 17.9 million outstanding shares elected to retain their Bally’s stock by means of a rollover election and continue as stockholders of Bally’s.

As a result of the completion of the transactions contemplated by the Merger Agreement, there are 48.4 million shares outstanding as of February 7, 2025.

The warrants issued under the Framework Agreement, the Support Agreements, and those in connection with the acquisition of MKF, representing the right to purchase up to 11.6 million shares of Bally’s common stock, remain outstanding.

Refer to Note 1 “ General Information ,” Note 15 “ Strategic Partnership - Sinclair Broadcast Group ” and Note 20 “ Stockholders' Equity ” for further information.

Secured Notes

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

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

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

After two years, the notes can be redeemed at par.

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

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

SUBSEQUENT EVENTS

New Term Loan Facility

On February 11, 2026, the Company entered into a new $ 1.1 billion term loan credit facility due 2031 (the “Term Loans”).

Term Loans were provided by funds managed by Ares Management Credit, King Street Capital Management, and TPG Credit.

The Term Loans are secured by substantially all material assets of the Company and its wholly owned subsidiaries, subject to

customary exceptions and exclusions.

Term Loan Facility and Revolving Credit Facility Repayments

On February 11, 2026, the Company repaid in full the outstanding balance under its Term Loan Facility, resulting in cash

payments of $ 1.48 billion .

Additionally, in February 2026, the Company paid down $ 448.0 million of amounts outstanding

under its Revolving Credit Facility , which had been drawn in January 2026 to fund the New York gaming license fee.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data