Bally’s lowers full-year guidance after $61.8m net loss in Q3

Figures published by Bally’s tell a quarter of two stories for the operator. While it reported growth across all business segments, higher spending offset this growth and led to a Q3 loss.

Among the highlights in Q3 is a record performance by the Casino and Resorts business. Both the International Interactive and North America Interactive segments also posted year-on-year growth.

Bally’s was also boosted by the opening of a temporary land-based casino in Chicago, Illinois towards the end of the quarter. The operator set out plans for a new development in Kansas City in Missouri and rolled out its new Bally Bet online sports betting app.

In addition, Bally’s launched its brand in the UK market. In September, Bally Casino replaced the existing Megaways Casino site, operated by its Gamesys business.

Bally’s CEO Robeson Reeves said these developments place the operator in a good position for further revenue growth. However, this has not stopped Bally’s reducing its revenue and adjusted EBITDAR guidance for the full-year.

“Bally’s continued to generate very solid operating results across all three of our business segments,” Reeves said. “We also achieved significant development and project milestones.

“We continue to gain incremental share in the UK due to our timely adaptations in response to regulatory changes. Our formula of increasing average revenue per user (ARPU) and first-time depositors (FTDs), while reducing cost per acquisition (CPA), is yielding positive results. 

“Our Bally Bet rollout will continue in the fourth quarter and we are extremely pleased with the user engagement and the technology integration.”

Revenue reaches $632.5m in Q3

Taking a closer look at Bally’s performance in the three months to 30 September, group revenue for the quarter amounted to $632.5m, a year-on-year rise of 9.4%. This includes $508.9m in gaming revenue, up 9.3%, and $123.6m in non-gaming revenue, a rise of 9.9%.

Breaking this down by business, Casinos and Resorts revenue climbed 9.3% to a Q3 record of $359.0m. The segment also posted positive adjusted EBITDAR of $118.2m for the quarter.

Elsewhere, revenue from the International Interactive business increased 7.2% to $243.9m, with adjusted EBITDAR at $85.5m. In addition, North America International revenue climbed 33.9% to $29.6m but posted adjusted EBITDAR loss of $17.6m.

Losses mount as spending rises at Bally’s

Turning to costs and operating expenses for Q3 amounted to $595.2m, up 13.5% on last year. Spending was higher in all areas, with the main outgoing general and administrative at $230.6m – just ahead of gaming costs of $229.1m.

Net other costs, primarily interest expenses, reached $55.1m. This left Bally’s with a pre-tax loss of $17.9m, compared to last year’s $1.7m profit. The operator paid $43.9m in income tax, resulting in the $61.8m net loss, in contrast to a profit of $593,000 in 2022.

In addition, Bally’s reported $173.2m in adjusted EBITDAR for the quarter. 

Year-to-date: Bally’s stays the black

Looking at the year-to-date, revenue in the nine months to 30 September hit $1.84bn, up 9.4%. Gaming revenue amounted to $1.49bn and non-gaming revenue $348.3m.

Bally’s did not publish a full business breakdown for the period. However, it did reveal that total operating costs amounted to $1.42bn, a drop of 6.7% from last year. Total other costs reached $176.0m.

This left a pre-tax profit of $243.9m, a rise of 287.1%. Even after paying $153.0m in income tax, Bally’s still reported a net profit of $90.9m, up 46.6%. The operator also reported adjusted EBITDAR of $492.2m for the period.

Full-year guidance lowered at Bally’s 

Based on the latest figures, Bally’s has reduced its full-year guidance. Revenue is now set to amount to between $2.40bn and $2.50bn, down from a previous range of $2.50bn to $2.60bn. In addition, full-year adjusted EBITDAR is expected to reach between $640m to $655m, compared to the earlier range of $665m to $700m.

Bally’s president George Papanier said: “Bally’s portfolio of assets remains well-positioned and has demonstrated significant year-over-year revenue growth. We continue to take share in our respective markets, which the monthly gaming data illustrates, as we outperformed peers in most states. 

“While we are closely monitoring consumer spending, we haven’t seen major shifts in customer behaviour, with the exception of very specific instances.”