Bally’s execs tout online growth, Chicago casino progress during second-quarter earnings call
Bally’s second-quarter earnings call on Wednesday featured optimistic presentations from CEO Robeson Reeves, president George Papanier and CFO Marcus Glover. Of its three verticals, two reported year-over-year growth in Q2. Its casino operations and North American digital segments posted gains of 3% and 95%, respectively. Its international interactive division declined 7%.
The big spike in digital was due mainly to the company’s March launch of igaming in Rhode Island. Internationally, Reeves said that its UK performance was strong but lagged elsewhere, mainly Asia, leading to the overall segment decline.
The trio did not comment on or field questions about Bally’s biggest development, last week’s takeover from Standard General. There was also no information given on how the company plans to merge with Queen Casino & Entertainment. Queen is another operator owned by Standard General, and the companies’ combined portfolio includes 19 casinos in 11 states.
Sweet home Chicago
They did, however, give more details regarding the permanent Chicago casino. On 12 July, Bally’s announced that Gaming and Leisure Properties (GLPI) would extend the $940m in funding necessary to complete the project. Bally’s also sold and leased back two properties to GLPI and gave the option for a third.
Reeves said the company is “now fully ready to plant our flag in the heart of the city” and on track to open in the third quarter of 2026. Later in the call September 2026 was mentioned as a possible goal.
Papanier said overall there is “now no doubt” it will come together as planned and added that demolition is under way. After changing the design and shifting to a single-phase development plan, he said the construction budget is now $1.3bn. Those costs will be incurred over the next two years.
As that develops, officials said efforts are also ramping up at the temporary facility at Medinah Temple. This includes additional bus services for players in the area. A VIP lounge will also open this week at the casino, which has surpassed a million total visitors since its opening last September.
Overall, the role of GLPI in facilitating the project was lauded by all three executives. “We are delighted to strengthen our alliance with our partners at GLPI to bring our permanent Chicago casino to life,” Glover said.
Possibilities abound for Las Vegas, New York
Two other topics of the call were the future of the Tropicana site in Las Vegas and the company’s bid for a New York casino in the Bronx.
In Las Vegas, Bally’s will demolish the casino to make way for a new $1.5bn stadium for the Oakland A’s. It is doing so in exchange for the right to develop a new property on the site. The stadium will encompass nine of the 36 acres on the plot, which is also owned by GLPI.
Reeves said that implosion is expected in October. Beyond that, the company is “still assessing options” for future development.
“We continue to evaluate development options for the remainder of the 36 acres and remain optimistic about the possibilities for the site,” Papanier added.
With regard to New York, the conversation was also speculative, given that licensing decisions are not expected for another year. Bally’s owns the former Trump Golf Links course in the Bronx. It is currently proposing a $2.5bn casino project on the site. It is one of 11 bids vying for three downstate licences.
“We believe our site at Bally’s Golf Links at Ferry Point is superior to the sites offered by our competitors,” Papanier said. Although the licensing process remains “fluid” he posited that the economic benefits of the Bally’s proposal would “more positively impact the lives of many local residents”.
Future igaming, sports betting earnings growth expected
Bally’s digital efforts appeared to be gaining momentum in Q2. Reeves noted that its Rhode Island igaming monopoly generated $6.7m in revenue for the quarter, its first in operation. Glover said that North American digital generated adjusted EBITDAR losses of $7m. He also said the company expects “losses to narrow as the year progresses, driven by our strong igaming position in New Jersey, Pennsylvania and now Rhode Island”.
In the UK, igaming revenue increased 9% year-over-year. Glover called it the “crown jewel” of its international segment.
The company’s Bally Bet sports betting platform also went live in Massachusetts and Maryland in the last month. Reeves said there are four more market launches planned for the sportsbook by year’s end. He said costs would decline when the platform transitions from in-house tech to services from Kambi and White Hat Gaming.
Analysts cautious about future prospects
In a Truist research note released immediately after the call, the firm noted that the operator’s revenues came short of estimates for all three segments. The biggest factor still undetermined was the one topic not mentioned – the Standard General takeover/merger. As such, the stock maintained a ‘hold’ rating.
“With the takeout offer still likely a year away from closing, we remain hold-rated until more details are provided closer to execution,” analysts wrote. “We lower our 2024 EBITDAR to the low-end of guide, although make no changes to our $18.25 PT, also the takeout price.”