Bally's Corporation

Please stand by, we're about to begin. Good day everyone and welcome to the Bally's Corporation second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. In order to ask a question during that session, please press star 1 on your telephone keypad. Please be advised that today's conference is being recorded and if you require any further assistance, please press star 0. I'd now like to turn the call over to Mr. Charlie Dow, Senior Vice President and Treasurer for Bally's. Please go ahead, sir.

Good afternoon, and thank you for joining us on today's call. The earnings release and presentation that accompanied this call are available in the Investors Relations section of our website at www.bally's.com. With me today are our Chief Executive Officer, Robeson Reeves, our President, George Papineer, and our Chief Financial Officer, Marcus Glover. Before we begin, we would like to remind everyone the comments made by management today will contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Financial results may differ materially from the results discussed in these forward-looking statements. In addition, during today's call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project non-recurring expenses and one-time costs. Finally, I also want to note that we will not be answering questions regarding the press release issued on July 25, 2024, which describes the merger agreement between Bally's and Casino Queen and affiliate of Standard General, as well as the special committee's unanimous recommendation of the merger with cash consideration of $18.25 per share and the opportunity for rollover election by shareholders. The combined company will remain a publicly traded registrant under the Securities Act. We plan to provide an investor presentation on our website at a later date and note that a proxy statement will be filed with the SEC within 45 days of last week's announcement. This call is also being broadcast live on our investor's website and will be available for replay shortly after the completion of this call. With that, I will turn the call to Robeson Reeves, our CEO.

Thank you, Charlie. We're pleased to have you join us today to discuss Bally's 24 second quarter results and provide updates on the long-term growth prospects for our three business segments. Second quarter revenues increased 3% year-over-year, reaching $622 million, reflecting growth in two of our three segments. Our casino and resort segments saw a 3% increase in revenue while revenue from North America Interactive Segment grew a substantial 95%. In the UK, our business continues to perform very strongly, generating a 9% revenue growth increase, while our International Interactive Segment saw an overall 7% revenue decline due to our non-UK operation. Despite the full segment revenue decline, Adjusted EBITDA margins improved approximately 130 basis points year over year. We continue to benefit from the measures we rolled out ahead of the UK white paper implementation and looking forward to the benefits from online sports betting following the soft launch during the quarter. I'll begin today's call with a discussion of Bally's recent announcements before touching on our development pipeline and our interactive businesses. I'll then hand the call over to George, who will discuss our CNR business, and to Marcus, who will provide a more detailed analysis of our quarterly financial performance. As everyone is aware, subsequent to the end of the quarter, we entered into a binding term sheet the $940 million strategic construction and financing arrangement with gaming and leisure properties, which includes funding to complete the construction of our flagship permanent casino in Chicago. With GLPI, we also entered a sell-leaseback transaction for Bally's Kansas City and Shreveport for $395 million and modified our sell-leaseback agreement of our Lincoln property, bringing the total transaction to over $2 billion. This is a key milestone for our Chicago development. George will go into this in more detail, but suffice to say, We are now fully ready to plant our flag in the heart of the city with our Bally's Casino Chicago permanent resort. This permanent resort will benefit from the ongoing ramp of our temporary facility as we're building and evolving customer relationships and establishing our presence with the city's various stakeholders while gaining additional valuable insights into the markets. Though we won't be taking questions regarding this on today's call, I want to address last week's announcement that the company has entered into a definitive merger agreement with the Queen Casino and Entertainment Inc., a regional casino operator with four casinos in three states. This merger will expand our platform and databases while further diversifying the markets in which we operate. Moreover, combining The Queen Casino and Entertainment development pipeline with our own current growth initiatives provides a clear path to increased revenue, cash flow, and value accretion for the company. Turning to Las Vegas, we're moving forward with the demolition of the Tropicana and expect the planned implosion of the hotel tower to occur in October. We remain on track to hand over the nine-acre portion of the site to MLB's Athletics. who plan to begin construction of their new stadium in 25. Importantly, we continue to assess our options for the highly valuable land next to the stadium. In New York, it appears the licensing submission process will occur in June of 25, with the winner to be announced in early 26. We remain extremely excited by the opportunity to develop a world-class integrated resort adjacent Bally's links at Ferry Point in the Bronx, which will add yet another must-see destination in the Big Apple. With all that said, I'll now turn my attention to our International Interactive and North America Interactive segments. Within International Interactive, we continue to generate strong results from the UK business, where we're taking share and benefiting from strategies to acquire customers in a cost-effective manner. The soft launch of online sports betting in the market will prove to be an additional channel for customer acquisition and growth. And we're looking forward to the full scale benefits of this product as the year progresses. Outside of the UK, we're working within our strategy of maximizing profit yield and reducing uneconomic marketing. In Asia, we continue to manage through some issues which are impacting business volumes. While we had seen signs that the region was beginning to stabilize, it now appears likely that challenges will remain for the foreseeable future. It is our view that over time, Asia will stabilize and return to growth. Across Europe, we've seen some growing traction for our offerings, including improvement in Spain following the lifting of advertising restrictions. Our North America Interactive segment again delivered a very strong quarter as we benefited from a full quarter of iGaming in Rhode Island, which launched in March and continued success with our operations in both New Jersey and Pennsylvania. In the quarter, we generated approximately 6.7 million in net gaming revenue in Rhode Island, and this market is still very much in the early innings of its growth trajectory as it only launched in March. Furthermore, with the ongoing successful rollout of value bet across our markets, we're generating improved volumes and profitability, particularly as the transition onto Canby and White Hat platforms has gone a good customer feedback and helped us differentiate our offering. We expect to launch sports in additional four states in the second half of the year and continue to plant the seeds for expanded iGaming across our geographies. Please remember, as you model out North America Interactive results over the balance of the year, we continue to expect to incur an adjusted EBITDA loss of better than 30 million in 24, with losses decreasing in a non-linear fashion. With that, I have a few closing comments before turning it over to George for further details on our operational performance over the last quarter. We have delivered the funding for our Chicago Permanent Casino Resort. We will continue to diligently deliver our development pipeline, including our route to profitability in North America Interactive. And we will maintain our focus on core profitability and growth from CNR and our internationally interactive segments. We look forward to sharing additional milestones with you all again soon. George?