Bally's Corporation

Good day and welcome to the Bally's Corporation third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. If you require further assistance, please press star then zero on your telephone keypad. I would now like to turn the call over to Charlie Diao, 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 accompany this call are available at the investor relations section of our website at www.valleys.com. With me today are our chief executive officer, Robeson Reeves, our president, George Papinier, and our chief financial officer, Marcus Glover. Before we begin, we would like to remind everyone that 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 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. As a reminder, given the shareholder proxy process that is outstanding with respect to the special shareholders meeting scheduled for November 19th to consider the Casino Queen merger, we will not be taking questions after the formal comments on this call. This call is also being broadcast live on our investors' website and will be available for replay shortly after the completion of this call. With that, I'll turn the call to Robeson Reeves, our CEO. Thank you, Charlie.

We're pleased to have you join us today as we discuss Bally's 2024 third quarter results and provide updates on our long-term growth initiatives and the prospects of our three business segments. Third quarter revenues declined less than 1% year over year to $630 million. as our casinos and resort segments saw a 2% decrease in revenue, while revenue from the North America interactive segment grew 55%. Our UK interactive business continues to perform very strongly as it generated a 12% increase in revenues. The full international interactive segment saw a 5% revenue decline due to our non-UK operations, Adjusted EBITDA margins for the segment improved approximately 400 basis points year over year. Today, I'll start by sharing key updates on our development pipeline and the latest for our interactive businesses. I'll then hand the call over to George, who will discuss our CNR business, followed by Marcus, who will provide a more detailed review of our quarterly financial performance. As you know, during the quarter, we announced a significant agreement with our partners at Gaming and Leisure Properties, which funds the construction of our flagship permanent casino in downtown Chicago, positioning Bally's to benefit from a strong blend of our local and destination market appeal. Our development site on the banks of the Chicago River is a hive of activity today as demolition and site prep work proceeds at rapid pace in anticipation of the start of construction next year. We're in active discussions with the city regarding its formal approval of the revised master plan for our single phase development and believe this process will last to adhere to our current construction timeline. George will elaborate on the performance of the Chicago Temporary Casino in a moment. But I want to remind investors that we are fully focused on running the existing property with an eye towards growing our player database, planting Bally's flag in the community, and further building the foundation for success once the permanent facility opens. In early October, we hosted a memorable event in Las Vegas to celebrate the legacy of the Tropicana Las Vegas and marked the beginning of an exciting new chapter for this historical site. Significant planning efforts are underway, which will put Bally's in a position to begin our own development efforts concurrently with the A's Stadium construction efforts. Given our planning and preparation, our current pursuit is to have initial portions of the casino, hotel, and retail offerings ready to go once the A's begin playing in their new stadium in 2028. Turning to New York, the process around awarding the new downstate casino licenses remains prolonged. Our current understanding is the state will be accepting bids in late June 2025 and awarding the licenses in early 26. Our proposal to develop a world class integrated resort adjacent to Bally's Links at Ferry Point in the Bronx is positioned to be a very strong contender as it will be an economic growth engine for the Bronx, New York City and state. Having covered CNR developments, I'll now turn my attention to our international interactive and North America interactive segments. International interactive revenue declined 5% to $231 million, but segment level adjusted EBITDA reached $90 million, representing a 5% year-over-year increase. Our UK business remains strong, driven by continued share gains cost-effective customer acquisition, and the ongoing build-out of a robust online sports betting operation. The market also benefited from all-time high active customer levels and robust average revenue per user metrics. Further, we are driving healthy traction for our recently launched online sports betting offerings, including a newly launched Bally's branded product that joins our Jackpot Joy offering. During the quarter, we acquired Aspers Casino Newcastle in the UK, a small land-based casino in Newcastle upon time. While this acquisition is relatively modest within our broader business, we see it as an opportunity to further plant the Bally's brand in the UK and leverage our online player database to drive engagement at a land-based casino, broadening our overall appeal. Outside the UK, we continue to work with our strategy of maximizing profit yield and reducing unprofitable marketing. In Spain, revenue is up 6% year-over-year in a constant currency as we return to growth following the reinstatement of an attractive welcome offer and the reversal of the advertising decree in the country. This momentum continued into October, where we saw healthy double-digit year-over-year growth, last week we announced the separation of our team operating to serve asia and certain other rest of world markets to instead convert to a strictly a licensing royalty model this allows the business unit to operate entirely independently from valleys with more agility and nimbleness we believe this separation will allow our ex-colleagues the license to be more successful in pre-regulated markets while allowing Bally's to monetize high margin license revenue streams. More importantly, this allows Bally's to strategically focus our interactive activities in licensed markets such as the UK, Spain, and our growing presence in North America. Turning to North America Interactive, we generated strong revenue of 46 million with an adjusted EBITDA loss of 11 million. Our iGaming operations in Rhode Island continued to ramp up impressively, contributing $9.7 million in gross gaming revenue, while our other iGaming markets remained steady. Profitability at the market level was moderated by Rhode Island indemnity obligations. Regarding our online sports betting rollout, BallyBet is now live in 10 markets with plans to launch in an additional three states by the end of 24, with additional expansions expected in 25. New Jersey will launch Sports and Monopoly Casino in November, marking the introduction of the brand to the United States. The migration to the White Hat platform will also occur on this day. Overall, we continue to make progress towards positioning our North America interactive business to achieve positive EBITDA. This is in an active and highly productive period for Bally's as we continue to position the business to capitalize on its substantial long-term growth opportunities. The entire team is excited for the future and we look forward to sharing our progress in the coming quarters. George.