Bally’s lost $61.8 million during the third quarter, though its embattled Bally Bet sports betting app outperformed revenue expectations.
But delayed casino openings, uncertainty around the Oakland A’s relocation and foreign exchange headwinds prompted the company to lower year-end guidance, executives said during a call Wednesday addressing quarterly earnings.
Bally’s stock dropped 11.4% on Wednesday on more than triple its average volume, but it gained some of that loss back on Thursday with the stock at $8.02 at 1:30 pm Eastern.
Bally’s lowers year-end guidance
Bally’s is targeting between $640 million and $655 million in adjusted EBITDAR by the end of the year, down from its previous guidance of $655 million to $700 million. It is also reducing revenue guidance for Q4 by 7%.
It is a stark change from last year when Bally’s had a profitable Q3.
“These changes contemplate the delayed opening of our Chicago Temp facility, the decision not to reinvest in the Tropicana [Las Vegas], and considers the strengthening of the U.S. dollar impact in our FX exposure,” CFO Marcus Glover said.
The company reported $632.5 million in total revenue for the quarter, a 9.4% improvement year over year, but $2.06 million short of its goal.
Early look at Bally Bet 3.0
The North American Interactive segment reported an EBITDA loss of $17.6 million, slightly better than last year’s $19.7 million loss even though it was operating in fewer states. It posted $29.6 million in quarterly revenue, a 33.6% improvement year over year.
Bally Bet is now live in Arizona, Colorado, Ohio and Virginia, where it has switched over to third-party technology, but remains down in Indiana, Iowa and New York. During the call, CEO Robeson Reeves said he hopes to relaunch in at least three more states by the end of the year.
The company has laid off roughly 300 employees as a result of moving to Kambi and White Hat to power its app, Reeves said. He took over in March after the company moved on from $215 million in acquisitions aimed at powering its app in-house.
In its last reporting period before the shutdowns, the segment experienced higher-than-expected losses. Additional losses between $50 million and $60 million are expected in the fourth quarter.
Bally’s iGaming via Bally Bet sports betting
Going forward, the company sees Bally Bet mainly as a tool to position it for when iGaming expands.
“Our marketing efforts will be measured as we look at OSB as a funnel for future iGaming growth opportunities and as an additional way to reach our core casino & resorts customers,” Glover said.
The company is on pace to meet its iGaming market share goal in New Jersey of 6–8%, while results in Pennsylvania, where Bally’s launched in June, “remain encouraging,” Reeves added. He also highlighted Ontario as an opportunity to build the company’s player base.
He highlighted the company’s upcoming iGaming launch in Rhode Island, where it is headquartered and will have a monopoly on online gaming:
“Overall, our iGaming business is already generating positive returns and we’re optimistic of its continued growth and contribution. We are all hands on deck when preparing for the market launch of iGaming in Rhode Island in March 2024,” Reeves said.
Casinos still main focus for Bally’s
Growing their existing casino business remains Bally’s priority in the U.S., executives indicated.
Bally’s reached a deal with the A’s to build a stadium on its Tropicana Las Vegas property in May, but MLB delayed a decision on the team’s relocation until mid-November.
“Remember we bought the Trop for $150 million in cash with a 50-year lease. Now we have the A’s investing $1.5 billion, including $380 million of public funds into this land, which, although we have some short-term pain, this is an extremely valuable asset,” Reeves said.
The company is also preparing to submit a bid for a New York casino at its Ferry Point location, which it bought from the Trump family in September.