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Bally’s confirms $425.5m net loss for 2022


Bally’s Corporation posted a net loss of $425.5m for its 2022 financial year, primarily due to impairment charges, though the operator was able to report a 70.7% increase in revenue.

Earlier this month, Bally’s revealed in its preliminary results that it would likely post a large net loss for the 12 months to December 31 as a result of impairment charges, in particular a $390.7m charge related to its North America interactive business in the fourth quarter.

The final FY net loss was slightly higher than preliminary guidance, though incoming chief executive and current president of interactive, Robeson Reeves, was upbeat about the operator’s wider performance in 2022.

In particular, Reeves picked up on record performances by both the casinos and resorts, and international interactive segments, with this setting up the operator for further growth in 2022.

“As previously reported in our preliminary release of these financial results, we are pleased to have achieved record results in both our casinos and resorts and international interactive segments,” Reeves said.

“Our core businesses continue to generate fantastic cash flows. UK revenue grew 12% organically in the fourth quarter as regulations continue to play through, while in December, Asia saw positive year-over-year organic growth, proving that our initiatives to maintain a competitive advantage in that market are effective.

“We remain committed to taking a deep dive approach in North America to ensure that investments we make in sports have a near-term path to profitability. In icasino states, we’ve increased our market share in both New Jersey and Ontario as we integrate this business in a scalable way.”

Fourth quarter

Taking a closer look at Bally’s performance in the fourth quarter, where the majority of the impairment charges took place, revenue in the final three months of the year amounted to $576.7m, up 5.3% year-on-year.

Breaking this down, $461.6m of revenue was attributed to gaming operations, up by 0.6% year-on-year, while non-gaming revenue increased 29.8% to $115.1m.

Some $319.2m of all revenue came from casinos and resorts, while $231.2m was generated from the international interactive business and also $26.3m North America interactive.

Turning to costs, operating expenses increased 74.2% to $1.03bn, mainly due to $464.0m in impairment charges. Some $390.7m was put down to annual goodwill and asset impairment analysis in the North America interactive segment, primarily related to the Bet.Works and Monkey Knife Fight acquisitions

A further non-cash impairment charge of $73.3m in the international interactive segment related to a long-standing indefinite lived trademark acquired as part of the Gamesys acquisition that is being deemphasized for other newer brands in Asia and rest of world.

After accounting for $62.9m in other expenses, this left a pre-tax loss of $487.5m for the quarter, compared to $115.3m in the previous year. Bally’s received $29.9m in income tax benefits, with net loss as a result reaching $487.5m, wider than $115.3m in 2021.

However, Bally’s did note that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter was 22.8% higher year-on-year at $145.8m.

Full year

Looking at the full year, revenue was 70.7% higher at $2.26bn. This included $1.85bn from gaming operations, up 75.3%, while non-gaming revenue also increased by 52.3% to $409.6m.

Casinos and resorts revenue for the 12-month period reached $1.23bn, with international interactive revenue at $946.4m and North America interactive revenue $81.7m.

In terms of costs, operating expenses were 107.4% higher at $2.55bn, with spending higher across all areas, though other costs were 24.0% lower at $161.5m.

Pre-tax loss stood at $454.5m, compared to $119.1m in 2021, while after accounting for a tax benefit of $28.9m, this left a total net loss of $425.5m, in contrast to the $114.7m loss in the previous year.

Bally’s also noted that adjusted EBITDA in 2022 was up 66.3% to $548.5m.

Job losses

Confirmation of the FY and Q4 results comes after Bally’s last month announced it was to cut 15% of the workforce from its North America interactive division as part of a restructuring plan for the segment.

In a filing with the US Securities and Exchange Commission, Bally’s said the layoffs would help it reduce operating costs and continue its commitment to achieving profitable operations in its North American interactive segment.

Bally’s said the elimination of positions within the interactive business are subject to local law and consultation requirements in certain countries, as well as the operator’s business needs.

The operator added that the 15% reduction in staff headcount for the division would cost between $10.0m and $15.0m in cash severance payments, with the redundancies to take place during the first quarter.