Bally's Warns Of 'Substantial Doubt' In Ability To Stay Afloat

Bally’s says there is “substantial doubt” about its ability to keep operating as it seeks new financing, a move that sent its stock tumbling.

Bally’s Corp. revealed the new risks in its second-quarter results, published after markets closed Friday.

‘Substantial doubts’

The business said its creditors “conditionally waived compliance” with a covenant that required it to keep the ratio of its debts to its assets under a certain level. If the covenant were restored, however, Bally’s said it may not be able to meet the required ratio and could also fail to meet other requirements about the level of liquid assets it must have on hand.

Because of this, Bally’s is looking for alternative funding. With none yet secured, it warned investors of a risk that it could fail.

“While the Company is actively engaged in discussions on several financing alternatives, the conditions and events raise substantial doubt about the Company’s ability to continue as a going concern,” Bally’s said.

The company said it had executed a non-binding term sheet for a loan to fund further development of its Bally’s Bronx project. It indicated the parties are working toward a binding commitment, but as the term sheet is not binding, the plans “do not alleviate substantial doubt about the Company’s ability to continue as a going concern.”

Big debts

Bally’s piled up debts during a period of rapid expansion, both through acquisitions and new projects. Last year, the business merged with Queen Casino and also merged its online business with Greek lottery operator Intralot. The latter deal gave Bally’s Corp. a majority stake in the new Bally’s Intralot business, and with that, Intralot’s debts became part of its balance sheet. The business is currently developing or building new casinos in Chicago, the Bronx, and Las Vegas, each of which have added more debt to the company.

After being taken private in 2024, the company launched an Initial Public Offering last year, putting its shares back on the stock exchange in an effort to raise money for the Chicago casino project.

The Bally’s balance sheet shows debts of $8.6 billion. While Bally’s has $10.8 billion of assets, more than $8 billion of those are intangible assets, goodwill, or right-of-use assets, which cannot be easily turned to cash if needed.

In the three months to June 30, Bally’s paid $119 million in interest costs, or 15% of its revenue.

Bally’s shares plummeted Monday as the stock market reacted to the news, by as much as 30% to $9.71 before a slight recovery. As of 10:50 a.m. Tuesday, the stock was trading at $10.00, valuing Bally’s at $499.7 million. In October, the company was valued at $1.04 billion. As recently as 2024, it was valued at $4.6 billion in a takeover by Standard General, which still owns a majority stake in the business.