Growing Concern Follows Bally's 'Going Concern' Warning

There’s an old saw that when you owe the bank a small amount of money, you have problems. But when you owe the bank a million dollars (or more), it’s the bank that has trouble.

It appears to be a similar situation with Bally’s Corp., which issued a “going concern” warning this August. The stock promptly cratered. Uncertainty immediately surrounded the $8 billion in mega-resort projects to which Bally’s has committed. Bally’s had effectively taken Wall Street hostage and threatened suicide.

But when Casino Reports came calling, defenders, detractors, and even government officials with skin in the game headed for the tall grass. Virtually no one wanted to talk for attribution about Bally’s, least of all Bally’s itself. Yes, that same Bally’s that loudly and repeatedly complains about “inaccurate” media coverage.

Among those conspicuously silent were Bally’s President/CFO George Papanier, Bally’s Chicago General Manager Ryan Coppola, and company press representative Joseph Jaffoni. Also stonewalling Casino Reports were the office of Chicago Mayor Brandon Johnson, as well as Alderman Brendan Reilly, a frequent skeptic. Former CFO Marcus Glover kept mum, as did the main Bally’s underwriter, Gaming & Leisure Properties (GLPI).

The latter may have particular reason to be worried. Bally’s problems constitute an overhang on GLPI, which is heavily committed to Bally’s as a landlord and, in the case of $1.7 billion Bally’s Chicago, financial rescuer.

To add to the soap opera, CFO Mira Mircheva turned in her badge on Aug. 30, resigning for “personal reasons” after slightly more than a year on the job. Preceded down the gangplank by Glover in October 2025 (“to pursue other interests”), Mircheva ceded her portfolio to Papanier, giving Bally’s its third CFO in as many years.

The empire’s new clothes

“There’s a lot of nervousness that this company has taken too much on its plate, thrown a bunch of balls in the air to see what’s stuck,” said a Wall Street source familiar with Bally’s. “The ownership has been not as focused maintaining a level of leverage that would give investors comfort over the long-term sustainability, given the balance sheet.”

Bally’s Corp. was born out of the gambling ambitions of hedge fund manager Soo Kim. Through his Standard General fund, he dabbled in gaming by purchasing then-Aliante Station, a $662 million Station Casinos boondoggle, out of bankruptcy. It was eventually resold to Boyd Gaming, but Kim clearly liked what he saw of the casino business.

In 2016, Standard General began agglomerating interest in a pair of Rhode Island gambling houses that were operating under the Twin River brand, one in Lincoln and one in Tiverton. By 2019, Kim had become chairman of Twin River and was controlling its destiny. He engineered a reverse merger with Dover Downs in Delaware, the beginning of an ambitious expansion program.

From three casinos/racinos, Twin River grew to 10 in 2020, including adding Bally’s Atlantic City. Kim also purchased the Bally’s name from Caesars Entertainment, and Twin River was no more. Although Bally’s continues to refer to the Boardwalk casino as its “flagship,” the ancient gambling den is routinely outgrossed by the former Tropicana in Evansville, Indiana (the best Bally’s performer). In 2025 it was the only money-losing casino in Atlantic City.

Three more casinos were added in 2021, with Bally’s promptly flipping real estate to GLPI to finance its ambitions. Kim turned a neat trick in 2022, when then-Mayor Lori Lightfoot played at considering three candidates for a downtown Chicago casino. Once Bally’s ponied up a $40 million donation to the city, Lightfoot immediately canned her much-touted selection process and awarded the concession to Bally’s hors concours.

Flash forward to today and Bally’s controls 20 second- and third-tier casinos in a plethora of U.S. markets, in addition to those of Star Entertainment in Australia (purchased out of bankruptcy) and Bally’s Newcastle in the United Kingdom. It even owned an arguably fourth-tier casino, the now-retired Belle of Baton Rouge. The latter was a facility so disreputable that Caesars Entertainment CEO Tom Reeg refused to stay there when it was still a Caesars-owned casino. (It has been very successfully replaced with the new Bally’s Baton Rouge.)

Through it all, Kim’s strategy has been a tap dance, buying copiously now in hopes of hitting pay dirt somewhere down the road. But press reports often glowingly refer to his rattletrap collection of casinos as an “empire.” Just how few clothes that empire had became clear in August.

Storm warning

Buried in a mid-August quarterly filing was the caution that Bally’s was at risk of breaching leverage and liquidity covenants with its lenders, barring new financing or some other rabbit being pulled from a Wall Street hat. “The conditions and events raise substantial doubt about the Company’s ability to continue as a going concern,” the company acknowledged. Bally’s stock, never the strongest, lost a third of its value quickly.

This should not have been a surprise. Staggering under $4.5 billion in debt, Bally’s publicly pinned its hopes on a pot of gold at the end of the Windy City rainbow. Bally’s Chicago, a project being built by a company with no high-end or construction experience, was supposed to deliver one-third of the company’s revenue (or $750.9 million in Year One) when opened.

There’s some trouble with that projection, as it would require Bally’s Chicago to do monthly revenue of nearly $62.6 million — a figure wildly unprecedented in Illinois’ casino industry, and in a city where the Bally’s temporary casino has struggled to clear $13 million per month.

Kim even went so far as to proclaim that the resort would be “eating a lot of people’s lunches,” although the temporary casino in Medinah Temple was badly undershooting its financial promises. Fumed Alderman Brian Hopkins, “The amount of money that it's capable of contributing to reduce the pension liability just isn't living up to what was promised.”

If any lunches were being eaten, it was probably Kim’s own. Suburban casino Rivers Des Plaines averages $45 million per month, and Wind Creek Southland does $20 million. No one else rivals them financially.

Shop ’til the company drops

Seemingly a shopaholic of sorts, Kim has grown revenue and cash flow evidently through mad acquisition sprees rather than internal, same-store growth. He has thought nothing of haring off into the U.K., Australia, and even ultra-costly Japan, where deep-pocketed firms like Las Vegas Sands have hesitated to go.

His business model is reminiscent of the waning days of the original, Bernie Goldstein-led regime at Isle of Capri Casinos. That team’s downfall became predictable once Wall Street started pointing out that Isle cash flow was being grown solely by means of opening more and more new properties, not on a same-store basis (an important metric in gaming).

Kim’s borrow-and-spend model met no love at Fitch Ratings, which stonily observed last June, “Leverage is not sustainable at current levels.” Since then, Kim has borrowed another $560 million to start work on $4 billion Bally’s Bronx, pushing the company’s indebtedness past the $5 billion mark.

As The Wall Street Journal chronicled, “Fitch Ratings put a negative outlook on Bally’s already junk-rated credit, citing its heavy borrowing, cash-flow deficits, and uncertainty about financing its developments.”

Although the company does not volunteer profit-and-loss numbers in its quarterly announcements, Bally’s is known to have lost $161.9 million in the first quarter of 2026, followed by $164 million in the second quarter. Cash flow for those six months was $265.9 million in the red, hardly an augury of confidence.

Shot across the bow

A clear indicator of Bally’s difficulties came in early August, when it informed Chicago — and the world — that it was cutting back drastically on construction of the $1.7 billion mega-resort. Out, or being “resequenced” in Kim’s subsequent damage control parlance, were virtually all amenities, including restaurants and hotel rooms. As many as 1,500 workers were threatened with pink slips.

The company’s position is that, by voting to authorize video gaming terminals, or VGTs, in the Second City, Chicago leaders have violated the Host Community Agreement (HCA) inked with the Lightfoot regime. Lost in the discussion has been Bally’s own unilateral retreat from the HCA, when its commitment to 25% female/minority ownership was rescinded rather than clash in court with two wannabe (white) investors from Texas. The latter duo claimed to be victims of discrimination, even though the initial public offering was heavily undersubscribed. Bally’s caved.

Bally’s has maintained that it is committed to a soft opening in early 2027, but what was promised as a game-changing mega-resort has devolved into “slots in a box,” albeit a very big box. Not to put too fine a point on it, Bally’s has put the lower-margin aspects of the resort into a deep freeze, focusing instead of the immediate returns of casino gambling.

Principle or expediency?

Kim’s minions tried to position the radical cutback as a principled stand against VGTs in Chicago, which would admittedly compromise Bally’s Chicago’s main drawing card. But that argument was speedily undercut by the “going concern” warning that came a few days later. Nor did it help Bally’s cause that VGT operator Rick Heidner revealed on Sept. 9 that Bally’s had been in repeated talks with him about investing in or even purchasing his company altogether.

On Sept. 14, in a spectacularly uninformative media presentation, Kim took no questions and offered no new details on Bally’s Chicago but said that “Bally’s has worked diligently and in good faith with the city. … We were over-delivering on our promises.” Reading from canned remarks, Kim’s big reveal was that shareholders in Bally’s would soon be able to receive hard-hat tours of the construction site and marvel at the progress.

"There’s clearly concerns about the types of returns we may see from Chicago. It’s their first real foray into a higher-end project of that magnitude,” our Wall Street expert opined. “Also, city-based property right in the heart of large, urban environment does create some challenges. So that has definitely made investors a little nervous, in terms of how the project will proceed.”

In order to pencil out, Bally’s Chicago would need to generate a return on investment around 15%, or cash flow of $285 million a year. A mere 10%, the expert said, won’t cut it. So it must succeed triumphantly — or else. “It’s certainly not a given that this is going to be a success,” said the source.

Another cloud over the future of Bally’s Chicago is that it stands accused of making ends meet by dint of not paying its bills. Mechanics liens on the order of $3.8 million have been filed by MGM Excavating, alleging that work done on the resort has gone unpaid. The matter is presently before the courts.

‘Half-baked half measure’

Almost lost in the winds of Chicago is the fate of the proposed Bally’s Las Vegas. Hoardings around the former site of Tropicana Las Vegas, seen during the Global Gaming Expo this week, continue to carry renderings of a now-outmoded design for Bally’s Las Vegas. The project is Bally’s in name only at this point. GLPI owns the site, for which Bally’s has leased development rights. And the latest iteration of the project, announced Aug. 19, represents a drastic downscaling of what was originally envisioned. (Shades of Bally’s Chicago.)

In Bally’s latest revision of the concept, intended to be twinned with a baseball stadium for the A’s (presently under construction), there are no hotel rooms. Since one must build at least 200 hotel rooms to go with every casino in Nevada, there would be no casino either. Bally’s Las Vegas is to consist of dining, retail, and an entertainment venue (none of which is a Bally’s specialty or strength), as well as a bizarre double-decking of Las Vegas Boulevard to allow for thousands of parking spaces.

Speaking of parking, Bally’s left the A’s on the hook for a self-parking structure, one costing as much as $100 million.

“It’s not a real plan,” scoffed longtime Bally’s skeptic Scott Roeben, author of the Vital Vegas blog. “It’s a thirsty, cobbled-together, half-baked half measure because they don’t have the resources to fulfill on their commitments. It’s not viable. The latest Bally’s proposal is sheer nonsense and they’re stalling, hoping for some miracle infusion of cash that isn’t coming.”

All of it was meant to be ready by the beginning of the 2028 Major League Baseball season. But Bally’s has no financing at this point, save for some leftover dollars from GLPI, and has already missed its own deadlines to begin construction.

Several questions are raised by the new, cut-price scheme. For one, was gaming-only GLPI consulted before being yoked by Kim to a non-gaming project? (Rival real estate investment trust Vici Properties is much more tractable to mixed-use developments, as a rule.) If it is to consist of third-party retail, dining, and entertainment, what function does Bally’s serve besides providing a catch-all name?

Few in the gaming industry seem to believe the project will be built. Nor do they put any credence in Bally’s $2.2 billion project budget — not when Bellagio broke the $1 billion mark 27 years ago and Las Vegas Strip resorts have not become cheaper since. Roeben called it “a fanciful number, untethered from reality.” As for making its nut off of non-gaming amenities, Roeben thinks Bally’s could do it “to a degree, but nowhere near what they would need to pay GLPI’s rent.”

Boyd to the rescue?

Quo vadis, Bally’s?

“Ultimately there could be a hotel or casino but, given where their balance sheet is, it’s clear that is beyond their capacity at the moment, especially if you want something open for the ’28 season,” said the Wall Street source. “It would make a lot of sense for MGM to buy the property just to kill it. That location could be advantageous to MGM Grand and some of their other properties, in terms of hotel rooms.”

Is Bally’s announced budget realistic? “I don’t think so,” the source said.

Scuttlebutt in Las Vegas briefly had it that Boyd Gaming would bail Bally’s out of its Sin City commitment, for a fire-sale $40 million. But Boyd is a conservative company, and a multi-billion-dollar Strip investment may have been too rich for its budget. Also, Boyd likes to own the real estate upon which it operates.

In a July 23 colloquy with Jefferies Equity Research analyst David Katz, Boyd CEO Keith Smith laid out, generically, Boyd’s project criteria as, “It's got to be strategic, it's got to be the right asset in the right market at the right price. They have to be higher-quality assets.”

Roeben offered a less varnished take on Boyd’s situation, vis-a-vis the Tropicana site: “Should the ballpark be completed, it’s taking up a significant amount of space, precluding the possibility of a profitable resort, mainly because FAA height restrictions won’t allow for enough rooms — they can’t build up. I’m sure Boyd is being hamstrung by these facts. They tend to find ways to bail, regardless, still traumatized by their failed Echelon project.”

At the Tropicana site, Boyd would also be at the sufferance of GLPI. The latter might gain a deeper-pocketed, less-troubled partner, but Boyd appears to have thought better of whatever deal might or might not have been on the table. Bally’s denied that any talks had been conducted.

Bronx cheer

Safe for the moment, apparently, is $4 billion Bally’s Bronx. That mega-project was thought dead several times during New York’s casino-selection process. But better-heeled candidates (including MGM Resorts International) either fell on their swords or were passed over, leaving Bally’s one of the last three contenders standing.

After paying $500 million for the gaming license, plus a $115 million fee owed to the Trump Organization, Bally’s was momentarily becalmed for financing. But on Sept. 14, it disclosed that WhiteHawk Capital was ponying up $560 million for preparatory work on the resort, which is to be built alongside the former Trump Links.

Given the expected size and lucrativeness of the New York market, few on Wall Street expect Bally’s to go begging for the remaining $3.5 billion. If it can’t borrow more, it can always sell tomorrow for the sake of today by giving substantial equity in the project to potential investors, possibly including long-suffering GLPI.

This is one case where Bally’s may not be in over its skis. Said our Wall Street source, “Given the tax rate, given the location, given the high demand in New York — it’s not like Vegas where there’s potentially unlimited amounts of casinos that could pop up — there is interest from a financing perspective.” Even GLPI has expressed willingness to participate, if not jumping in with both feet.

Indeed, Bally’s has outlined several ways out of its current financial morass, including asset sales and issuance of more equity. Does Bally’s have anything left to sell, having peddled away its United States casino “empire”? Our Wall Street source thinks so. It would require shedding Bally’s of its most recent acquisitions, Star Entertainment and Greek lottery purveyor Intralot. But it could be done.

Is the next chapter No. 11?

There is another escape route for Bally’s.

“Soo Kim is a very skilled credit investor who’s very comfortable with bankruptcy,” the Wall Street source advised. “If we fall into a recession or there’s some mis-execution, the bankruptcy risk is very real and that has hurt several companies in the past. Leverage is at a significant level. Can they navigate it? Possibly. But it’s definitely left a lot of investors concerned about the long-term viability” of Bally’s.

Wondered the source, “Is it possible that everything succeeds and we see a natural deleveraging when these [resort] projects are open? It’s possible, but it’s going to be extremely tricky. The amount of leverage just keeps going up.”

The Wall Street veteran wonders why, given its financial situation, Bally’s is even a publicly traded company at this point. “A normal company has an earnings call, goes to conferences, speaks regularly with investors. There’s no public earnings call here. The information is fairly limited. Then let’s not forget the fact that the CFO is leaving.”

As for possibly issuing more equity, as Bally’s has mooted, “There’s a lot of things to work on before you can reasonably have an equity, secondary, or primary sale to investor to expand the investor base.”

Perhaps the resigned, sink-or-swim sentiment was best summed up by Alderman Hopkins in Chicago. To TV station Fox 32, he sighed, "Despite my opposition to Bally’s, you know, we're now tied to them. Their success is our success.”