Bally’s Q4 Earnings Miss Projections, Stock Falls Over 24%
Bally’s had a tough Q4, stock tumbled.
Bally’s Casino stock tumbled after 2024 earnings release. © Piero Villarreal, Unsplash
Key Facts:
- Bally’s 2024 revenue was just a rounding error off of 2023 numbers
- Bally’s Casino operations EBITDAR declined 14% YOY
- Bally’s Interactive, its iGaming division was down 9% in 2024
- Bally’s canceled its earnings call for the second straight quarter.
Bally’s struggled through a busy Q4 as they imploded their Las Vegas strip property, the Tropicana, and continued to build out their $1.7 billion dollar new flagship property in downtown Chicago. All of this happened while in the midst of completing a buyout offer from hedge fund giant Standard General.
Fourth-quarter revenue declined to $580 million, down more than 5% from the year prior. International Interactive had revenue of $214 million. North America Interactive contributed another $41.5 million.
Both the UK and US interactive markets were bright spots in the year. North America was up 24% in the quarter and 58% on the year.
The UK revenue numbers for the quarter were up 11%, but overall interactive business excluding North America declined almost 10% on the year.
While most of the declining revenue numbers could be traced back to Ballys’ Asia interactive markets, in which the company has now divested into an independent operating company, there were also serious declines in the Australian markets.
While North American interactive revenue grew exponentially, the quarter’s EBITDAR number reflected the company’s growing pains, with a loss of $12.3 million.
Bally’s, which has the exclusive rights to iGaming for the entire state of Rhode Island for the next 20 years, launched its casino offerings there in March 2024.
BallyBet and Rhode Island Expansion
Their first month in Rhode Island in April 2024 saw revenue of $2 million, while in January of this year, that number has grown to $54 million. They have also rolled out BallyCasino.com in New Jersey and Pennsylvania. So, the company’s iGaming future looks bright, but it has come at a substantial start-up cost.
They also have BallyBet, their sportsbook app, which, after launching in Tennessee, is now in ten states and will probably expand into other states in 2025. However, there was some drag here, as the fourth quarter proved challenging for sports book operators across the country.
A series of bettor-friendly NFL football outcomes held hold in the single digits for almost all major sportsbook operators, and Bally’s proved no exception. They also consolidated several versions of their sportsbook into one unified platform, which also added to costs YOY.
Drop in Earnings
In the casino and resorts division, the company also faced headwinds as revenue of $1.36 billion in both 2023 and 2024 produced much less EBITDAR this past year, with earnings dropping from $429 million to $370 million.
The fourth quarter fared little better, with a decline in EBITDAR from $94 million in Q4 2023 to $81 million this past quarter, a decline of 14.5%.
Our Chicago Temporary Casino’s results were consistent with prior quarters as they remain below our expectations, though we are hearing from customers that they are increasingly excited by what is starting to happen a few blocks northwest at the permanent site– Robeson Reeves/Bally’s , CEO, 2024 Earnings Release
The temporary Chicago casino continues to perform at about 50% of what had been projected. However, many say it is too early to speculate on the future of the new multi-billion dollar resort that Bally’s is building out in the windy city as the temporary casino lacks hotels, restaurants, and even dedicated parking.
While the Tropicana had not been bringing in huge revenues, the loss of the company’s only Las Vegas property also didn’t help, nor did the lack of any concrete plans to rebuild the new casino around what will hopefully be the new Las Vegas Athletics baseball park.
Rough estimates had the casino at around $140 million in revenue before it was closed last year and then demolished in October.
The company did tout the four new Queen casino properties acquired from the merger with Standard General. Two are in Baton Rouge, another in Marquette, and the fourth in East St. Louis. Combined, they generated more than $57 million in revenue and $15.2 million in EBITDAR in the fourth quarter alone.
One of the Baton Rouge properties and the Marquette property are being converted to land-based casinos instead of riverboat gambling casinos, which should help with continued revenue growth going forward.
The overall reaction to the earnings number was not positive, with the stock sliding more than 24% after the earnings release, which caused the company to cancel the earnings call, which then saw the stock slide another 4% the following trading day.
It remains to be seen if the company finds its footing in the latter half of the year as timelines become clearer for the opening of the permanent Bally’s Chicago and both Bally’s and the Athletics provide more information on their Las Vegas plans.
