Bally’s Corp. hints of plans for Tropicana resort

Bally’s Corp.’s CEO hinted Thursday that the company will be ready to talk about its plans for the Tropicana by the middle of this year.

In prepared remarks Thursday and in response to questions from analysts on the company’s fourth-quarter earnings call, Bally’s CEO Lee Fenton said the company is in advanced discussion with development partners.

“We expect to be in a position to communicate our chosen partners and plans by the half year ahead of completion in early ’23,” Fenton said. “We’re very excited about the potential opportunities, but we’re not actually in a position today to say what those plans are.”

In December, the Tropicana was identified as a possible site for a baseball stadium for the Oakland Athletics. Neither the team nor Bally’s would confirm the report.

Earlier this week, team officials said they have exchanged term sheets on at least four plots of land in Southern Nevada where a possible $1 billion ballpark could be built. The team also is negotiating a prospective stadium site in Oakland.

Bally’s is in the midst of acquiring the Tropicana from real estate investment trust Gaming and Leisure Properties Inc. for $308 million in a deal announced in April. Under terms of the deal, Bally’s would lease the property back from GLPI for $10.5 million a year.

Buyout under consideration

Bally’s also announced this week that it has formed a special committee of independent and disinterested directors to consider a $2.07 billion buyout offer announced in January from New York hedge fund Standard General, founded by Bally’s Corp. chairman Soohyung Kim.

Kim, who has been Bally’s chairman since 2016, also is the company’s largest shareholder.

“Our proposed transaction would allow the company’s stockholders to immediately realize an attractive value, in cash, for their investment and provides stockholders certainty of value for their shares, especially when viewed against the operational risks inherent in the company’s business and the market risks inherent in remaining a public company,” Kim wrote in a note announcing the takeover offer.

The new special committee, formed Tuesday, announced that no decisions have been reached about Kim’s offer.

Providence, Rhode Island-based Bally’s, operators of 14 casinos across 10 states, also owns Gamesys Group, a global, online gaming operator; Bally’s Interactive, a sports betting platform; Monkey Knife Fight, a fast-growing daily fantasy sports site in North America; SportCaller, a global B2B free-to-play game provider; and Telescope Inc., a provider of real-time fan engagement products. It partners with the Sinclair Broadcast Group for programming on the Bally Sports Regional Network.

Start-up costs affect results

For the quarter that ended Dec. 31, Bally’s reported a net loss of $115.3 million, $1.87 a share, on revenue of $547.7 million. That compares with net income of $20.2 million, 62 cents a share, on revenue of $118.1 million in the previous fourth quarter.

For 2021, Bally’s had a net loss of $71.8 million, $1.45 a share, on revenue of $1.322 billion. That compares with a 2020 net loss of $5.5 million, 18 cents a share, on revenue of $372.8 million.

The declines of 2021 were attributed to startup costs for new properties, bad weather, COVID-19 pandemic challenges and a smoking ban imposed at its Shreveport, Louisiana, property.

Bally’s estimates revenue for the year ending Dec. 31 in the range of $2.4 billion to $2.5 billion and adjusted cash flow in the range of $560 million to $580 million.

Bally’s missed analysts’ revenue expectations by about 5 percent for the quarter.

In Thursday trading on the New York Stock Exchange, shares closed up 88 cents, 2.5 percent, to $36.28 a share on volume slightly above average after a sluggish start in the morning. After hours, shares climbed another $1.71, 4.7 percent, to end at around $37.99 a share.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.