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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-38850
blys_lg_rgb_pos_210420.jpg
Bally’s Corporation
(Exact name of registrant as specified in its charter)

Delaware20-0904604
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
100 Westminster Street
Providence,RI02903
(Address of principal executive offices)(Zip Code)
(401) 475-8474
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, $0.01 par valueBALYNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes       No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No  
As of April 26, 2024, the number of shares of the registrant’s $0.01 par value common stock outstanding was 40,484,950.
For additional information regarding the Company’s shares outstanding, refer to Note 16 “Stockholders’ Equity.”



BALLY’S CORPORATION


2


PART I.    FINANCIAL INFORMATION
ITEM 1.    Financial Statements
BALLY’S CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands, except share data)
March 31,
2024
December 31,
2023
Assets 
Cash and cash equivalents$169,356 $163,194 
Restricted cash141,533 152,068 
Accounts receivable, net66,931 70,328 
Inventory15,719 14,629 
Tax receivable32,491 62,215 
Prepaid expenses and other current assets110,107 108,096 
Assets held for sale 1,815 
Total current assets536,137 572,345 
Property and equipment, net1,100,733 1,174,888 
Right of use assets, net1,144,815 1,160,288 
Goodwill1,914,853 1,935,803 
Intangible assets, net1,812,638 1,871,428 
Deferred tax asset13,245 36,034 
Other assets113,575 110,317 
Total assets$6,635,996 $6,861,103 
Liabilities and Stockholders’ Equity
Current portion of long-term debt$19,450 $19,450 
Current portion of lease liabilities53,216 54,842 
Accounts payable59,401 69,161 
Accrued income taxes41,150 78,301 
Accrued and other current liabilities702,560 651,719 
Liabilities related to assets held for sale 1,307 
Total current liabilities875,777 874,780 
Long-term debt, net 3,660,920 3,643,185 
Long-term portion of financing obligation200,000 200,000 
Long-term portion of lease liabilities1,139,685 1,148,407 
Deferred tax liability150,520 125,590 
Commercial rights liabilities62,503 113,626 
Other long-term liabilities96,786 119,661 
Total liabilities6,186,191 6,225,249 
Commitments and contingencies (Note 17)
Stockholders’ equity:
Common stock ($0.01 par value, 200,000,000 shares authorized; 40,483,375 and 39,973,202 shares issued; 40,483,375 and 39,973,202 shares outstanding)
405 400 
Preferred stock ($0.01 par value; 10,000,000 shares authorized; no shares outstanding)
  
Additional paid-in-capital1,402,384 1,400,479 
Treasury stock, at cost, no shares outstanding as of March 31, 2024 and December 31, 2023
  
Accumulated deficit(729,809)(555,895)
Accumulated other comprehensive loss(223,603)(209,558)
Total Bally’s Corporation stockholders’ equity449,377 635,426 
Non-controlling interest428 428 
Total stockholders’ equity449,805 635,854 
Total liabilities and stockholders’ equity$6,635,996 $6,861,103 
See accompanying notes to condensed consolidated financial statements.
3


BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(In thousands, except per share data)


Three Months Ended March 31,
 20242023
Revenue: 
Gaming$516,057 $486,895 
Non-gaming102,425 111,825 
Total revenue618,482 598,720 
Operating (income) costs and expenses:
Gaming236,144 217,661 
Non-gaming48,111 52,344 
General and administrative248,436 251,608 
Gain from sale-leaseback, net (374,186)
Depreciation and amortization159,746 74,561 
Total operating costs and expenses692,437 221,988 
(Loss) income from operations(73,955)376,732 
Other (expense) income:
Interest expense, net(73,131)(63,264)
Other non-operating income, net4,554 2,610 
Total other expense, net(68,577)(60,654)
(Loss) income before income taxes(142,532)316,078 
Provision for income taxes31,382 137,742 
Net (loss) income$(173,914)$178,336 
Basic (loss) earnings per share$(3.61)$3.28 
Weighted average common shares outstanding - basic48,119 54,420 
Diluted (loss) earnings per share$(3.61)$3.24 
Weighted average common shares outstanding - diluted48,119 55,089 
See accompanying notes to condensed consolidated financial statements.
4

BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)
(In thousands)


Three Months Ended March 31,
20242023
Net (loss) income$(173,914)$178,336 
Other comprehensive (loss) income:
Foreign currency translation adjustments(37,794)52,073 
Net unrealized derivative gain on cash flow hedges, net of tax12,283  
Net unrealized derivative gain on net investment hedges, net of tax11,466  
Other comprehensive (loss) income(14,045)52,073 
Total comprehensive (loss) income$(187,959)$230,409 



See accompanying notes to condensed consolidated financial statements.

5

BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)
(In thousands, except share data)


 Common StockAdditional
Paid-in Capital
Treasury
Stock
Accumulated DeficitAccumulated Other Comprehensive LossNon-controlling InterestTotal Stockholders’
Equity
 Shares OutstandingAmount
Balance as of December 31, 202339,973,202 $400 $1,400,479 $ $(555,895)$(209,558)$428 $635,854 
Issuance of restricted stock and other stock awards423,805 4 (2,778)— — — — (2,774)
Share-based compensation— — 3,058 — — — — 3,058 
Settlement of consideration86,368 1 (125)— — — — (124)
Other — — 1,750 — — — — 1,750 
Other comprehensive loss— — — — — (14,045)— (14,045)
Net loss— — — — (173,914)— — (173,914)
Balance as of March 31, 202440,483,375 $405 $1,402,384 $ $(729,809)$(223,603)$428 $449,805 

 Common StockAdditional
Paid-in Capital
Treasury
Stock
Accumulated DeficitAccumulated Other Comprehensive LossNon-controlling InterestTotal Stockholders’
Equity
 Shares OutstandingAmount
Balance as of December 31, 202246,670,057 $466 $1,636,366 $ $(535,373)$(295,640)$428 $806,247 
Issuance of restricted stock and other stock awards124,050 1 (1,332)— — — — (1,331)
Share-based compensation— — 6,040 — — — — 6,040 
Retirement of treasury shares— (10)(35,987)19,753 16,244 — —  
Share repurchases(1,026,343)— — (19,753)— — — (19,753)
Other comprehensive income— — — — — 52,073 — 52,073 
Net income— — — — 178,336 — — 178,336 
Balance as of March 31, 202345,767,764 $457 $1,605,087 $ $(340,793)$(243,567)$428 $1,021,612 
See accompanying notes to condensed consolidated financial statements.
6

BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended March 31,
(in thousands)20242023
Cash flows from operating activities:  
Net (loss) income $(173,914)$178,336 
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization159,746 74,561 
Non-cash lease expense14,222 13,972 
Share-based compensation3,058 6,040 
Amortization of debt discount and debt issuance costs2,877 2,766 
Gain on sale-leaseback (374,186)
Gain on extinguishment of debt (4,044)
Deferred income taxes26,890 58,818 
Net gain on assets and liabilities measured at fair value(3,461)(310)
Gain on equity method investments(555)(2,100)
Change in value of commercial rights liabilities 267 
Change in contingent consideration payable(1,835)1,206 
Foreign exchange (gain) loss(2,816)4,308 
Other operating activities1,877 (693)
Changes in operating assets and liabilities(33,943)24,947 
Net cash used in operating activities(7,854)(16,112)
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired208 (38,243)
Proceeds from sale-leaseback 411,000 
Capital expenditures(28,053)(43,678)
Cash paid for capitalized software(13,583)(7,143)
Acquisition of gaming licenses(1,211)(1,900)
Other investing activities(762)(400)
Net cash (used in) provided by investing activities(43,401)319,636 
Cash flows from financing activities:
Issuance of long-term debt135,000  
Repayments of long-term debt(119,863)(152,483)
Deferred payables42,195  
Share repurchases  (19,753)
Other financing activities(6,005)(1,332)
Net cash provided by (used in) financing activities51,327 (173,568)
Effect of foreign currency on cash and cash equivalents(4,445)2,819 
Change in cash and cash equivalents and restricted cash held for sale (1,097)
Net change in cash and cash equivalents and restricted cash(4,373)131,678 
Cash and cash equivalents and restricted cash, beginning of period315,262 265,184 
Cash and cash equivalents and restricted cash, end of period$310,889 $396,862 
7

BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended March 31,
(in thousands)20242023
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized$100,128 $82,724 
Income taxes paid, net of refunds(10,410)6,113 
Non-cash investing and financing activities:
Unpaid property and equipment$18,854 $32,095 
Bally’s Chicago - land development liability956 142,567 
Unpaid internally developed software633  
Investment in GLP Capital, L.P. 14,412 
Investment in RI Joint Venture 17,832 



March 31,December 31,
Reconciliation of cash and cash equivalents and restricted cash:20242023
Cash and cash equivalents$169,356 $163,194 
Restricted cash141,533 152,068 
Total cash and cash equivalents and restricted cash$310,889 $315,262 

See accompanying notes to condensed consolidated financial statements.
8

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


1.    GENERAL INFORMATION

Description of Business

Bally’s Corporation (the “Company,” or “Bally’s”) is a global gaming, hospitality and entertainment company with casinos and resorts and online gaming (“iGaming”) businesses. The Company owns and manages the following properties within its Casinos & Resorts reportable segment:
Casinos & ResortsLocationTypeBuilt/Acquired
Bally’s Twin River Lincoln Casino Resort (“Bally’s Twin River”)
Lincoln, Rhode IslandCasino and Resort2004
Bally’s Arapahoe Park
Aurora, ColoradoRacetrack/OTB Site2004
Hard Rock Hotel & Casino Biloxi (“Hard Rock Biloxi”)(2)
Biloxi, MississippiCasino and Resort2014
Bally’s Tiverton Casino & Hotel (“Bally’s Tiverton”)(2)
Tiverton, Rhode IslandCasino and Hotel2018
Bally’s Dover Casino Resort (“Bally’s Dover”)(2)
Dover, DelawareCasino, Resort and Raceway2019
Bally’s Black Hawk(1)(2)
Black Hawk, ColoradoThree Casinos2020
Bally’s Kansas City Casino (“Bally’s Kansas City”)
Kansas City, MissouriCasino2020
Bally’s Vicksburg Casino (“Bally’s Vicksburg”)
Vicksburg, MississippiCasino and Hotel2020
Bally’s Atlantic City Casino Resort (“Bally’s Atlantic City”)
Atlantic City, New JerseyCasino and Resort2020
Bally’s Shreveport Casino & Hotel (“Bally’s Shreveport”)
Shreveport, LouisianaCasino and Hotel2020
Bally’s Lake Tahoe Casino Resort (“Bally’s Lake Tahoe”)
Lake Tahoe, NevadaCasino and Resort2021
Bally’s Evansville Casino & Hotel (“Bally’s Evansville”)(2)
Evansville, IndianaCasino and Hotel2021
Bally’s Quad Cities Casino & Hotel (“Bally’s Quad Cities”)(2)
Rock Island, IllinoisCasino and Hotel2021
Tropicana Las Vegas Casino and Resort (“Tropicana Las Vegas”)(2)(4)
Las Vegas, NevadaCasino and Resort2022
Bally’s Chicago Casino (“Bally’s Chicago”)(3)
Chicago, IllinoisCasino2023
Bally’s Golf Links at Ferry Point (“Bally’s Golf Links”)Bronx, New YorkGolf Course2023
__________________________________
(1)    Includes Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino.
(2)    Properties leased from Gaming and Leisure Properties, Inc. (“GLPI”). Refer to Note 15 “Leases” for further information.
(3)    Temporary casino facility as permanent casino resort is constructed.
(4)    This property closed on April 2, 2024 as part of a plan to redevelop the site with a state-of-the-art integrated resort and ballpark.

The Company’s International Interactive reportable segment primarily includes the interactive activities in Europe and Asia of Gamesys Group Ltd. (“Gamesys”), an iCasino and online bingo platform provider and operator.

The North America Interactive reportable segment includes a portfolio of sports betting, iGaming, and free-to-play gaming brands, and the North American operations of Gamesys.

Refer to Note 18 “Segment Reporting” for further information.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and entities the Company identifies as variable interest entities (“VIEs”), of which the Company is determined to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year’s presentation. The financial statements of our foreign subsidiaries are translated into US Dollars (“USD”) using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in net loss.

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BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of the SEC’s Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates.

Equity Method Investments

On January 1, 2023, the Company and International Game Technology PLC (“IGT”) contributed certain tangible assets and leases to Rhode Island VLT Company, LLC (the “RI Joint Venture”) in exchange for equity interests of the RI Joint Venture. The Company contributed video lottery terminals (“VLTs”) and player tracking equipment to the joint venture for a 40% equity interest of the RI Joint Venture. The 40% ownership in the joint venture qualifies for equity method accounting. In addition to this joint venture, the Company also has other investments in unconsolidated subsidiaries, which are accounted for using equity method accounting. The Company records its share of net income or loss within “Other non-operating income, net” in the condensed consolidated statements of operations. For the three months ended March 31, 2024 and 2023, the Company recorded a gain on equity method investments of $0.6 million and $2.1 million, respectively.

Variable Interest Entities

The Company evaluates entities for which control is achieved through means other than voting rights to determine if it is the primary beneficiary of a VIE. An entity is a VIE if it has any of the following characteristics (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support (ii) equity holders, as a group, lack the characteristics of a controlling financial interest or (iii) the entity is structured with non-substantive voting rights. The primary beneficiary of the VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company consolidates its investment in a VIE when it determines that it is its primary beneficiary.

In determining whether it is the primary beneficiary of the VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities and significance of the Company’s investment and other means of participation in the VIE’s expected profits/losses. Significant judgments related to these determinations include estimates about the current and future fair values and performance of assets held by these VIEs and general market conditions.

Management has analyzed and concluded that Breckenridge Curacao B.V. (“Breckenridge”) is a VIE because it does not have sufficient equity investment at risk. The Company has determined that it is the primary beneficiary and consolidates the VIE because (a) although the Company does not control all decisions of Breckenridge, the Company has the power to direct the activities of Breckenridge that most significantly impact its economic performance through various contracts with the entity and (b) the nature of these agreements between Breckenridge and the Company provides the Company with the obligation to absorb losses and the right to receive benefits based on fees that are based upon off-market rates and commensurate to the level of services provided. The Company receives significant benefits in the form of fees that are not at market and commensurate to the level of services provided. As a result, the Company consolidates all of the assets, liabilities and results of operations of Breckenridge and its subsidiaries in the accompanying condensed consolidated financial statements. As of March 31, 2024 and December 31, 2023, Breckenridge had total assets of $154.9 million and $161.3 million, respectively, and total liabilities of $85.5 million and $87.7 million, respectively. Breckenridge had revenues of $61.9 million and $84.0 million for the three months ended March 31, 2024 and 2023, respectively.

The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The Company performs this analysis on an ongoing basis.

10

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents includes cash balances and highly liquid investments with an original maturity of three months or less. Restricted cash includes cash collateral in connection with amounts due to the Chicago Tribune (refer to Note 8 “Property and Equipment”), player deposits, payment service provider deposits, and VLT and table games related cash payables to certain states where we operate, which are unavailable for the Company’s use.

Accounts Receivable, Net

Accounts receivable, net consists of the following:
March 31,December 31,
(in thousands)20242023
Amounts due from Rhode Island and Delaware(1)
$14,791 $13,028 
Gaming receivables25,427 26,127 
Non-gaming receivables33,131 37,221 
Accounts receivable73,349 76,376 
Less: Allowance for credit losses(6,418)(6,048)
Accounts receivable, net$66,931 $70,328 
__________________________________
(1)    Represents the Company’s share of VLT and table games revenue for Bally’s Twin River and Bally’s Tiverton due from the State of Rhode Island and for Bally’s Dover from the State of Delaware.

Deferred Payables

In order to execute on its strategy of improving working capital efficiency, the Company will, from time to time, participate in trade finance or deferred payable initiatives, including programs that may securitize or accelerate liquidity realized from receivables, or alternatively extend trade terms with certain suppliers or vendors. In certain cases, where the Company is not able to extend payment terms directly with suppliers or vendors, the Company will consider deferred payable solutions that simulate such trade term extensions. These solutions generally involve entering into exchange agreements with intermediary institutions who will make payment to the supplier or vendor within the original terms on behalf of the Company, in exchange for a new bill with terms that conforms to the Company’s payment policy of net 90 days. The Company will then pay the new bill to the intermediary institutions, inclusive of any embedded premium, which the Company records as Interest expense, net, within three months or less. Amounts outstanding under these deferred payable arrangements were $41.9 million as of March 31, 2024 and are included in Accrued and other current liabilities on the condensed consolidated balance sheets. For the three months ended March 31, 2024, the Company incurred $0.8 million of interest expense under these arrangements. There was no interest expense incurred under these arrangements for the three months ended March 31, 2023.

Gaming Expenses

Gaming expenses include, among other things, payroll costs and expenses associated with the operation of VLTs, slots and table games, including gaming taxes payable to jurisdictions in which the Company operates outside of Rhode Island and Delaware, and marketing costs directly associated with the Company’s iGaming products and services. These marketing expenses are included within Gaming expenses in the condensed consolidated statements of operations and were $46.2 million and $45.9 million for the three months ended March 31, 2024 and 2023, respectively. Gaming expenses also include racing expenses comprised of payroll costs, off track betting (“OTB”) commissions and other expenses associated with the operation of live racing and simulcasting.

Advertising Expense

The Company expenses advertising costs as incurred. For the three months ended March 31, 2024 and 2023, advertising expense was $5.6 million and $5.4 million, respectively. Advertising costs are included in “General and administrative” on the condensed consolidated statements of operations.

11

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Share-Based Compensation

The Company recognized total share-based compensation expense of $3.1 million and $6.0 million for the three months ended March 31, 2024 and 2023, respectively. The total income tax benefit for share-based compensation arrangements was $0.8 million and $1.6 million for the three months ended March 31, 2024 and 2023, respectively.

Strategic Partnership - Sinclair Broadcast Group

In 2020, the Company and Sinclair Broadcast Group, Inc. (“Sinclair”) entered into a Framework Agreement (the “Framework Agreement”), which provides for a long-term strategic relationship between Sinclair and the Company. Under the Framework Agreement, the Company issued warrants and options and agreed to share tax benefits and received naming, integration and other rights, including access to Sinclair’s Tennis Channel, Stadium Sports Network and STIRR streaming service. Under a Commercial Agreement (the “Commercial Agreement”) contemplated by the Framework Agreement, the Company paid annual fees to Diamond Sports Group (“Diamond”), a Sinclair subsidiary, for naming rights over Diamond’s regional sports networks (“RSNs”) and other consideration.

The Company accounted for this relationship as an asset acquisition in accordance with the “Acquisition of Assets Rather Than a Business” subsections of ASC 805-50, Business Combinations—Related Issues, using a cost accumulation model. The total intangible asset (“Commercial rights intangible asset”) represents the present value of the naming rights fees and other consideration, including the fair value of the warrants and options, and an estimate of the tax-sharing payments, each explained below. The Commercial rights intangible asset, net of accumulated amortization, was $218.2 million and $225.9 million as of March 31, 2024 and December 31, 2023, respectively. Amortization was $7.8 million and $7.7 million for the three months ended March 31, 2024 and 2023, respectively. Refer to Note 9 “Goodwill and Intangible Assets” for further information.

The present value of the naming rights fees was recorded as part of intangible assets, with a corresponding liability, which will be accreted through interest expense. As of December 31, 2023, the total value of the liability was $57.7 million, with $8.0 million recorded within “Accrued and other current liabilities” related to the short-term portion of the liability, and $49.7 million related to the long-term portion of the liability reflected as “Commercial rights liability” in the condensed consolidated balance sheets. Accretion expense reported in “Interest expense, net” in our condensed consolidated statements of operations was $1.1 million for the three months ended March 31, 2023. In the first quarter of 2024, the Company’s obligation to pay Diamond for the naming rights terminated upon the bankruptcy court’s approval of certain settlement terms, which the court approved on March 1, 2024. Refer to Note 17 “Commitments and Contingencies” for further information.

Under the Framework Agreement, the Company issued to Sinclair (i) an immediately exercisable warrant to purchase up to 4,915,726 shares of the Company at an exercise price of $0.01 per share (“the Penny Warrants”), (ii) a warrant to purchase up to a maximum of 3,279,337 additional shares of the Company at a price of $0.01 per share subject to the achievement of various performance metrics (the “Performance Warrants”), and (iii) an option to purchase up to 1,639,669 additional shares in four tranches with purchase prices ranging from $30.00 to $45.00 per share, exercisable over a seven-year period beginning on the fourth anniversary of the November 18, 2020 closing (the “Options”). The exercise and purchase prices and the number of shares issuable upon exercise of the warrants and options are subject to customary anti-dilution adjustments.

The Penny Warrants and Options are equity classified instruments under ASC 815. The fair value of the Penny Warrants approximates the fair value of the underlying shares and was $150.4 million on November 18, 2020 at issuance, and was recorded to “Additional paid-in-capital” in the condensed consolidated balance sheets, with an offset to the Commercial rights intangible asset.

The Performance Warrants are accounted for as a derivative liability because the underlying performance metrics represent an adjustment to the settlement amount that is not indexed to the Company’s own stock and thus equity classification is precluded under ASC 815. Refer to Note 11 “Fair Value Measurements” for further information.

Under the Framework Agreement, the Company agreed to share 60% of the tax benefits it realizes from the Penny Warrants, Options, Performance Warrants and other related payments. Changes in the estimate of the tax benefit to be realized and tax rates in effect at the time, among other changes, are treated as an adjustment to the intangible asset. The liability for these obligations was $17.7 million and $19.1 million as of March 31, 2024 and December 31, 2023, respectively, and is reflected in Commercial rights liabilities within our condensed consolidated balance sheets.

12

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Provision for Income Taxes

During the three months ended March 31, 2024 and 2023, the Company recorded a provision for income tax of $31.4 million, at an effective year to date tax rate of (22.0)% and a provision for income tax of $137.7 million, at an effective year to date tax rate of 43.6%, respectively. The 2024 year to date effective tax rate differed from the US federal statutory tax rate of 21%, creating a provision for income tax on the Company’s Loss before income taxes, largely due to an increase in the valuation allowance, coupled with a tax liability for foreign discrete items. The 2023 year to date effective tax rate was higher than the US federal statutory tax rate of 21%, largely due to an increase in the valuation allowance and a tax liability for a discrete item related to the deferred gain on sale leaseback transactions in Mississippi and Rhode Island.

3.    CONSOLIDATED FINANCIAL INFORMATION

General and Administrative Expense

Amounts included in General and administrative for the three months ended March 31, 2024 and 2023 were as follows:
Three Months Ended
March 31,
(in thousands)20242023
Advertising, general and administrative$224,971 $221,005 
Acquisition and integration4,852 13,781 
Restructuring 18,613 16,822 
Total general and administrative$248,436 $251,608 

Other Non-Operating Income, Net

Amounts included in Other non-operating income, net for the three months ended March 31, 2024 and 2023 were as follows:
Three Months Ended
March 31,
(in thousands)20242023
Change in value of commercial rights liabilities$ $(267)
Net gain on equity method investments555 2,100 
Gain on extinguishment of debt 4,044 
Foreign exchange gain (loss)2,816 (4,308)
Other, net1,183 1,041 
Total other non-operating income, net$4,554 $2,610 


4.    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Standards to Be Implemented

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in this update align the requirements in the ASC to the SEC’s regulations. The effective date for each amended topic in the ASC is the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. If by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. The Company is currently in the process of evaluating the impact of this amendment on its condensed consolidated financial statements and related disclosures.

13

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. The amendments in this update enhance the disclosures required for significant segment expenses on an annual and interim basis. The guidance will apply retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024. The Company is currently in the process of evaluating the impact of this amendment on its condensed consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The amendments in this update enhance the transparency and decision usefulness of income tax disclosures. This update will be effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently in the process of evaluating the impact of this amendment on its condensed consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements. This amendment to the Codification removes references to various Concepts Statements. This update will be effective for public business entities for fiscal years beginning after December 15, 2024, with early adoption permitted if adopted as of the beginning of the fiscal year that includes that interim period. The Company is currently in the process of evaluating the impact of this amendment on its condensed consolidated financial statements and related disclosures.

5.    REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, which requires companies to recognize revenue in a way that depicts the transfer of promised goods or services. In addition, the standard requires more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company generates revenue from four principal sources: (1) gaming (which includes retail gaming, online gaming, sports betting and racing), (2) hotel, (3) food and beverage and (4) retail, entertainment and other.

The Company determines revenue recognition through the following steps:
Identify the contract, or contracts, with the customer;
Identify the performance obligations in the contract;
Determine the transaction price;
Allocate the transaction price to performance obligations in the contract; and
Recognize revenue when or as the Company satisfies performance obligations by transferring the promised goods or services.

The amount of revenue recognized by the Company is measured at the transaction price or the amount of consideration that the Company expects to receive through satisfaction of the identified performance obligations.

Retail gaming, online gaming and sports betting revenue, each as described below, contain two performance obligations. Retail gaming transactions have an obligation to honor the outcome of a wager and to pay out an amount equal to the stated odds, including the return of the initial wager, if the customer receives a winning hand. These elements of honoring the outcome of the hand of play and generating a payout are considered one performance obligation. Online gaming and sports betting represent a single performance obligation for the Company to operate contests or games and award prizes or payouts to users based on results of the arrangement. Revenue is recognized at the conclusion of each contest, wager or wagering game hand. Incentives can be used across online gaming products. The Company allocates a portion of the transaction price to certain customer incentives that create material future customer rights and are a separate performance obligation. In addition, in the event of a multi-stage contest, the Company will allocate transaction price ratably from contest start to the contest’s final stage. Racing revenue is earned through advance deposit wagering which consists of patrons wagering through an advance deposit account. Each wagering contract contains a single performance obligation.

The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered. The transaction price for racing operations, inclusive of live racing events conducted at the Company’s racing facilities, is the commission received from the pari-mutuel pool less contractual fees and obligations primarily consisting of purse funding requirements, simulcasting fees, tote fees and certain pari-mutuel taxes that are directly related to the racing operations. The transaction price for hotel, food, beverage, retail, entertainment and other is the net amount collected from the customer for such goods and services. Hotel, food, beverage, retail, entertainment and other services have been determined to be separate, stand-alone performance obligations and revenue is recognized as the good or service is transferred at the point in time of the transaction.
14

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


The following contains a description of each of the Company’s revenue streams:

Gaming Revenue

Retail Gaming

The Company recognizes retail gaming revenue as the net win from gaming activities, which is the difference between gaming inflows and outflows, not the total amount wagered. Progressive jackpots are estimated and recognized as revenue at the time the obligation to pay the jackpot is established. Gaming revenues are recognized net of certain cash and free play incentives.

Gaming services contracts have two performance obligations for those customers earning incentives under the Company’s player loyalty programs and a single performance obligation for customers who do not participate in the programs. The Company applies a practical expedient to account for its gaming contracts on a portfolio basis as such wagers have similar characteristics and the Company reasonably expects the impact on the consolidated financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from the application of an individual wagering contract. For purposes of allocating the transaction price in a wagering contract between the wagering performance obligation and the obligation associated with incentives earned under loyalty programs, the Company allocates an amount to the loyalty program contract liability based on the stand-alone selling price of the incentive earned for a hotel room stay, food and beverage or other amenity. The performance obligation related to loyalty program incentives are deferred and recognized as revenue upon redemption by the customer. The amount associated with gaming wagers is recognized at the point the wager occurs, as it is settled immediately.

Gaming revenue includes the share of VLT revenue for Bally’s Twin River and Bally’s Tiverton, in each case, as determined by each property’s respective master VLT contracts with the State of Rhode Island. Bally’s Twin River is entitled to a 28.85% share of VLT revenue on the initial 3,002 units and a 26.00% share on VLT revenue generated from units in excess of 3,002 units. Bally’s Tiverton is entitled to receive a percentage of VLT revenue that is equivalent to the percentage received by Bally’s Twin River. From July 1, 2021 through December 31, 2022, Bally’s Twin River and Bally’s Tiverton were entitled to an additional 7.00% share of revenue, as the Technology Provider, on VLTs owned by the Company. Beginning on January 1, 2023, the Company contributed all of its VLT assets to the RI Joint Venture and the RI Joint Venture, as the sole Technology Provider, is now entitled to that additional 7.00% of VLT revenue.

Gaming revenue also includes Bally’s Twin River’s and Bally’s Tiverton’s share of table games revenue. Bally’s Twin River and Bally’s Tiverton each were entitled to an 83.5% share of table games revenue generated as of March 31, 2024 and 2023. Revenue is recognized when the wager is settled, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment. The Company records revenue from its Rhode Island operations on a net basis which is the percentage share of VLT and table games revenue received as the Company acts as an agent in operating the gaming services on behalf of the State of Rhode Island.

Gaming revenue also includes Bally’s Dover’s share of revenue as determined under the Delaware State Lottery Code from the date of its acquisition. Bally’s Dover is authorized to conduct video lottery, sports wagering, table game and internet gaming operations as one of three “Licensed Agents” under the Delaware State Lottery Code. Licensing, administration and control of gaming operations in Delaware is under the Delaware State Lottery Office and Delaware’s Department of Safety and Homeland Security, Division of Gaming Enforcement. As of March 31, 2024 and 2023, Bally’s Dover was entitled to an approximate 42% share of VLT revenue and 80% share of table games revenue. Revenue is recognized when the wager is complete, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment. The Company records revenue from its Delaware operations on a net basis, which is the percentage share of VLT and table games revenue received, as the Company acts as an agent in operating the gaming services on behalf of the State of Delaware.

Gaming revenue includes casino revenue of the Company’s other properties which is the aggregate net difference between gaming wins and losses, with deferred revenue recognized for prepaid deposits by customers prior to play, for chips outstanding and “ticket-in, ticket-out” coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the number of credits played, are charged to revenue as the amount of the progressive jackpots increase.

15

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Online Gaming

The Company’s online gaming operations, similar to land-based casinos, generates revenue from player wagers net of payouts and incentives awarded to players.

The revenue is earned from operating online bingo and casino websites, which consists of the difference between total amounts wagered by players less winnings payable to players, bonuses allocated and jackpot contributions. Online gaming revenue is recognized at the point in time when the player completes a gaming session and payout occurs. There is no significant degree of uncertainty involved in quantifying the amount of gaming revenue earned, including bonuses, jackpot contributions and loyalty points. Bonuses, jackpot contributions and loyalty points are measured at fair value at each reporting date.

Sports Betting

Sports betting involves a player wagering money on an outcome or series of outcomes. If a player wins the wager, the Company pays the player a pre-determined amount known as fixed odds. Sports betting revenue is generated through built-in theoretical margins in each sports wagering opportunity offered to players. Revenue is recognized as total wagers net of payouts made and incentives awarded to players.

The Company has entered into several multi-year agreements with third-party operators for online sports betting and iGaming market access in several jurisdictions from which the Company has received or expects to receive one-time, up front market access fees in cash or equity securities (specific to one operator agreement) and certain other fees in cash generally based on a percentage of the gross gaming revenue generated by the operator, with certain annual minimum guarantees due to the Company. The one-time market access fees received have been recorded as deferred revenue and will be recognized as gaming revenue ratably over the respective contract terms, beginning with the commencement of operations of each respective agreement. The Company recognized commissions in certain states from online sports betting and iGaming which are included in gaming revenue for the three months ended March 31, 2024 and 2023. Deferred revenue associated with third-party operators for online sports betting and iGaming market access was $3.6 million and $3.7 million as of March 31, 2024 and December 31, 2023, respectively, and is included in “Accrued and other current liabilities” and “Other long-term liabilities” in the condensed consolidated balance sheets.

Racing

Racing revenue includes several of our casinos and resorts’ share of wagering from live racing and the import of simulcast signals. Racing revenue is recognized upon completion of the wager based upon an established take-out percentage. The Company functions as an agent to the pari-mutuel pool. Therefore, fees and obligations related to the Company’s share of purse funding, simulcasting fees, tote fees, pari-mutuel taxes, and other fees directly related to the Company’s racing operations are reported on a net basis and included as a reduction to racing revenue.

Non-gaming Revenue

Non-gaming revenue consists of hotel, food, beverage, retail, entertainment and other revenue. Hotel revenue is recognized when the customer obtains control through occupancy of the room over their stay at the hotel. Advance deposits for hotel rooms are recorded as liabilities until revenue recognition criteria are met. Food, beverage and retail revenues are recognized at the time the goods are sold from Company-operated outlets. The estimated standalone selling price of hotel rooms is determined based on observable prices. The standalone selling price of food, beverage, retail, entertainment and other goods and services are determined based upon the actual retail prices charged to customers for those items. Other revenue includes cancellation fees for hotel and meeting space services, which are recognized upon cancellation by the customer, and golf revenues from the Company’s operations of Bally’s Golf Links, which are recognized at the time of sale. Additionally, other revenue includes market access and business-to-business service revenue generated by the International Interactive and North America Interactive reportable segments, which is recognized at the time the goods are sold or the service is provided, and are included in Non-gaming revenue within our condensed consolidated statements of operations.

16

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The estimated retail value related to goods and services provided to guests without charge or upon redemption under the Company’s player loyalty programs included in departmental revenues, and therefore reducing gaming revenues, are as follows for the three months ended March 31, 2024 and 2023:
 Three Months Ended
March 31,
(in thousands)20242023
Hotel$20,479 $22,435 
Food and beverage20,213 19,474 
Retail, entertainment and other2,428 2,591 
 $43,120 $44,500 
Sales tax and other taxes collected on behalf of governmental authorities are accounted for on a net basis and are not included in revenue or operating expenses.

The following tables provide a disaggregation of revenue by segment (in thousands):
Three Months Ended March 31, 2024Casinos & ResortsInternational InteractiveNorth America InteractiveTotal
Gaming$250,418 $231,267 $34,372 $516,057 
Non-gaming:
Hotel41,090   41,090 
Food and beverage34,952   34,952 
Retail, entertainment and other15,869 3,416 7,098 26,383 
Total non-gaming revenue91,911 3,416 7,098 102,425 
Total revenue$342,329 $234,683 $41,470 $618,482 
Three Months Ended March 31, 2023
Gaming$233,107 $237,181 $16,607 $486,895 
Non-gaming:
Hotel47,332   47,332 
Food and beverage33,608   33,608 
Retail, entertainment and other14,739 8,391 7,755 30,885 
Total non-gaming revenue95,679 8,391 7,755 111,825 
Total revenue$328,786 $245,572 $24,362 $598,720 

Contract Assets and Contract Related Liabilities

The Company’s receivables related to contracts with customers are primarily comprised of marker balances and other amounts due from gaming activities, amounts due for hotel stays and amounts due from tracks and OTB locations. The Company’s receivables related to contracts with customers were $35.5 million and $38.5 million as of March 31, 2024 and December 31, 2023, respectively.

The Company has the following liabilities related to contracts with customers: liabilities for loyalty programs, advance deposits made for goods and services yet to be provided and unpaid wagers. All of the contract liabilities are short-term in nature and are included in “Accrued and other current liabilities” in the condensed consolidated balance sheets.

Loyalty program incentives earned by customers are typically redeemed within one year from when they are earned and expire if a customer’s account is inactive for more than 12 months; therefore, the majority of these incentives outstanding at the end of a period will either be redeemed or expire within the next 12 months.

17

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Advance deposits are typically for future banquet events, hotel room reservations and interactive player deposits. The banquet and hotel reservation deposits are usually received weeks or months in advance of the event or hotel stay. The Company holds restricted cash for interactive player deposits and records a corresponding withdrawal liability.

Unpaid wagers include the Company’s outstanding chip liability and unpaid slot, pari-mutuel and sports betting tickets.

Liabilities related to contracts with customers as of March 31, 2024 and December 31, 2023 were as follows:

March 31,December 31,
(in thousands)20242023
Loyalty programs$15,349 $16,803 
Advanced deposits from customers28,141 29,052 
Unpaid wagers18,619 20,481 
Total$62,109 $66,336 

The Company recognized $7.6 million and $5.9 million of revenue related to loyalty program redemptions for the three months ended March 31, 2024 and 2023, respectively.

6.    BUSINESS COMBINATIONS

Casinos & Resorts Acquisitions

Bally’s Golf Links - On September 12, 2023, the Company completed the acquisition of Trump Golf Links at Ferry Point, subsequently renamed Bally’s Golf Links at Ferry Point, which includes the assignment of a license agreement to operate an 18-hole links-style golf course located in the Bronx, New York.

The total purchase consideration included cash paid, net of cash acquired and net working capital adjustments, which amounted to $55.0 million. This acquisition continues the Company’s strategic objective of developing a diversified portfolio within its Casinos & Resorts segment.

Total purchase consideration also included contingent consideration valued at $58.6 million, the fair value at acquisition date, under GAAP, of expected cash payments totaling up to $125 million to the seller, based upon future events, which are uncertain. The contingent consideration was recorded at fair value, using discounted cash flow analyses, and will be remeasured quarterly, with fair value adjustments recognized in earnings, until the contingencies are resolved. The settlement of the contingent consideration liabilities will be due to the seller in the event the license agreement is extended or if the Company is successful in its bid for a casino license.

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the Casinos & Resorts acquisition as of March 31, 2024:
Bally’s Golf Links
(in thousands)
Preliminary(2)
Total current assets$1,108 
Property and equipment, net505 
Intangible assets, net(1)
6,500 
Other assets2,000 
Goodwill103,824 
Total current liabilities(345)
Total purchase price$113,592 
__________________________________
(1)    Bally’s Golf Links’ intangible assets include a concessionaire license of $6.5 million, which is being amortized over its estimated useful life of approximately 12 years.
(2)    The Company recorded adjustments to the preliminary purchase price allocation during the three months ended March 31, 2024 which decreased Goodwill and the total purchase price by $0.2 million.

18

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Goodwill recognized is deductible for local tax purposes and has been assigned as of the acquisition date to the Company’s Casinos & Resorts reportable segment, which includes the reporting unit expected to benefit from the synergies of the acquisitions. Qualitative factors that contribute to the recognition of goodwill include expected synergies from integrating the business into the Company’s casino portfolio and future development of its omni-channel strategy.

The Company incurred $0.2 million of acquisition costs related to the above Casinos & Resorts acquisition during the three months ended March 31, 2024. There were no acquisition costs related to the above Casinos & Resorts acquisition during the three months ended March 31, 2023. These costs are included within “General and administrative” of the condensed consolidated statements of operations.

International Interactive Acquisition

Casino Secret - On January 5, 2023, the Company completed the acquisition of BACA Limited (“Casino Secret”), a European based online casino that offers slots, tables and live dealer games to Asian markets for total consideration of $50.4 million. Cash paid by the Company, net of $8.3 million cash acquired, was $38.7 million, excluding transaction costs.

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the International Interactive acquisition:
(in thousands)
Casino Secret
Final(2)
Total current assets$8,862 
Property and equipment, net50 
Intangible assets, net(1)
29,471 
Goodwill18,422 
Total current liabilities(6,371)
Total purchase price$50,434 
__________________________________
(1)    Casino Secret intangible assets include player relationships and trade names of $26.0 million and $3.5 million, respectively, which are both being amortized on a straight-line basis over their estimated useful lives of approximately 7 years.
(2)    The Company did not record adjustments to the preliminary purchase price allocation during the three months ended March 31, 2024.

Total goodwill recorded in connection with the above acquisition was $18.4 million, and is not deductible for local tax purposes. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill, which consist primarily of benefits from acquiring a talented technology workforce and management team experienced in the online gaming industry, and securing buyer-specific synergies expected to contribute to the Company’s omni-channel strategy which are expected to increase revenue and profits within the Company’s International Interactive reportable segment. The goodwill of the acquisition has been assigned, as of the acquisition date, to the Company’s International Interactive reportable segment.

The Company incurred $1.2 million of acquisition costs related to the above International Interactive acquisition during the three months ended March 31, 2023. There were no acquisition costs related to the International Interactive acquisition during the three months ended March 31, 2024. These costs are included within “General and administrative” of the condensed consolidated statements of operations.

19

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

7.    PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of March 31, 2024 and December 31, 2023, prepaid expenses and other current assets was comprised of the following:
March 31,December 31,
(in thousands)20242023
Services and license agreements$40,975 $32,466 
Short term derivative assets11,031 9,530 
Due from payment service providers10,606 12,662 
Prepaid marketing14,519 8,685 
Prepaid insurance7,497 12,181 
Gaming taxes and licenses6,535 9,309 
Sales tax6,204 7,565 
Purse funds483 6,404 
Other12,257 9,294 
Total prepaid expenses and other current assets$110,107 $108,096 

8.    PROPERTY AND EQUIPMENT

As of March 31, 2024 and December 31, 2023, property and equipment was comprised of the following:
March 31,December 31,
(in thousands)20242023
Land$238,997 $238,997 
Land improvements163,215 162,211 
Building and improvements676,431 673,071 
Equipment270,634 264,398 
Furniture and fixtures69,171 68,746 
Construction in process86,537 73,810 
Total property, plant and equipment1,504,985 1,481,233 
Less: Accumulated depreciation(404,252)(306,345)
Property and equipment, net$1,100,733 $1,174,888 

Depreciation expense relating to property and equipment was $99.5 million for the three months ended March 31, 2024, and $18.7 million for the three months ended March 31, 2023. Depreciation expense during the three months ended March 31, 2024 included $80.1 million of accelerated depreciation related to the closure of the Tropicana Las Vegas property. Refer to Note 13 “Restructuring Expense” for further information. During the three months ended March 31, 2024 and March 31, 2023, the Company recorded capitalized interest of $1.8 million and $2.9 million, respectively.

Bally’s Chicago

A wholly-owned indirect subsidiary of the Company, Bally’s Chicago Operating Company, LLC entered into a Lease Termination and Short Term License Agreement with Chicago Tribune Company, LLC (“Tribune”), effective March 31, 2023, which, among other things, provides that the Company will have possession of 777 West Chicago Avenue, Chicago, Illinois 60610 on or before July 5, 2024, subject to $150 million in payments by the Company to Tribune payable in full upon Tribune vacating the site on or prior to July 5, 2024 (the “Payment”). $10 million of the Payment was paid upon execution of the Lease Termination and Short Term License Agreement and $90 million of the Payment was paid during the third quarter of 2023. The balance Payment amount of $50 million is secured by cash-collateralized letters of credit, issued by Citizens Bank. Cash collaterals are reported as restricted cash as of March 31, 2024.

20

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company recorded the present value of the remaining payments of $48.7 million within “Accrued and other current liabilities” with an offsetting increase to “Property and equipment, net” within the condensed consolidated balance sheets as of March 31, 2024.

9.    GOODWILL AND INTANGIBLE ASSETS

The change in carrying value of goodwill by reportable segment for the three months ended March 31, 2024 is as follows (in thousands):
Casinos & ResortsInternational InteractiveNorth America InteractiveTotal
Goodwill as of December 31, 2023(1)
$313,493 $1,586,590 $35,720 $1,935,803 
Effect of foreign exchange (20,647)(95)(20,742)
Purchase accounting adjustments on prior year business acquisition(208)  (208)
Goodwill as of March 31, 2024(1)
$313,285 $1,565,943 $35,625 $1,914,853 
__________________________________
(1)    Amounts are shown net of accumulated goodwill impairment charges of $5.4 million and $140.4 million for Casinos & Resorts and North America Interactive, respectively.

The change in intangible assets, net for the three months ended March 31, 2024 is as follows (in thousands):
Intangible assets, net as of December 31, 2023
$1,871,428 
Effect of foreign exchange (13,582)
Internally developed software12,325 
Other intangibles acquired2,727 
Less: Accumulated amortization(60,260)
Intangible assets, net as of March 31, 2024
$1,812,638 

21

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company’s identifiable intangible assets consist of the following:
March 31, 2024
(in thousands, except years)Gross Carrying AmountAccumulated
Amortization
Net
Amortizable intangible assets:   
Commercial rights - Sinclair(1)
$315,847 $(97,692)$218,155 
Trade names37,375 (19,480)17,895 
Hard Rock license8,000 (2,364)5,636 
Customer relationships960,366 (345,407)614,959 
Developed technology264,206 (94,359)169,847 
Internally developed software72,752 (15,397)57,355 
Gaming licenses46,316 (14,152)32,164 
Other11,491 (4,131)7,360 
Total amortizable intangible assets1,716,353 (592,982)1,123,371 
Intangible assets not subject to amortization:
Gaming licenses586,971 — 586,971 
Trade names99,781 — 99,781 
Other2,515 — 2,515 
Total unamortizable intangible assets689,267 — 689,267 
Total intangible assets, net$2,405,620 $(592,982)$1,812,638 
__________________________________
(1)    Commercial rights intangible asset in connection with the Framework Agreement. Refer to Note 2 “Summary of Significant Accounting Policies” for further information.
December 31, 2023
(in thousands, except years)Gross Carrying AmountAccumulated
Amortization
Net
Amortizable intangible assets:   
Commercial rights - Sinclair(2)
$315,847 $(89,901)$225,946 
Trade names37,042 (18,125)18,917 
Hard Rock license8,000 (2,303)5,697 
Customer relationships974,286 (314,053)660,233 
Developed technology267,927 (86,119)181,808 
Internally developed software61,687 (13,091)48,596 
Gaming licenses45,008 (11,964)33,044 
Other11,505 (3,621)7,884 
Total amortizable intangible assets1,721,302 (539,177)1,182,125 
Intangible assets not subject to amortization:
Gaming licenses586,971 — 586,971 
Trade names100,544 — 100,544 
Other1,788 — 1,788 
Total unamortizable intangible assets689,303 — 689,303 
Total intangible assets, net$2,410,605 $(539,177)$1,871,428 
__________________________________
(2)    See note (1) above.
22

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Amortization of intangible assets was approximately $60.3 million and $55.9 million for the three months ended March 31, 2024 and 2023, respectively.

The following table reflects the remaining amortization expense associated with the finite-lived intangible assets as of March 31, 2024:
(in thousands)
Remaining 2024
$173,834 
2025
229,551 
2026
227,776 
2027
226,743 
2028
170,953 
Thereafter94,514 
Total$1,123,371 

10.    DERIVATIVE INSTRUMENTS

The Company utilizes derivative instruments in order to mitigate interest rate and currency exchange rate risk in accordance with its financial risk and liability management policy.

In 2023, the Company entered into a series of interest rate contracts and cross currency swap derivative transactions with multiple bank counterparties in order to synthetically convert a notional aggregate amount of $500.0 million of the Company’s USD denominated variable rate Term Loan Facility, as disclosed in Note 14 “Long-Term Debt,” into fixed rate debt over five years and $200 million of the Term Loan Facility, to an equivalent GBP denominated floating rate instrument over three years. These contracts mature in October, 2028 and 2026, respectively.

Derivative Instruments Designated as Hedging Instruments

Net Investment Hedges

Cross Currency Swaps - The Company is exposed to fluctuations in foreign exchange rates on investments it holds in its European foreign entities. The Company uses fixed and fixed-cross-currency swaps to hedge its exposure to changes in the foreign exchange rate on its foreign investment in Europe and their exposure to changes in the EUR-GBP exchange rate. Currency forward agreements involve fixing the USD-EUR exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in USD for their fair value at or close to their settlement date. Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency-fixed-rate payments over the life of the agreement. These derivative arrangements qualify as net investment hedges under ASC 815, with the gain or loss resulting from changes in the spot value of the derivative reported in other comprehensive income (loss). Amounts are reclassified out of other comprehensive income (loss) into earnings when the hedged net investment is either sold or substantially liquidated. Additionally, the accrual of foreign currency and USD denominated coupons will be recognized in “Interest expense, net” in the condensed consolidated statements of operations. Refer to Note 11 “Fair Value Measurements” and Note 16 “Stockholders’ Equity” for further information.

23

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following tables summarize the Company’s net investment hedges as of March 31, 2024 and December 31, 2023 (in thousands):
Net Investment HedgesNotional SoldNotional Purchased
Cross currency swaps461,595 £387,531 
Cross currency swaps£546,759 $700,000 

Cash Flow Hedges

Interest Rate Contracts - The Company’s objectives in using interest rate derivatives are to hedge its exposure to variability in cash flows on a portion of its floating-rate debt, to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and collars as part of its financial risk and liability management policy. The Company’s interest rate swaps and collars are designated as cash flow hedges under ASC 815. The changes in the fair value of these instruments are recorded as a component of accumulated other comprehensive income (loss) and reclassified into “Interest expense, net” in the condensed consolidated statements of operations in the same period in which the hedged interest payments associated with the Company’s borrowings are recorded. Refer to Note 11 “Fair Value Measurements” and Note 16 “Stockholders’ Equity” for further information.

The following table summarizes the Company’s cash flow hedges as of March 31, 2024 and December 31, 2023 (in thousands):
Cash Flow HedgesNotional AmountIndexCap
Floor(1)
Interest rate contracts - swaps$500,000 US - SOFR$$
Interest rate contracts - collars$500,000 US - SOFR4.25%3.22%
__________________________________
(1)    Weighted average rate.


24

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

11.    FAIR VALUE MEASUREMENTS

The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
March 31, 2024
(in thousands)Balance Sheet LocationLevel 1Level 2Level 3
Assets:
Cash and cash equivalentsCash and cash equivalents$169,356 $ $ 
Restricted cashRestricted cash141,533   
Convertible loansOther assets  4,082 
Investments in equity securitiesOther assets3,391   
Investment in GLPI partnershipOther assets 13,206  
Derivative assets designated as hedging instruments:
Interest rate contractsPrepaid expenses and other current assets 6,612  
Interest rate contractsOther assets 408  
Cross currency swapsPrepaid expenses and other current assets 4,419  
Cross currency swapsOther assets 6,929  
Total derivative assets at fair value 18,368  
Total assets$314,280 $31,574 $4,082 
Liabilities:
Contingent considerationOther long-term liabilities$ $ $56,745 
Derivative liabilities not designated as hedging instruments:
Sinclair Performance Warrants
Commercial rights liabilities  44,703 
Derivative liabilities designated as hedging instruments:
Interest rate contractsOther long-term liabilities 5,616  
Cross currency swapsAccrued and other current liabilities 1,000  
Cross currency swapsOther long-term liabilities 24,874  
Total derivative liabilities at fair value 31,490 44,703 
Total liabilities$ $31,490 $101,448 



25

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

December 31, 2023
(in thousands)Balance Sheet LocationLevel 1Level 2Level 3
Assets:
Cash and cash equivalentsCash and cash equivalents$163,194 $ $