BALY - Earnings call transcript Q1 2022

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Operator

Good day and thank you for standing by. Welcome to the Bally’s Corporation First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers ' presentation, there will be a question-and-answer period. [Operator Instructions] Please be advised that today's conference call is being recorded. now Chief turn Financial would to call I Lavan, Bobby Officer Instructions] like the to over [Operator of Bally's. sir. ahead, go Please

Bobby Lavan

Good Interactive. on that George and you call. thank Relations Executive section available morning, Officer; us website. Investor are everyone today's With Robeson Lee our on Chief me in for the Retail; The call this Reeves, Papanier, accompany joining release President of President call today's is earnings and Fenton,

remind to forward-looking everyone comments we forward-looking the from expectations, results begin, risks like Before in company's contain in significant These discussed would management results are by statements. estimates involve the Actual will may These earnings statements; that differ today and that we statements. these made plans, uncertainties. release materially risks discussed filings. and and forward-looking projections include SEC

the refer today's We of in non-GAAP most GAAP financial will In measures to forward-looking in addition, earnings measures. management contained the included available to a call. during non-GAAP reconciliation Reconciliations not replay our schedules Investors provide project certain our within site comparable certain charges are call, financial on is inability will broadcast Today's to do the release. call and be financial special expenses. also after our the to shortly being measures completion due of live for

it Turning over to, Lee.

Lee Fenton

there which property. and in early return that we removal XXXX. not Thank milestone. we positive you, February in City important late Bobby. there of some mass that casinos time turn saw long been performance drove for smoking since continued you that has achieved Atlantic since in The was Hello, and in be actually last The exciting in have It to very change of everyone. Island highest But short Good April, March and has today. an one April. we the is reported. momentum Rhode mandates with and been the resorts through

change. marketing and was in remove continued to started business wallet due accommodate we Asia weakness need which driven basis our efficiencies UK on and to constant pathway consumer the will was on We've spend Structurally, the a to of in already as side, In larger from a interactive opportunity up global the lower on set performance tailwind by in pressure the long-term strength X% execute a some Asia. currency high-growth the North reset operating to shrunk growth the to inflationary UK structure we have America. as and we On some the has the balance year-on-year, well of portfolio. invest our in

During North quarter, and New during overtaken revenue. this Virgin America in in proprietary and Jersey Blackjack. been additional mode. the to build Bally's Virgin quarter. Live Bally’s of has ramp-up in transferred to Dealer terms New the iCasino Bally’s iCasino Interactive have and deployed Jersey games launched continues activity including in license Bally We was now

betting. we view circa X.X infrastructure this and and New cost will we a acquisition $XXX quarter. yesterday to York, high-tax this This additional be navigate cautious how later we in on months will We WNBA Arizona launched years. with environment is to coming as our follow CPA key partnership, for a is marketing that's proud I'm partnership model as team and keep be streamlined we effort our over in work states and by a represents we the a the roll with out and with our bring foundational York and our of Arizona New will our product technology The business and wind that a to services resources stacks the that milestone BXB huge lower groundbreaking BXC together. market free up for New down is done tracking with Jersey and all business. marketing quarter Tropicana spend to accelerate and Additionally, with us media the and eye our sports In providing significant keen well of Diamondbacks spend will Sinclair. been us

and states. track where Resorts with are the iCasino summer. market we or into will access on access to in segment there details. second to were to we which iCasino Browns million footprint our more includes the in million we than margin. the launch losses are market focus Atlantic Cleveland taking to at on million signed $X.X of April, there In XX.X% near-term. the half expect This where EBITDA January. in Jumping of EBITDA $X reported our Ontario We XX in in Ohio, opportunities opportunities $XX be of City states some Casinos partnership In the

AC approximately $X A in million list for of to XXXX. Day hall outdoor comps was so Lincoln easier to $XX and the revitalize pre-Boston compared from bring new of impact $XX will highest Excluding in beer and back opening to property bans that XQ started was million rooms profitability performance rooms property delivering acquisition year will help towards XXXX. XXXX in More can amenities omnichannel unusual since lobby Encore EBITDA get the completed efficiencies mandates monthly Memorial that experience. XQ an January. is will in drove drive AC mass approximately March in EBITDA be $XX,XXX proof levels. the million campaign and smoking which iCasino than progresses. A positive XXX as new our heightened level There per our the is the customer the will awareness property. early launch March Bally’s that key. weather bar We bring and historical AC

long-term momentum lower-income are operating accordingly. of and consumer year resources Most full we're for of our marquee and our their we're watching carefully but currently properties. we're the forecast potential significantly aligning the very properties we April, cautiously our continued above Now optimistic in

geographies. down On Moving business Interactive. was non-core basis, the which down a in constant to includes International currency overall the X% wind

which which top on is by flat challenging growth is we in we weakness, slowdown basis World business overall rather Top saw a as as line we in consumer below A down of XX% the expectations. our QX UK our consumer for delivered the UK front comps UK. our in friction FX, X%, be spending. continues an UK top market of in was XXXX. business, of to have the new some tightening was XX%. was slightly significantly ARPU Our business our performance QX of Rest and lowered line Asia than The offset expectations in business combination weaker actives-driven, regulation a ahead

the earnings will We align redirect from levels business. and to maintain our accordingly resources

earnings. minimis but impacts As I line, a top know on FX de actually has impact

path. its double-digit growth continued Asia

brand demonstrates Our when take product in and is say Slots to data that pointing gaming you adoption share. the online their consolidated and We're in us opportunities as to out first believe the this tremendous there our can UGADY continues long-term. Live both [ph] short largest the market. we of wider casino new combine mover RNG position segment, even a and

We June in another the will accelerate be offers to betting business. that launching sports opportunity us

rest We performed an help Spain double-digit in throughout EBITDA growth Asia to world line. deliver continue On will to expect and basis, that offset UK. slowdown the of the in any year

profitably to the We non-core wind will down markets. continue

full calendar. made We've good a North progress to in leading Moving on America to launch the up business Interactive.

opportunities $XXX,XXX end wind ramp. continue various SportCaller, to come Bet jumping we acquisition BXB bespoke revenues in July. Telescope in with great works had New businesses Jersey a January, to million and low-cost provide while March business that to is an our $X.X will down of which in

the our forward to we development scalable. analytics EBITDA $XX our make products. iterations new multiple sportsbook for a North and America to Sinclair state-by-state PAM rollout end business. Throughout launch combined our the will quarter Interactive accelerated with loss for we data with and partnership bespoke million big is In sports Our front was step more as the the year, Gamesys integrations costs

on back Now for I some performance. details more will turn Bobby you financial to

Bobby Lavan

and minus year-over-year with in for currency in weak International unusual say, momentum million January versus has was January versus been some quarter. were The Needless In March. on in April March. Lee. UK over XXXX, revenues Thanks, basis, we Casino carried constant $XX negative context, up the resorts million make to minus quarter a but $XX UK X% some performance in in XX% strong. in EBITDA have and to To fourth casinos that from give in Interactive Resort weather started

Additionally, savings we our Gamesys basis. transaction million an on North believe increasing currency $X America I $XX exchange foreign this to from to quarter cost the address will our time annualized last are continue Interactive ramp. position. from wanted this particularly million take We once disclosed to launches grow, to

Our February XXXX central has guidance. was in volatility USD X.XX the dynamics with to market USD the GBP GBP our moved set since various at in X% bank to forecast

on in our UK our business to has GDP While moves very impact top dollars, reporting it USD low line impact EBITDA.

and is line business International XX% is XX% Interactive currencies. XX% top USD, Our other approximately on GBP

are guidance, but XX% XX% our XX%, line Euro. GBP also The USD top FX margins moves and interactive up. tempers EBITDA costs Our our move

will We situation. monitor to continue the

Our developer had $XX the rest year. million launches of on EBITDA North by America of time driven minus business for the ramping

investments progress we year. these subside, expect to as the We through

front-loading $XX which than million, of due the Corporate million rest in slightly of $XX was is for programs. Software development higher minus million, to costs for Length charitable $XX Interactive place the expected of was were year.. right our donation line. the

the the as and until the we project months. in the announce closed for of Black part related and Quad We of of larger the April we those the these project, the sale transactions Tropicana we costs, first part come of Tropicana more will announced produce to larger rent on part project on X, report Tropicana transaction coming XXXX, Cities acquisition view Hawk. As as to leaseback

our guidance billion some the to expect FX due For end announced in to of U.K. revenue the low and primarily at billion of $X.X full to $X.X we slowdown the be year, previously

to guidance EBITDA with slowdown the U.K. in range the the million $XXX remains efficiencies of in million $XXX same the offsetting Our

integration expenditure Interactive back with and $XX related guidance of million capital CapEx. the the of $XXX million same it range. Q&A. you CapEx, remains in CapEx corporate million the to CapEx I’m Our of million turning one-time $XX remains operator $XXX Thank Maintenance property for

Operator

from with Stifel. first Our question Instructions] come [Operator will Stantial Jeff

Jeff Stantial

guys. my Thanks questions. morning good for Hey, taking

Lee Fenton

morning. Good

Jeff Stantial

going be My be to on question morning. first is question first international going to -- the good My business. the Interactive is on

there's You in headwinds. U.K., tightening FX the called some out the

to into at does play for curious XX% prior XX% mid line your for top margins. single-digit called growth about segment, this guidance which Just how this

Just you're think in about how headwinds targets those calling light some of of out? should we these

Lee Fenton

it's base our industry. There's growth to the Yes. inflationary say, now to maintain earnings there. the spending from in U.K., U.K. projecting We're have -- Thanks, the single-digit low pressures U.K. but we flow across slowdown aligning we're some I'd and tightening U.K. cost has profitability been I we're Jeff. Yes, in -- think, the been common out

weakening some So the $XX million on expecting up the our I think from that you'll see earnings margins nudge top line. maintain we're

Jeff Stantial

That's to Okay. COVID a to what gives high we Is conclusion? of year taking function you What you something of to kind then a you the you Perfect. if helpful more kind seeing the comfortable to out data hang lead that pressures, softening that's The a of driving really database? encouraging. what seeing on this data guess, what it could and for are inflationary I the to tailwinds that second. something being your it's more that pressures brings between of maybe like and And are the than just maybe inflation of versus conclusion softening? you come your business? end think of really Just the leads low the

Lee Fenton

X% the wallet ARPUs, on activity of So right? costs. in look mostly got are which just with steady, ARPU engaged. January a that off are weakening we we contraction to people continue the U.K. are in since actives weakening, retained a is of -- engaged. still see They That's the always good still which which activity, are that thing depending so to think we about but particularly it rise the circa the seen thing. the the significant we've X% we've But our a for really is energy why month, got first you've in is Well, complete

Jeff Stantial

Understood. then squeeze That's one just And I might in helpful. if more.

losses folks especially the rollout, think interactive were $XX coming America the most North than the of half expecting, was million back in a On of the bit in year. more I the rollout bulk with

for losses or in Is million to more the still $XXs million that something we in million about think intact, $XXX range? $XX to guided year. Thanks. previously full the should You

Lee Fenton

Thanks Jeff.

now us now We had helped to lift built resources of QX, now. and We do are back in Interactive out we're foundational the that a of We that holding the that right. the some we're heavy door. to X.X reallocating International that

put that makes plan, on floor made the there's to and efficiencies could that with we side of the foot You haven't the more optimistic to the to and a but the iCasino to now. us that decide business combine guidance, the that growing business but we our BXB chance call always hold rollout

sticking we're we with were. where So

Jeff Stantial

Thanks, helpful. Understood. Lee. Very I’ll pass it on.

Lee Fenton

Thank you.

Operator

Thank you.

Your next Jonas from will with Truist come question Securities. Barry

Barry Jonas

taking for Bobby can question, on new on first question. conclusion? a Thanks and any Great. my congrats color as the the strategic role. review And you just Maybe the give

Lee Fenton

But say Yes. to Good morning, one in can Barry. limited a who this what I'll CFO, new Obviously, over here. our we we're Bobby can more color. bit pass give you Lavan,

Bobby Lavan

a Thanks Barry. world-class part and worked Standard that had get Standard synergies other did we that community discussions opportunities best among the who of The sale-leaseback the representatives to the General's General legal be expect what The from financial hard it analysis worked was available shareholders. to and committee the advisers with financed significant we other to including and hard recent interest prices lot prospects was hired of experts, and assessing with of historical terms a to realize and trading things in hope factors. and other fact valued transaction proposal of

at Bally’s reach amounts to are and the cannot offer to an General So while it the is capital terminate committee discussions. shareholders. review, And significant not return so to Standard agreement, we tender decided of conclusion alternative, a pursuing of the an

Barry Jonas

leverage Great. walk the you then Vegas you're progressing offer to tender well And or pursuing how whether see regards about And the financing? for are other how maybe thinking net proposed through as cities, company? as developments you us other in that's

Bobby Lavan

I mean, rules as Yeah. are strict. know you XX:XX tender very Barry

the financing and the tuned. commencement all subject offer the are we with our of obtaining is So so to committed evaluating options stay advisers

as to net now for right we between in to out goes gross that leverage business, position comfortable basis, American the X.XX% be our growth would our a expect invest We it a build somewhere on in Interactive we X.X%. short-term the and we're debt-to-EBITDA and opportunities. North As business at

is not going reduce but anytime we're to down way to the soon denominator. growing bring that is and that So a there leverage

Barry Jonas

the What's short willing in you'd max run number to be even the entertain?

Bobby Lavan

Yeah.

Rhode -- debt-to-EBITDA covenants now we incurrence gross have we right Island. So with

So focus us. that's for a

Barry Jonas

can more review? updated Lee if paper. there? any potentially If regulatory sneak thoughts that on it. I close in, could we're Got a know one But white getting to any updates I the getting UK curious you share just

Lee Fenton

Yeah.

Commission the route take the took we [ph] of sure -- not to actually online. met them And of affordability is happen. getting modest to to for we've minister think pleased message I delve a make I’d has on think going been problem call both will is white the won't delay I what key fellow the UK through. down doesn't be because I at the couple us delay of in demanding time But changes in with fall a pushback felt I around We're I many that of from conservative we go retail documents wanting ago. the in to minister direction which spend. from who was when do. level in getting -- on impact the now positive don't it looking review, covers we're reported any our in obviously, think There's of So, on be So ago, focus relatively different any players certainly implemented and we MPs long Key terms where a bases, see that to of in was measures, covers couple that another visited had rates, spend. focus for a it stage that want thing. for of requesting and the that yes we that's impactful board low -- weeks it the gambling with growing paper at hopeful out, real Gambling yet it had us weeks the to show because out requesting are to think course, That's good. right? of a affordability The the was him. come. And like levels gambling noises that yesterday what documentation these we we that the the and too that opportunity that

As is and to know I've change we that times, will take in I scaled benefit said many you'll that of regulation, any think Barry the over time players likely back. share the

Barry Jonas

Yeah, all so much Thank you guys. it. right. Appreciate

Lee Fenton

you. Thank

Operator

Thank you.

Ricardo open. not phone mute. is next Our sure make your question will is from with line Ricardo, Bank. your Deutsche on come Chinchilla Please

Ricardo Chinchilla

Hey guys, the the will provide And guys would you I you -- color thanks taking awarded if do if decided that Chicago have development significant what for appreciated? any be on funding at potential color you was wondering, a were on or also some would which very could you guys mechanisms renovation Tropicana, to project? question. if

Lee Fenton

we that We could Tropicana, morning. we've said think land bank will substantial that said would And win -- long for would time that Chicago do think And a that the for can we Ricardo, long same where that very hi opportunities an that I we bid. do with the So, pass for that we can business. true strategic for significant we've we got investment although partner. a be I

So both talking be over mentioned much that about that think more we'll those I on more the to as Bobby projects coming come months.

Ricardo Chinchilla

drivers, on your to when long all you you're sorry [ph] start could would potentially plan. at that Chicago would perspective, could a project about provide take to the that potentially timing get starting what going extent, would even current you questions then a on manage you how development be further you to Tropicana when investor the time? bulk when you some in a same if to moment continue from on them have just at any how the guys And the timeline And on in Great. think like all period we do be

those just So, to us developments spend levels other any a timing projects and have clear your for on would all of very CapEx of helpful. the be potential on picture

Lee Fenton

Sure.

then on So, George it color. bit more then in a able to a more timing bit in that Chicago proceed, timing be we the we And going color George we've do you soon details. color? but over able over that do QX, give of give depending we'll announcement. to of of From the in as have be win more should from to So, bit want we we what just to on anything a pass we're right? to the comment to close give months, the I'll me that perspective, be to terms we'll and said give couple to on Tropicana, the do there, you but be one back that, obviously, color our George as might would to need next more will

George Papanier

Sure. Hi Ricardo.

of year, opening temporary approximately Chicago in facility but licensing. in the RFP the the that's the So after requires one

or years temporary facility. opening, the that's year to off. to there maybe the year of subsequent half be permanent And months a and then a opening an So, a three will nine year

Ricardo Chinchilla

for Got last it. me. One one

preliminary could -- you for could guys the your guys guidance, from you your reaffirm there are that discussions review? potential review point any your impact potential that if is And that what if you on business? on what Given regulators, UK give have can us just regulatory of with even been some impact based out be range you any forecasting

George Papanier

any to line been or We've review. already, are with a we by we've the of of But policies as our promoted paper thresholds wait in the been and UK what's take the business in of lot the terms practices operating years, Obviously, which two Commission our account forward proposals or in most would adapting and says say been what of see operation adapting for Gambling have UK. we coming being to offset. white the where levels and last particular

think impact will inside of. most proposed review So, of go operating terms of putting what that the in we don't already how be out because UK we're -- we're not might today we in that

Ricardo Chinchilla

Got you for questions. it. taking Thank much my so

George Papanier

Thank Thanks you. Ricardo.

Operator

Thank you.

Fargo. Dan question Our with from next Politzer come Wells will

Dan Politzer

opine to monitoring low-end touch little talk you morning about maybe think extent know on we a across But database? can on to congrats the attention paying there's on middle the which you good end end, about mentioned you're to you're and consumer? guys. trends Could discernible even your low the you particular what position. end, and end the the new if we the as consumer. Thanks. Bobby seeing regionals. the I Hey that should also database? And differences that property maybe any low high wanted across bit I

Lee Fenton

Yes Dan.

occur really income higher inflation. is of inflation this. only potentially of demand, we're by but still as there's COVID lower But especially the headwind we the of closely the segments. that to kind cost are more And with us. currently watching of watching certainly that So, pent-up the in our household in as living dealing And could some so impact on structure. our customer being It that through we the we're is behind database, that's older growth segment through demographic comfort worth rightsizing see offset age the continue we're

approach came shortfalls we we which in side or lean us and revenue with to to a out that COVID, allows out very from react obviously, just revenue, variable feel but when certain quickly we kind business cost came clean have, the fixed increases mitigates So, as a of, we decreases certainly opportunities. any business our it is of structure of

Dan Politzer

out Got as York, the it. throwing about we areas cash-on-cash projects of And for projects? all Chicago, are the think casinos potential kind I Chicago terms to for How these billion. or Japan just think cost then returns interested. where also around potential of is the in proposed New out you're $X.XX there typical should

return that expectations including and all is licensing fees that in And land the -- cetera? et to sense So, there. a I want get of does Thanks.

Lee Fenton

you why So, that one? take don't Bobby

Bobby Lavan

those a projects. sort but always we significant dynamic, unless interactive underwrite underwriting mean on is return there a of I XX% least at XX% is Yes, we're what

Dan Politzer

Vegas. one Got just it. then And Las the on Trop last one

iterations about it your could you and And on of cost, come inflation, cost economic the do uncertainty possible impact how rising As plans you the this think materials there? think about project out.

Lee Fenton

George, take one? do you to want that

George Papanier

Sure.

economic monitoring But now. would So be focused kind opportunity. the our development conditions really do longer-term on obviously, right there we're of anything we

As a we probably development earlier, we into would that. a bring partner mentioned little in

be to still that's So seen.

Dan Politzer

much. so Thanks Understood.

George Papanier

Thank you.

Operator

Thank you.

Katz question next with Jefferies. come will Our from David

David Katz

-- Lee. good love perspective or enter Hi, one, day entering you, my than spending, opinion perspective road, a how approach capturing for share for market one, those strategies your versus bit it Thanks your on of markets they where markets much right? I'd morning. with how taking markets entering terms aggressive sort less take players are aggressive. US your say questions. has on seen One other I'd weeks, be certain day the in months of We've where a entering. down on to and tended you're love

Lee Fenton

Good morning, David.

of lean that look of going that terms launches that market earlier to say from all, high We also have believe some it we many progressive set seen isn't of really how to with the in a we others. we're the reiterated similar, we created. spend times let's leverage a into we've approach mentioned that and First you've number marketing opportunity

opportunities or a iGaming going focus. pretty where think particular we are be there's to states So there's where will have we near opportunities ones term iGaming

Indiana casinos Illinois presence. also I we and et think and cetera, have space have we where like immediate physical

free-to-play a out had in lot been we sports mean active, there though So we of we we set, been X.X or book data course building funnel, until doesn't that so -- Bally’s it's been both right? have been it we've focus. whether our even building awareness, doing through force haven't have our where We've opportunities [ph] to yesterday, haven't -- that been top continue through of

and on We marketing disciplined. from will return work very our hard investment of stay

David Katz

real exists could about within a land-based want thinking I properly. you're within land-based or other how to improvements that estate use it either that it respect portfolio. fund comment second earlier expenditures your bank it? Lee, Understood. capital Chicago land-based I interpreted sure and there that land the is today the you to or And to the other properties make I with just as Is business, value to mentioned you considerable me took

Lee Fenton

Yes.

You understood it correctly.

David Katz

you. Okay. Perfect. Thank

Lee Fenton

Thanks, Dave.

Operator

Our Stephen Grambling Sachs. next Thank Goldman you. [Operator from Instructions] comes question with

Stephen Grambling

guess guess the thanks. the I why just was the on the another Hi, Maybe determined that to tender magnitude follow-up appropriate $XXX, range? I $XXX

Lee Fenton

Bobby?

Bobby Lavan

we Yes. that Board where felt I good more was than a that was, can't that. but comment amount mean the

Stephen Grambling

you And ultimate tender say end evaluated. that that other could think being of you that result is of the offer are there's review, kind the still that would about also opportunities or

Bobby Lavan

of is is always ultimate The value. This the long-term end ways Board to review. drive the evaluating shareholder

Stephen Grambling

Great. That’s Thanks. me. from it

Operator

Thank you.

Our comes Jeff Stantial with from Stifel. next question

Jeff Stantial

just I crystal thanks. Hey, just to guide. to the clarify circle be to on clear back. want I want

and is So guide Is like fair which impact impacting that's about biggest all are end, QX. FX it prior with line the in compositional the sounds squarely low is revenue. is how in compositional but you it revenues if at the still that EBITDA thinking were back things

Lee Fenton

Jeff. correct That's Yes.

Jeff Stantial

Perfect.

all to guys. That’s clarify want Thanks from me. that. Just on

Lee Fenton

Thank you.

Operator

event. today's concludes This gentlemen. and ladies you, Thank

may disconnect. now You

Bally's (BALY) 7 May 222022 Q1 Earnings call transcript