Bally’s Q4: New CEO says it won’t make ‘same mistakes’ on interactive division

hammering nails showing mistakes
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Bally’s incoming CEO Robeson Reeves has asserted that the corporation will not repeat past failures in its North American Interactive division, as it seeks to turn around the fortunes of the embattled division. 

Reeves was confirmed to take over the reins of Bally’s, replacing Lee Fenton who will leave the company following the end of Q1. 

Here’s a rundown of the topline and bottom line numbers: 

Q4 revenue: $576.7 m

Q4 EBITDA: $145.8 m

Q4 Net Loss: $487.5 m

2022 revenue: $2.3bn

2022 EBITDA: $548.5m

2022 Net Loss: $425.5m

For a full breakdown of the figures released for Q4 and 2022, click here.

Bally’s vows not to repeat mistakes in igaming

Speaking to investors after publishing its Q4 and 2022 results, which revealed that the North American interactive division suffered annual losses of $428m, Reeves detailed that as he takes charge – past failures will not be repeated. 

Specifically, he noted that the firm will closely focus on igaming and ‘play to our strengths’ to turn the tide for the flailing unit. 

Asked about the 2024 guidance which notes that the division will contribute $25m in EBITDA, Reeves said: “We’ve got some real bright spots in icasino. So, Bally’s icasino in New Jersey, a perfect example for us, launched just over 12 months ago. 

“It is now at $4m of GGR per month. It continues to grow and it will continue to grow beyond that. We are live in Ontario. We’re seeing very similar trends there, and we’ll be live in Pennsylvania in the half. So we play to our strengths in icasino, but we’re in it for the absolute long haul, but we’re not going to make the same mistakes we made previously.

“We’re going to take a very smart approach and we’re going to play to our strengths and we know that we are fantastic in icasino. Everything you can see in our business shows that.”

Reeves remarked that, under his stewardship, Bally’s will be highly analytical in its approach. Explaining the difference between him and the outgoing Fenton, he noted: “My strengths, as I’ve said, are in data. They’re in being highly analytical and making sure that we’re leveraging all of our technology across our assets and really just when we make a change, hitting it hard.”

The latter part of 2022 saw Bally’s initiate a strategic review into its Interactive activities, which resulted in the cutting of 15% of its payroll and the implementation of cost-cutting measures. 

This, Reeves explained, puts Bally’s on a pathway towards delivering results and making progress towards profitability, which is expected in 2024. 

“Our technology development pipeline has been completely reworked, allowing for a more competitive and effective prioritization,” he outlined: “Fewer dependencies amongst the teams have also reduced complexity. 

“With a thousand plus developers, me and my team, having a tight grip on priorities is how we’ll move faster and deliver near and long-term results to investors. In North America, our upward trajectory on icasino continues.”

Despite woes on the digital side of the business, Bally’s land-based units posted record figures in 2022, turning over $1.23bn in 2022, up 18.7% YoY and making a net income of $182.6m and adjusted EBITDA profit of $345.6m. 

Chicago casino on the way, New York next?

With the unit performing strongly and confidence in its delivery brewing, Bally’s is making two moves to improve the output of casinos even more. 

Firstly, its flagship $1.6bn Chicago casino is in the works after receiving regulatory approval from the Illinois Gaming Commission and the local council. 

Reeves explained that the temporary location is currently under construction and is ‘on track’ to open this summer. Describing the facility as ‘game changing’, he noted that the temporary space will ‘be the first test of the pent-up demand for gaming in Chicago’ and the full resort will open in 2026.

Meanwhile, Bally’s has made a bid for one of three casino licenses in downstate New York, with the request for proposals currently open. In a fierce battle for the licenses, many groups are bidding including Caesars, Wynn and Las Vegas Sands

However, George Papanier, President of Retail, explained that Bally’s is very much in the mix. Seemingly, he confirmed the recent reports that it will build a resort on the site of the current Trump Golf Links at Ferry Point in the Bronx.

Asked for an update on the bid, Papanier outlined: “It is a public process that we’re participating in the RFA process. Obviously, we see a huge potential in that market. 

“The process is moving relatively quickly and we could put together a great bid especially just coming off of the Chicago bid. We’re looking currently at a two-site approach, which worked well for us in Chicago.

“So it’s something that we may be duplicating in this process. But we’re not going to get into any specific strategy at this point in time, but obviously, we see the potential of the market.”

Guidance and cost cutting

Looking ahead, Bally’s reiterated the 2023 guidance given during the release of its preliminary results, expecting revenue of $2.5bn to $2.6n and Adjusted EBITDA in the range of $660m to $700m.

Cost cutting remains a priority whilst ‘investing in care in the North America Interactive division’ is also of importance. 

CFO Bobby Lavan put some color on the canvas on how the firm will improve its operational efficiency going forward. 

“We continue to focus on profitability and cutting costs, and we continue to streamline capital expenditures, which we expect to be about $170m, which includes software development costs of approximately $40m to $45m.

We closed the Tiverton Biloxi sale on January 3rd of this year. Pro forma for that transaction, we have more than $400m of cash on our balance sheet and $3bn of net debt. We have ample liquidity to fund all of our announced projects and we’ll invest with care in North America Interactive.”