Bally’s Corporation has recorded strong recovery of its North American Interactive division in Q1 of 2023 following a series of cost-cutting measures after a disastrous 2022.
CEO Robeson Reeves explained that the unit had “significantly outperformed” initial forecasts after the online unit racked up unsustainable losses last year.
When Bally’s posted its Q4 and 2022 results earlier this year, it caused a whole change of the leadership team as its North American Interactive unit recorded losses of $428m.
For Q1 of 2023, the North American online unit posted revenues of $24.4m, up 60.5% year-over-year as the firm continues to focus on growth in its online casino operations.
Losses were significantly reduced too, as the effects of measures such as cutting 15% of staff were felt quicker than expected. The unit’s adjusted EBITDA stood at negative $10.6m, a significant reduction from the $19.3m lost in Q1 of 2022.
This, Reeves outlined, was due to its cost-cutting measures and an increasing focus on its online casino operations, particularly in New Jersey where it aims to grab an 8% market share.
He said: “North America Interactive significantly outperformed as cost-savings initiatives took hold faster than anticipated. We continue to be igaming first and are executing extremely well in New Jersey where our market share surpassed 4%, well on our way to achieving our 6-8% longer-term goal.
“As Ontario continues to progress, we look forward to our Pennsylvania launch in May as well. We are also closely monitoring the igaming bill that was recently introduced into the Rhode Island legislature. Overall, our igaming business is generating positive returns and we are very optimistic about the future of this business.”
Whilst the online casino side of things are in recovery, work is still ongoing to relaunch the Bally Bet brand, including the recently announced partnership with both Kambi and White Hat for the provision of sportsbook and PAM technology.
These agreements, according to the CEO, will help to bring the sports betting business “back up and running in an effective and efficient manner.”
Other Q1 numbers
Aside from its online unit, Bally’s reported a strong start to 2023, with revenue hitting $598.7m, up 9.2% YoY, thanks to a 17.5% rise in land-based revenue, which hit a quarterly record $328.8m.
The casinos and resorts unit also generated adjusted EBITDA of $78.8m, which is relatively stable with the previous year, but record revenues show that casino footfall and engagement remain strong.
Total group adjusted EBITDA for Q1 was $126.4m, an increase of 10.2%, showing the improvement in numbers from the interactive unit. Net income also grew exponentially, hitting $178.3m compared to $1.9m in 2022.
George Papanier, Bally’s President, offered investors an update on the Casino and Resorts division, explaining: “Our portfolio’s near-term capex cycle has peaked for our Casinos & Resorts segment as several of our growth projects have come to or are nearing completion. This includes an upgrade of our flagship Bally’s Twin River in Rhode Island, which was completed in April, and our Kansas City expansion which will conclude in July.
“We look forward to the opening of the Chicago temporary casino in late summer 2023, which is on track and on budget. We are also advancing the full build of our Bally’s Chicago permanent facility, which is slightly ahead of schedule and on budget for opening in the summer of 2026. There is significant consumer demand for this project, and we couldn’t be more excited to begin producing results.”
2023 profit guidance raised after strong results
Following a strong Q1 performance, Bally’s has raised its full-year adjusted EBITDA guidance to investors, now expected to sit at $665m to $700m. This, according to calculations, accounts for $40-50m worth of losses in North America Interactive, a reduction of around 10-fold.
Meanwhile, Bally’s capital expenditure is expected to come down this year, whilst revenue projections remain at $2.5-$2.6bn.
Further senior leadership changes
After the posting of the 2022 results, there was a change-up in the senior leadership team at Bally’s, with former CEO Lee Fenton departing and Reeves and Papanier taking steps up within the business.
There are now further changes, with Bobby Lavan, Chief Financial Officer, departing to pursue another opportunity. Replacing Lavan as CFO is Marcus Glover, an executive with over 20 years of experience in the hospitality and gaming industries.
Glover’s previous roles in the gaming industry include President and Chief Operating Officer of the Borgata Hotel, Casino & Spa, and President and Chief Operating Officer of the Beau Rivage Resort & Casino.
Soo Kim, Chairman of Bally’s, noted: “On behalf of the Board of Directors, I am excited to welcome Marcus to Bally’s. Marcus is a highly accomplished leader with a proven track record of driving transformational business strategies and demonstrated expertise in leading large, integrated resorts and casino gaming operations.
“I am confident that his experience and strong financial acumen make him the right leader to help Bally’s grow and achieve its long-term financial goals.”