Bally’s hampered by Asia declines as International Interactive Q2 revenue falls 7%

Bally’s has reported a 2.5% year-on-year (YoY) rise in group revenue which was offset by a 7.4% decline in the International Interactive division driven by dips in Asia and other markets.

Overall, group revenue sat at $622m (£486m), up from $606.2m in Q2 2023, with gains made across the land-based and North America Interactive arms.

Adjusted EBITDAR remained flat at $161.8m as the company’s net loss widened to $60.2m, compared to a net loss of $25.7 million in Q2 2023.

Breaking performance down by division, there was notable growth in Bally’s North American Interactive segment, with revenue soaring 94.7% YoY to $49.2m.

The North America increase was attributed to “excellent results” for Bally’s New Jersey and Pennsylvania igaming performance as well as gains made from its Rhode Island monopoly.

Bosses also pointed to a strong sportsbook performance, driven by the integration of Kambi and White Hat technology platforms that began in May.

Bally’s CEO, Robeson Reeves, went on to admit that the performance in North America “outperformed internal expectations” and while an adjusted EBITDAR loss of $6.8m was reported, that remains an improvement on last year’s loss total of $17.7m.

Bally’s hopes to oversee additional online sports betting launches during the second half of the year, alongside the Massachusetts and Maryland roll outs last month.

Elsewhere, a 9% increase in UK-based online revenue was offset by difficulties faced in Asia, which contributed to the overall 7.4% decline in International Interactive revenue.

Of the $229.4m in revenue from the division,  the UK accounted for 74% of the total, with Asia on 21% and Europe and Rest of the World making up the remaining 5%.

Bally’s added that it had seen “lower acquisition costs and improved returning customer engagement” in the UK, along with a 4% increase in active customers and average revenue per user.

The business also launched sports betting on the Jackpotjoy brand ahead of Euro 2024 and began accepting Irish customers during the quarter.

Bally’s International Interactive segment also reported a 4% YoY drop in adjusted EBITDAR, which sat at $81.3m.

Finally, land-based revenue rose from $333.1m to $343.1m although the vertical did experience a decline in adjusted EBITDAR from $111m to $98.8m.

CEO Reeves remained bullish on Asia as he reflected on the performance of the Rhode Island-based firm.

He said: “The strength of our UK market reflects continuing igaming share gains and the initial results from accelerating the soft launch of our online sports betting offering. 

“Outside the UK, our business in Asia was challenged in the quarter as we continue to work through several logistical and operational hurdles which directly impacted players. We believe the Asian Interactive market remains an attractive opportunity and we will continue to work to manage and grow our position in this important region.”

Marcus Glover, Bally’s CFO, added: “The diversity of our asset portfolio was again on display in the second quarter of 2024 as we generated healthy financial performance even in the face of some property-specific headwinds.

“We remain focused on optimising our cost structure and enhancing operating efficiency as we continue to build our businesses and operate them cohesively. These efforts have delivered initial successes, and they remain a priority as we move through the balance of the year.”

Bally’s said it expects its full-year 2024 revenue and adjusted EBITDAR to be at the lower end of its guidance range.

Revenue guidance is set at between $2.5bn to $2.7bn and adjusted EBITDAR is set for a  range of $655m to $695m.

At the time of writing, after the results were published at market close on July 31, Bally’s pre-market share price sits at $16.99, a 1.39% drop.

The release of the results for Q2 come just one week after it was confirmed Bally’s had accepted an increased offer from New York-based hedge fund Standard General, which values the firm at $4.6bn, to take the company into private hands.

The deal means Standard General will pay $18.25 per share and combine Bally’s with The Queen Casino and Entertainment (QC+E); a regional casino operator majority owned by Standard General-managed funds.

Reeves insisted the deal is an ideal opportunity to “add further geographic and market diversity” to an already vast portfolio.

Soo Kim, managing partner of Standard General, remarked: “The transaction provides Bally’s stockholders with a significant cash premium along with a certainty of value for their investment or, if they elect to retain their shares, the opportunity to participate in the longer-term growth prospects of our expanded portfolio and significant development pipeline.”