Risk Factors Dashboard
Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.
View risk factors by ticker
Search filings by term
Risk Factors - BALY
-New additions in green
-Changes in blue
-Hover to see similar sentence in last filing
Item 1A. “Risk Factors” of this Annual Report on Form 10‑K.We have established policies and processes for assessing, identifying, and managing material risks from cybersecurity threats, policies, procedures, systems, controls, and other safeguards in place to manage such risks. At this time, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. For additional information regarding risks from cybersecurity threats, Cybersecurity and data protection are integrated into our overall risk management and oversight framework. Our Board of In the event we identify a potential cybersecurity issue, we have defined procedures for responding to such issues, including We have a dedicated management team overseeing our cybersecurity initiatives, led by our Chief Information Officer , our Vice President and Global Data Privacy Officer, and our Vice President of Cybersecurity. Our Chief Information Officer has over 25 privacy programs. Our cybersecurity management team regularly meets with industry trust groups, senior executives and other team members to The Company has a dedicated Security Forum and a Data Protection Committee comprising members from our senior 
The foregoing list of important factors is not exclusive and does not include matters like changes in general economic
conditions that affect substantially all gaming businesses.
You should not place undue reliance on our forward-looking statements.
4
PART I
ITEM 1.BUSINESS
Bally’s Corporation, a Delaware corporation, with global headquarters in Providence, Rhode Island, is referred to as the
“Company,” “Bally’s,” “we,” “our” or “us.” Our common stock is traded on the New York Stock Exchange (the “NYSE”)
under the symbol “BALY”.
Our Company
We are a global gaming, hospitality, entertainment and technology company with an expanding international footprint across
casino, interactive and lottery markets. We provide our customers and partners with physical and interactive entertainment and
gaming experiences worldwide. Our offerings include traditional casino gaming, iGaming, online bingo, sportsbook, free-to-
play games and technology driven lottery and gaming solutions.
As of February 28, 2026, we own and operate 20 casinos globally, including in the United Kingdom (“UK”) and in 11 states
across the United States (“US”), along with a golf course in New York and a horse racetrack in Colorado.
We also own Bally Bet Sportsbook & Casino, a premier sports betting and iCasino platform licensed in 14 jurisdictions in
North America, and a majority equity interest in Bally’s Intralot S.A. (“Intralot”) which is active in 39 jurisdictions worldwide
and is comprised of a global lottery, technology, management and services business and also the Bally’s Interactive
International division, a leading global interactive gaming operator. We also have rights to developable land in Las Vegas at the
site of the former Tropicana Las Vegas, have been awarded a license to build a full-scale casino and resort in The Bronx, New
York, and are developing an integrated destination resort in Chicago, Illinois.
Our revenues are primarily generated by these gaming and entertainment offerings. Our proprietary software and technology
stack is designed to allow us to provide consumers with differentiated offerings and exclusive content.
Our Strategy and Business Developments
We seek to continue to grow our business by focusing on expanding our integrated casino and interactive gaming platform,
optimizing our capital structure, and employing disciplined growth initiatives. We believe that interactive gaming represents a
significant strategic opportunity for the future growth of Bally’s and we will continue to proactively allocate resources in
regions where we anticipate iGaming regulation, in addition to those markets where iGaming is already well-established.
Across the globe, we engage in multiple state and private bidding processes, seeking to obtain new lottery agreements through
our innovative technology and solutions. We seek to increase revenues at our casinos and resorts through enhancing the guest
experience by providing popular games, restaurants, hotel accommodations, entertainment and other amenities in attractive
surroundings with high-quality guest service. We believe that our recent acquisitions have expanded and diversified us from
financial and market exposure perspectives, while continuing to mitigate our susceptibility to regional economic downturns,
idiosyncratic regulatory changes and increases in regional competition.
In 2025, we continued to execute our long-term strategy, focusing on portfolio expansion, interactive and digital growth, capital
structure optimization and operational excellence. Notable efforts included:
•In February 2025, we completed the previously announced merger transactions with Standard General L.P. and its
affiliates (“Standard General”) and The Queen Casino & Entertainment, Inc., and affiliate of Standard General
(“Queen Casino”), adding four regional gaming properties to our Casinos and Resorts portfolio. We believe that these
acquisitions strengthen our presence in core US markets and support our strategy of geographic diversification.
•In October 2025, we completed a landmark multi-stage transaction with Intralot that reshaped our operating footprint
by combining our Bally’s International Interactive business with Intralot’s lottery and gaming operations. We believe
that this strategic combination established a cohesive global footprint that strengthened both our business-to-business
(“B2B”) and business-to-consumer (“B2C”) channels. This integration brought together our advanced digital
technology framework, data systems and interactive expertise with Intralot’s established lottery infrastructure and
global market reach. We own 57.9% in the combined entity, which is listed on the Athens Stock Exchange as BYLOT.
•In April 2025, we committed A$200 million in convertible notes and subordinated debt to acquire an approximately
38% economic interest in The Star Entertainment Group Limited (“The Star”), a leading Australian casino operator
with properties in Sydney, Brisbane and the Gold Coast. This investment expands our international footprint and helps
position us for further long-term global growth.
5
•During 2025, Bally’s Chicago, Inc., a consolidated subsidiary of the Company, successfully completed a public
offering and private placements, which offered equity to local and accredited investors in an innovative public-private
structure that enhances our local stakeholder alignment, demonstrating our commitment to communities in the City of
Chicago and other parts of Illinois.
•Construction of our permanent Chicago casino progressed throughout the year, supported by operations at the Bally’s
Chicago Casino temporary facility. We continued to refine customer engagement strategies and integrate data analytics
to optimize performance ahead of the permanent opening.
•In September 2025, we announced plans for the former Tropicana Las Vegas site that include the development of the
future Las Vegas Athletics Major League Baseball stadium and an expansive integrated casino, retail, dining and
entertainment complex.
•In December 2025, we were awarded one of New York State’s three downstate commercial casino licenses for our
Bally’s Bronx project, a transformational $4 billion integrated casino resort project located within Bally’s Golf Links
at Ferry Point in The Bronx, New York. This resort project aims to create sustainable economical advancement and
meaningful engagement and collaboration within the community.
•During 2025, several lottery contracts were awarded to Intralot including contracts for VLTs monitoring system in
Nebraska and in New Zealand and contracts for lottery systems in New Hampshire, Idaho and Arkansas.
Collectively, these initiatives have advanced our transformation into a globally diversified gaming and technology operator with
a strengthened portfolio, expanded global footprint and enhanced platforms across both digital and land-based channels.
2025 Transactions
On February 7, 2025, the Company completed the previously announced transactions under the Agreement and Plan of Merger
(as amended, the “Merger Agreement”) with SG Parent LLC, a Delaware limited liability company (“Parent”), The Queen
Casino & Entertainment, Inc., a Delaware corporation and affiliate of Parent (“Queen”), Epsilon Sub I, Inc., a Delaware
corporation and wholly owned subsidiary of the Company (“Merger Sub I”), Epsilon Sub II, Inc., a Delaware corporation and
wholly owned subsidiary of the Company (“Merger Sub II”, and together with the Company and Merger Sub I, the “Company
Parties”), and, solely for purposes of specified provisions thereof, SG CQ Gaming LLC, a Delaware limited liability company
(“SG Gaming” and together with Parent and Queen, the “Buyer Parties”). Refer to Note 1 “General Information” to our
consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K for more information on the
Merger Agreement and the mergers.
On October 8, 2025 (the “Intralot Closing Date”), the Company completed the previously announced acquisition under the
transaction agreement (the “Transaction Agreement”) of Intralot, pursuant to which Intralot agreed to acquire Bally’s
International Interactive through a combined cash-and-equity transaction. Pursuant to the Transaction Agreement, (i) Intralot
paid the Company €1.5 million ($1.8 billion) in cash and issued approximately 873.7 million new shares in exchange for all of
the issued and outstanding capital stock of Bally’s Holdings Limited which held Bally’s International Interactive, (ii) the
Company’s ownership of Intralot increased to a controlling 57.9% interest through the issuance of equity to the Company’s
consolidated subsidiary Premier Entertainment Sub, LLC via PE Sub Holdings LLC, an indirect wholly owned subsidiary of the
Company, making the Company the majority shareholder of Intralot (the “Intralot Transaction”).
As a result of obtaining a controlling financial interest in Intralot, the Company retained control of Bally’s International
Interactive, via Bally’s Holdings Limited, throughout the transaction. On the Intralot Closing Date, legal ownership of Bally’s
Holdings Limited transferred from Premier Entertainment Sub to Intralot; however, Bally’s Corporation simultaneously
obtained control of Intralot. Accordingly, Bally’s maintained control of Bally’s International Interactive, and as a result, the
transfer of Bally’s International Interactive was accounted for as an equity transaction with the initial recognition of a 42.1%
non-controlling interest, and no gain or loss was recognized in earnings.
For further information on our recent acquisitions, refer to Notes 1 “General Information” and 7 “Business Combinations” to
our consolidated financial statements presented in Part II, Item 8 of this Annual Report on Form 10-K.
6
Our Operating Structure
Our business is organized into four reportable segments: (i) Casinos & Resorts, (ii) Bally's Intralot B2B, (iii) Bally's Intralot
B2C and (iv) North America Interactive.
Casinos & Resorts - includes 19 land-based casino properties, one horse racetrack and one golf course in the US as of
February 28, 2026:
__________________________________
(1)Consists of three casino properties: Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino.
(2)Properties leased from Gaming & Leisure Properties (“GLPI”). Refer to Note 15 “Leases” presented in Part II, Item 8 of this Annual Report on Form 10-
K for additional information.
(3)Temporary casino facility while permanent casino resort is constructed. Site of future permanent casino resort is leased from GLPI.
Bally's Intralot B2B - includes Intralot’s global lottery operations and the Company’s licensing business.
Bally's Intralot B2C - includes the Company’s interactive European gaming operations, Intralot’s B2C lottery operations, as
well as one casino property, Bally's Newcastle, in the UK.
North America Interactive - includes the North American operations of Bally’s Interactive, primarily a B2C online iGaming and
online sportsbook operator; and consumer facing service and marketing engines.
Refer to Note 20 “Segment Reporting” to our consolidated financial statements presented in Part II, Item 8 of this Annual
Report on Form 10-K for additional information on our segment reporting structure.
Our Brands
Bally’s Brand
Bally’s is an iconic brand with broad recognition in the gaming industry. Our market research indicates that active gamers
demonstrate strong awareness of the Bally’s name, though historically they have had limited engagement with Bally’s‑branded
products and gaming offerings. In recent years, we have undertaken a comprehensive rebranding initiative across our casinos
and resorts portfolio to build upon the deep legacy of the Bally’s brand.
7
Our research further indicates that gamers across demographic segments recognize Bally’s and associate the brand with gaming
entertainment, including slot machines, pinball machines, video gaming, and casinos. We continue to execute on our vision of
establishing Bally’s as a premier, fully integrated, omni‑channel gaming destination for both retail and online players. These
insights have informed the development of our Bally Rewards program, which enables customers to earn and redeem rewards
seamlessly across online platforms, our sportsbook, and our casino resorts.
We believe our phased approach to transforming and unifying the Bally’s brand has been thoughtful and deliberate.We believe that our phased approach to the transformation of Bally’s brand was thoughtful and deliberate. While
certain properties operate under legacy or third‑party naming rights arrangements, Bally’s remains central to our long‑term
strategic positioning.
In summary, we remain focused on advancing Bally’s as a legendary, integrated brand by leveraging our casinos and resorts
footprint, interactive offerings, media assets, and our comprehensive rewards program to enhance customer engagement and
rival our competition.
Interactive Brands
We operate a suite of award-winning brands and are focused on building a diverse portfolio of distinctive and recognizable
brands that deliver player experiences and gaming content globally. Our brands are generally as follows, which include certain
licensed brands:
•iGaming brands: Bally Bet, Rainbow Riches Casino, Virgin Games, Monopoly Casino;
•Online bingo: Jackpotjoy, Double Bubble Bingo and Botemania;
•Sportsbook: Bally Bet;
•Free-to-Play Games: Bally Play, Bally Sports Live and SportCaller;
•Telescope, a provider of real-time audience engagement solutions for live events, gamified second screen experiences
and interactive livestreams.
Lottery Brands
Our lottery brands include LotosX, which serves as our open and modular software ecosystem enabling operators to deliver
secure, reliable, and flexible gaming services with improved operational efficiency, and PhotonX, which is one of the market’s
highest‑performance retail lottery terminals, providing fast, dependable transaction processing and a seamless experience for
both operators and players.
Our Technology and Product Development
At Bally’s, we have developed an integrated suite of real‑money gaming and lottery technologies that support a diverse
portfolio of localized products. Our platforms combine proprietary innovation with third‑party solutions, enabling flexibility,
scalability, and responsiveness to market needs.
Our technology stack delivers core player account management capabilities, including responsible gaming tools, compliance
infrastructure, and secure, high‑performance digital wallets. Our data and analytics platform supports essential marketing
processes and enables a unified, customer‑focused experience across our casinos and resorts, as well as our online gaming,
sports betting, and lottery businesses.
We remain committed to advancing technology that strengthens our competitive position and enhances the customer
experience. A key objective is the continued integration of products and systems across our portfolio to deliver a seamless,
end‑to‑end experience. We also plan to expand our data analytics capabilities to improve the identification and management of
problem‑gambling indicators while enhancing product personalization and entertainment value.
Our approach is grounded in more than two decades of experience in global lottery and online gaming markets, combined with
Intralot’s extensive lottery heritage, Bally’s iGaming expertise, and longstanding partnerships with leading third‑party sports
and gaming providers. Our technology and product development teams continue to innovate, adapt to emerging trends, and
support expansion into new markets.
A significant milestone in our technology strategy is Vitruvian, our advanced data and marketing platform that leverages
real‑time data, artificial intelligence (“AI”), and machine learning (“ML”). Vitruvian supports predictive analytics, real‑time
responsible gaming monitoring, and highly personalized marketing and content recommendations. Together with our existing
lottery, sports, and gaming platforms, it provides a robust foundation for continued innovation and future market launches.
8
In 2025, we continued to strengthen our online gaming and sports betting offerings, including the rollout of a redesigned
proprietary sportsbook interface in North America. Across the Bally’s Intralot B2C segment, we expanded sports offerings
through the Kambi platform, introduced the “Jackpot Blast” jackpot product, and completed deployment of Vitruvian. These
enhancements reinforced our responsible gaming frameworks, improved platform efficiency, and supported more personalized
customer engagement.
Intralot’s lottery portfolio further expands our global technology footprint, providing solutions across 40 markets. These include
proprietary systems for state‑operated traditional lotteries under long‑term contracts, iLottery platforms, advanced VLT
monitoring systems for large‑scale gaming networks, and “Orion,” a retail‑focused sports betting platform designed to leverage
existing retail infrastructure.
Throughout 2026, we expect to advance integration between Bally’s Interactive and Intralot technologies. This work is intended
to strengthen our long‑term technology roadmap, enhance future B2B opportunities, and introduce additional capabilities across
our B2C operations in both existing and emerging markets.
Marketing
Bally’s marketing strategy centers on a well-defined vision: driving sustainable growth, increasing market share, and
strengthening competitive advantage within each region in which we conduct business. To realize these objectives, we utilize a
cohesive, analytics-based strategy that spans six primary marketing channels - Advertising, Direct Marketing, Player
Development, Special Events and Promotions, Entertainment, and our Bally Rewards loyalty program.
This multi‑channel ecosystem enables us to create consistent brand experiences while tailoring our message to the unique
dynamics of each market. Our marketing system is crafted to drive both visitation and revenue with targeted precision,
efficiency and a strategic approach, serving over 12 million Bally Rewards members across North America.
Our transformation is clear and intentional. We are purposefully adopting a growth-oriented strategy, focusing on expanding
our database, enhancing customer loyalty and boosting revenue growth, all while upholding prudent reinvestment. By directing
resources towards high impact, high return initiatives, particularly in regional markets with fierce competition, Bally’s is
dedicated to capturing market share through more effective marketing, deeper customer engagement, and premier analytics.
Our strategy centers on a comprehensive analysis of data, assessing not only efficiency but also effectiveness. Through insights
into customer actions, prevailing market trends, and reinvestment economics, we are able to optimize returns and maintain
long-term growth, even when faced with strong competitive environments.
Advertising
Bally’s takes a distinctly different approach from traditional casino advertising, choosing to emphasize targeted, action-oriented
communications rather than widespread brand awareness campaigns. The Company allocates its advertising budget toward
initiatives that prompt instant customer engagement, such as special events, entertainment options, promotional activities, and
amenity‑based offers.
Years of operating in highly competitive regional markets have shown that targeted advertising outperforms generic messaging,
strengthening both visitation and overall brand value. We leverage a diversified media mix to connect with every customer
segment, ensuring relevance and maximizing conversion.
Direct Marketing
Direct marketing is the foundation of our customer engagement model. It allows us to build personalized, data‑driven
relationships through tailored offers designed to stimulate initial visits, increase frequency, and reactivate inactive or
low‑frequency players.
Our strategy differentiates itself by being more aggressive and more analytical than traditional approaches. We believe our
success across the portfolio has come from optimizing reinvestment without oversaturation and from leveraging a rules‑based
decision engine that incorporates multiple customer‑value and behavioral data points. This strategy is designed to promote
precision, improve ROI, and enhance the customer experience through relevancy and consistency.
9
Player Development
Our VIP segment—representing over 60% of rated casino revenue—is the core of Bally’s business. The Player Development
team sits at the heart of our customer‑relationship strategy, building and maintaining high‑value relationships that directly
impact property performance.
This group works with divisional and property‑level leadership to drive:
•Premium player acquisition
•Retention and loyalty
•VIP revenue growth
•Best‑in‑class service delivery
We believe that providing exceptional hospitality, exclusive experiences, tailored offers, and personalized entertainment helps
Bally’s remains a preferred destination for our most valuable customers. Player Development is not just a marketing function—
it is a strategic revenue engine critical to our long‑term growth.
Special Events and Promotions
Programming is one of the most important drivers of visitation in regional gaming markets, and Bally’s leverages its loyalty
program to deliver high‑value, segmented event strategies. We believe gift programs, promotional offers, card‑tier events, and
themed activation calendars reinforce loyalty and accelerate repeat visitation.
Our approach seeks to balance broad‑appeal promotions with elevated, targeted experiences designed to deliver incremental
revenue from core customer segments. This approach aims to strengthen the Bally Rewards program and enhance brand affinity
across the database.
Entertainment
Entertainment plays a vital role in our mission to attract and retain gamers. Through a mix of headline acts and compelling local
entertainment in lounges and bars, Bally’s strives to create a differentiated customer experience that drives both gaming and
non‑gaming revenue.
By integrating entertainment into our marketing strategy, we expand our reach to new audiences, so that we may grow our
loyalty base and reinforce the Bally’s brand as engaging, fun, and experience‑driven.
Bally Rewards Loyalty Program
The Bally Rewards Program is the backbone of our customer ecosystem. Designed to unify the brand across all Casinos &
Resorts properties, the program features five tiers—Pro, Star, Superstar, Legend, and Champion—each offering escalating
benefits.
The future vision includes a true “one card system” allowing customers to seamlessly use their benefits across properties and
online. Our focus is on expanding benefits beyond the casino floor, giving customers more reasons to stay loyal to the Bally’s
brand.
Interactive Cross Marketing
Our cross‑marketing strategy bridges online and land‑based gaming through coordinated campaigns across direct mail, property
marketing, and VIP channels. We believe these initiatives increase interactive product adoption while driving interactive
customers back into land‑based properties. In jurisdictions where we have both strong retail and interactive business, we believe
we have the opportunity to use our database to cross sell customers and unlock value in the database. This is a growing area of
opportunity, and we look to deploy in more markets as our interactive business grows.
10
Competition
The gaming industry is one of the most competitive in the entertainment landscape, spanning land‑based casinos, Native
American properties, online gaming, sports betting, Video Lottery Terminals (“VLTs”), sweepstakes, fantasy sports, and
countless non‑gaming leisure alternatives. Competitive pressure is significant in every jurisdiction where we operate—
especially from low‑tax competitors such as certain Native American casinos.
As legalized gaming continues to expand across the US and internationally, Bally’s must maintain a disciplined, data‑driven
marketing strategy to protect market share, grow in key regional markets, and continue positioning the brand for long‑term
success.
Seasonality
Seasonal patterns, including weather, tourism cycles, and transportation conditions, affect performance across several Bally’s
properties. Regional casinos often peak in the spring; destination properties in the summer. Sports betting follows major sports
seasons. Because these fluctuations can materially impact performance, Bally’s proactively aligns programming, reinvestment,
and marketing calendars to maximize results during peak demand and offset seasonal declines.
Human Capital Resources
Engaging and Investing in the Community
The Company believes that in order to flourish in a competitive environment and global economy, all ideas must be on the
table, and an environment that welcomes and encourages diverse perspectives leads to success in business. A driving factor of
our success is ensuring that our team members are player-centric and proactive in finding ways to entertain and deliver custom
experiences for our broad and diverse global players and guests.
We believe that by providing our employees with competitive pay and benefits, as well as opportunities for professional
development, we can achieve our goals of attracting and retaining a creative and engaged workforce reflective of our players,
guests and customers. Our professional development efforts include robust training programs, at no cost to the employee,
scholarships, and tuition reimbursement opportunities. In addition, we maintain a Management Development Program which is
designed to allow us to identify and promote high performing talent within our workforce. We also engage with our employees
through a number of health and wellness programs which include an annual wellness fair, annual flu shots, weight loss
programs, quarterly fitness challenges, employee assistance program, student loan assistance, and weekly wellness
communications providing helpful information on health initiatives.
We also believe in the importance of giving back to our communities and have several community impact initiatives, including
fundraising events to support local organizations and community service events. We encourage our employees to participate in
these events and recognize their efforts and contributions in their respective communities.
Labor Relations
As of December 31, 2025, we had approximately 11,700 employees. A large number of our employees at our Casinos &
Resorts properties within several US states are represented by a labor union and are subject to collective bargaining agreements
with us. As of December 31, 2025, we had 36 collective bargaining agreements covering 3,679 employees. Our collective
bargaining agreements generally have three-or-five-year terms.
Environmental, Social and Corporate Governance
Bally’s is committed to engaging and investing in the communities in which we operate and promoting a diverse and inclusive
workplace for our valued team members. We strive to make a positive impact and embrace our commitment to responsible
gaming and business practices.
Across all jurisdictions where we are located, we are dedicated to building stronger communities by becoming an integral part
of the local community by hosting fundraisers, building relationships, growing tourism, and supporting local non-profits. The
Company made a landmark $5 million commitment over five years to the Community College of Rhode Island Foundation as
part of a strategic workforce and economic development partnership in the State of Rhode Island. This investment has led to the
development and launch of a comprehensive Table Games Dealer Training Academy at the college campus near one of our
largest casinos. The program's inaugural class achieved a 100% graduation rate, with all graduates receiving job offers from
Bally’s, the majority of which remain active team members today.
11
In addition, we are committed to ensuring responsible play and guest safety. All our employees participate in training to better
equip them to identify and mitigate problem play. The Company is a member of the U.S. Responsible Online Gaming
Association and the corporate Leadership Circle for the National Council on Problem Gambling, adopted American Gaming
Association’s Responsible Marketing Code of Conduct and supported its annual “Have a Game Plan” Campaign, and received
RG Check responsible gaming accreditation for online operations BallyCasino.com and VirginCasino.com (since rebranded to
MONOPOLYCasinoUS.com). We are also committed to supporting responsible gaming research and donated over $1 million
to the International Center of Responsible Gaming for expanded research for underage play prevention and the usage of
responsible gaming tools since 2022.
Governmental Gaming Regulation
General
The casino, iGaming and lottery industries are highly regulated, and we must maintain licenses and pay gaming taxes in each
jurisdiction in which we operate. Our casino and iGaming businesses, as well as our lottery contracts which are typically B2B
in nature, serving government run and state regulated lottery organizations, are subject to extensive regulation under the laws,
rules and regulations of the jurisdiction in which we operate. These laws, rules and regulations generally concern the
responsibility, financial stability, integrity and character of the owners, managers, officers and certain employees of our gaming
operations. Probity checks are conducted by regulatory authorities to establish that such persons are fit and proper. Violations
of laws or regulations in one jurisdiction could result in disciplinary action in that and other jurisdictions.
Some jurisdictions, including those in which we are licensed, empower their regulators to investigate participation by licensees
in gaming outside their jurisdiction and require access to periodic reports reflecting those gaming activities.
Pursuant to the gaming laws in the jurisdictions where we have operations, and under our organizational documents, certain of
our securities are subject to restrictions on ownership which may be imposed by specified governmental authorities. These
restrictions may require a holder of our securities to dispose of the securities, or, if the holder refuses or is unable to dispose of
the securities, we may be required to repurchase the securities.
For a more detailed description of regulations to which we are subject, see Exhibit 99.1, to this Annual Report on Form 10-K,
which is incorporated herein by reference.
Our Regulatory Agreement
We are party to an Amended and Restated Regulatory Agreement (the “Regulatory Agreement”), with the Rhode Island
Department of Business Regulation (“DBR”) and the State Lottery Division of the Rhode Island Department of Revenue
(“DoL”). The Regulatory Agreement contains financial and other covenants that, among other things, (i) restrict the acquisition
of stock and other financial interests in us, (ii) relate to the licensing and composition of members of our management and
Board of Directors (the “Board”), (iii) prohibit certain competitive activities and related-party transactions and (iv) restrict our
ability to declare or make restricted payments (including dividends), incur additional indebtedness or take certain other actions,
if our leverage ratio exceeds 5.50 to 1.00 (in general being gross debt divided by Adjusted EBITDA, each as defined in the
Regulatory Agreement).
The Regulatory Agreement also provides affirmative obligations, including setting a minimum number of employees that we
must employ in Rhode Island and providing the DBR and DoL with periodic information updates about us. Among other
things, the Regulatory Agreement prohibits us and our subsidiaries from owning, operating, managing or providing gaming
specific goods and services to any properties in Rhode Island (other than Bally’s Twin River and Bally’s Tiverton),
Massachusetts, Connecticut or New Hampshire. A failure to comply with the Regulatory Agreement could subject us to
injunctive and monetary relief, and ultimately the revocation or suspension of our licenses to operate in Rhode Island.
12
The DoL also has regulatory authority over Bally’s under our VLT master contracts with the DoL. Our master contracts with
Rhode Island extended through June 30, 2043, and allow for consolidation of promotional points between Bally’s Twin River
and Bally’s Tiverton, obligate Bally’s Twin River to build a 50,000 square foot expansion, obligate Bally’s to lease at least
20,000 square feet of commercial space in Providence, and commit us to invest $100 million in Rhode Island over the term,
including an expansion and the addition of new amenities at Bally’s Twin River. As a licensed Technology Provider since July
1, 2021, Bally’s Twin River is entitled to an additional share of net terminal income on VLTs which they owned or leased. June
2021 legislation in Rhode Island also authorized a joint venture between Bally’s and IGT Global Solutions Corporation (“IGT”)
to become a licensed technology provider and supply the State of Rhode Island with all VLTs at both Bally’s Twin River and
Bally’s Tiverton for a 20.5-year period starting January 1, 2023. The joint venture was organized as the Rhode Island VLT
Company, LLC, with IGT owning 60% of the membership interests and Bally’s or its affiliates owning 40% of the membership
interests (“RI Joint Venture”). On December 30, 2022, Bally’s Twin River and Bally’s Tiverton purchased additional machines
directly from IGT to effectively own 40% of the machines. On January 1, 2023, Bally’s Twin River and Bally’s Tiverton
contributed all of their machines to the RI Joint Venture in return for an aggregate 40% membership interest, and IGT
contributed all of their machines at Bally’s Twin River and Bally’s Tiverton to the RI Joint Venture in return for a 60%
membership interest.
Other Laws and Regulations
Our businesses are subject to various laws and regulations in addition to gaming regulations. These laws and regulations
include restrictions and conditions concerning alcoholic beverages, food service, smoking, environmental matters, employees
and employment practices, currency transactions, taxation, zoning and building codes, marketing and advertising and data
privacy. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations
could be enacted. Material changes to any of the laws, rules, regulations. or ordinances to which we are subject, new laws or
regulations or material differences in interpretations by courts or governmental authorities could adversely affect our operating
results.
The sale of alcoholic beverages is subject to licensing, control, and regulation by applicable local regulatory agencies. All
licenses are revocable and are not transferable. The agencies involved have full power to limit, condition, suspend or revoke
any license, and any disciplinary action could, and revocation would, have a material adverse effect upon our operations.
Intellectual Property
We develop intellectual property to differentiate our retail casinos, interactive and lottery products from our competitors. Our
brands and technology constitute key business assets. In order to protect our brands, technology and other creative output, we
rely on a combination of trademarks, copyright, patents, trade secrets and contract law to establish and protect our proprietary
rights.
Our core brand in the United States is Bally’s and Bally. We use “Bally’s” in connection with a majority of our land-based
properties. We use variations of “Bally” in connection with our interactive products, including Bally Bet, Bally Sports Live and
Bally Play. The Bally’s and Bally brands are protected by approximately 200 trademark registrations and applications in the US
and foreign jurisdictions. In line with our multi-brand strategy, we register trademarks for brands either directly exploited by us
in the provision of gaming services or for the purpose of licensing to third parties. Following the sale of the Carved-Out
Business in the fourth quarter of 2024, our in-house brands in foreign jurisdictions include Jackpotjoy, Botemania, Vera & John
(in Sweden only) and Bally Bet Sports & Casino. We also operate interactive sites under brand license agreements with third
parties, including the Virgin Games, Rainbow Riches Casino, Double Bubble Bingo and Monopoly Casino brands. In addition,
we hold an exclusive trademark license for Hard Rock in relation to our Hard Rock Biloxi casino. The Hard Rock license
expires in 2027 with an option to renew for two successive ten-year terms.
We create original software code and designs for our interactive gaming, lottery and betting services. Our software code is
primarily protected by copyright and, to a lesser extent, patents. Although our business is not dependent on any one of our
patents or combination of our patents, we file patent applications where we believe it is appropriate to do so. Our Bally’s
Intralot research and development efforts have resulted in 166 granted patents and two additional active patent applications
pending in various stages. We also license patented technology where required for the operation of our business. We protect our
trade secrets and confidential information by nondisclosure agreements and confidentiality clauses.
While we take action to protect our intellectual property rights, there is always a risk that (i) our proprietary rights become
invalidated or unenforceable, (ii) we are unsuccessful in obtaining trademark or patent registrations, (iii) a brand license
agreement is terminated, and (iv) we are unsuccessful in our enforcement efforts and therefore unable to prevent what we
consider to be misuse of our intellectual property assets. The laws of some foreign countries do not protect intellectual property
rights to the same extent as the laws of the United States. Further, third parties may independently develop similar brands and
technologies which would negatively impact the value of our intellectual property.
13
Corporate Information
We were incorporated in Delaware on March 1, 2004. Our principal executive offices are located at 100 Westminster Street,
Providence, Rhode Island 02903, and our telephone number is (401) 475-8474. Our website address is www.Ballys.com. The
information that is contained in, or that is accessible through, our website is not part of this filing.
Available Information
We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and
Exchange Commission (the “SEC”). These filings are available on the SEC’s website at www. These filings are also available on the SEC’s website at www. sec.gov. We also make our
Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and all amendments to
these reports available free of charge through our corporate website as soon as reasonably practicable after such reports are filed
with, or furnished to, the SEC. In addition, our Code of Business Conduct, Corporate Governance Guidelines and charters of
the Audit Committee, the Compensation Committee and the Nominating and Governance Committee are available on our
website, www.Ballys.com. The information that is contained in, or that is accessed through, our website is not part of this filing.
14
ITEM 1A.RISK FACTORS
In addition to the other information contained in this Annual Report on Form 10-K, the following risk factors should be
considered carefully in evaluating our business. If any of the following risks actually occur, our business, financial condition
and results of operations could be adversely affected. If this were to happen, the value of our securities, including our common
stock, could decline significantly, and investors could lose all or part of their investment.
Risk Factor Summary
Our business is subject to a number of risks and uncertainties, including those highlighted in this item in this Annual Report on
Form 10-K. Some of these principal risks include the following:
General Economic Conditions
•Our business is particularly sensitive to reductions in discretionary consumer spending.
Competition
•The gaming industry, including retail casinos and iGaming, is very competitive and increased competition, including
through legislative legalization or expansion of gaming by states in or near where we own facilities or through Native
American gaming facilities, could adversely affect our financial results.
•Portions of our operations are dependent on government contracts, which are generally awarded following lengthy and
competitive government bidding processes and include performance guarantees.
Compliance, Regulatory and Legal Risks
•We are subject to extensive laws, regulation and licensing, and gaming authorities have significant control over our
operations, which could have an adverse effect on our business.
•Failure to comply with the terms of the Regulatory Agreement could result in a breach and could harm our business.
•We are subject to extensive environmental regulation, which creates uncertainty regarding future environmental
expenditures and liabilities.
•We or certain third parties that we rely on may fail to establish and maintain effective and compliant anti‑money
laundering, counter terrorism financing, safer gambling, fraud detection, risk management and other regulatory
policies, procedures and controls.
•Our business is subject to a variety of US and foreign laws, many of which are unsettled and still developing, and
which could subject us to claims or otherwise harm our business across jurisdictions which could have a material
adverse effect on our financial condition and results of operations.
•Our growth prospects depend on the legal status of real money gaming in various jurisdictions and legalization may
not occur in as many jurisdictions as we expect or may occur at a slower pace than we anticipate which could
adversely affect our future results of operations.
Business Operational Risks
•We are reliant on effective payment processing services from a limited number of providers in each of the markets in
which we operate.
•Our profitability will be dependent, in part, on return to players.
•We extend credit to a portion of our customers, and we may not be able to collect gaming receivables from our credit
customers.
•Declining popularity of games and changes in device preferences of players could have a negative effect on our
business.
•The casino, hotel and hospitality industry is capital intensive and we may not be able to finance development,
expansion and renovation projects, which could put us at a competitive disadvantage.
•We are subject to various construction and development risks in connection with our current and future construction
projects.
•We may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate
acquired businesses into our company or otherwise manage the growth associated with multiple acquisitions.
•We face risks associated with growth and acquisitions.
•Negative perceptions and publicity surrounding the lottery industry could lead to increased regulation.
•Our management identified material weaknesses in our internal control over financial reporting which could, if not
remediated, result in material misstatements in our consolidated financial statements.
•We may be unable to protect our intellectual property rights.
15
•Our results of operations and financial condition could be adversely affected by the occurrence of natural disasters,
such as hurricanes, or other catastrophic events, including war, terrorism and public health crises such as the
COVID-19 pandemic.
Cybersecurity, Data Privacy and Technology Risks
•We rely on information technology, Internet infrastructure and other systems and platforms, and any failures, errors,
defects or disruptions in our systems or platforms could diminish our brand and reputation, subject us to liability,
disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our operating results
and growth prospects.
•Our business may be harmed by cybersecurity and data privacy incidents.
•We may use AI in our business, and challenges with properly managing its use could result in reputational harm,
competitive harm and legal liability, and could have adverse effects on our business, operating results, and financial
condition.
Financing Risks
•Our debt agreements, the Regulatory Agreement and other future indebtedness contain or may contain restrictive
covenants that may limit our operating flexibility.
•Servicing our indebtedness and funding our other obligations requires a significant amount of cash, and our ability to
generate sufficient cash depends on many factors, some of which will be beyond our control.
Risks Related to our Common Stock
•The market price of our common stock could fluctuate significantly.
•Our largest shareholder owns a majority of our outstanding common stock, which could limit the ability of other
shareholders to influence corporate matters.
•We are a “controlled company” within the meaning of the corporate governance standards of NYSE. As a result, we
qualify for exemptions from certain corporate governance standards and our shareholders do not have the same
protections afforded to shareholders of companies that are subject to such requirements.
•We are not paying dividends and any decision to do so in the future will be at the discretion of our Board.
General Economic Conditions
Our business is particularly sensitive to periodic reductions in discretionary consumer spending.14Our business is particularly sensitive to reductions in discretionary consumer spending.
Our business is particularly sensitive to periodic reductions in discretionary consumer spending.14Our business is particularly sensitive to reductions in discretionary consumer spending. Demand for entertainment and
leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult
to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, economic
slowdowns, sustained high levels of unemployment and rising prices or the perception by consumers of weak or weakening
economic conditions, may reduce our users’ disposable income or result in fewer individuals engaging in entertainment and
leisure activities, such as visiting casinos and casino hotel properties, free-to-play games, sports betting, iCasino and online
bingo. A period of sustained inflation, particularly in the US, European Union (“EU”) and UK, could materially impact our
business. The effects of inflation on discretionary consumer spending could result in the reduction of the demand for
entertainment and leisure activities. Moreover, we rely on the strength of regional and local economies in the US for the
performance of each of our properties. As a result, we cannot ensure that demand for our offerings will remain constant.
Adverse developments affecting economies throughout the world including a general tightening of the availability of credit,
increasing energy costs, rising prices, inflation, acts of war or terrorism, natural disasters, declining consumer confidence,
significant declines in the stock market or epidemics, pandemics or other health-related events or widespread illnesses, like the
COVID-19 pandemic, could lead to a reduction in visitors to our properties, including those that stay in our hotels, or
discretionary spending by our customers on entertainment and leisure activities, which could adversely affect our business,
financial condition and results of operations.
Competition
The gaming industry, including retail casinos and iGaming, is very competitive and increased competition, including
through legislative legalization or expansion of gaming by states in or near where we own facilities or through Native
American gaming facilities, could adversely affect our financial results.
We face significant competition in all areas in which we conduct our business.We face significant competition in all of the areas in which we conduct our business. Increased competitive pressures may adversely
affect our ability to continue to attract customers or affect our ability to compete efficiently.
16
Several of our casinos and resorts are in jurisdictions that restrict gaming to certain areas and/or may be affected by state laws
that currently prohibit or restrict gaming operations. We also face the risk that existing casino licensees will expand their
operations and the risk that Native American gaming will continue to grow. Budgetary and other political pressures faced by
state governments could lead to intensified efforts directed at the legalization of gaming in jurisdictions where it is currently
prohibited. The legalization of gaming in such jurisdictions could be an expansion opportunity for our business, or create
competitive pressures, depending on where the legalization occurs and our ability to capitalize on it. Our ability to attract
customers to the existing casinos which we own could be significantly and adversely affected by the legalization or expansion
of gaming in certain jurisdictions and by the development or expansion of Native American casinos in areas where our
customers may visit.
In addition, our competitors may refurbish, rebrand, or expand their casino offerings, which could result in increased
competition. Furthermore, changes in ownership may result in improved quality of our competitors’ facilities, which may make
such facilities more competitive. Certain of our competitors are large gaming companies with greater name recognition,
marketing efforts and financial resources. In some instances, particularly in the case of Native American casinos, our
competitors pay lower taxes or no taxes. These factors create additional challenges for us in competing for customers and
accessing cash flow or financing to fund improvements for our casino and entertainment products that enable us to remain
competitive.
We also compete with other forms of legalized gaming and entertainment such as bingo, pull-tab games, card parlors,
sportsbooks, pari-mutuel or simulcast betting on horse and dog racing, state-sponsored lotteries, instant racing machines, VLTs
(including racetracks that offer VLTs) and video poker terminals and, in the future, we may compete with gaming or
entertainment at other venues. Further competition from online lotteries and other online wagering gaming services, which
allow their customers to wager on a wide variety of sporting events and play Las Vegas-style casino games from home, could
divert customers from the facilities we own and thus adversely affect our business. Such online wagering services are likely to
expand in future years and become more accessible to domestic gamblers as a result of US Department of Justice positions
related to the application of federal laws to intrastate online gaming and initiatives in some states to consider legislation to
legalize intrastate online wagering. The law in this area has been rapidly evolving, and additional legislative developments may
occur at the federal and state levels that would accelerate the proliferation of certain forms of online gaming in the US.
We may also face competition from other gaming facilities which are able to offer sports wagering services (including mobile
sports wagering) following the enactment of applicable legislation. Numerous states that border the states in which we operate
have pending or proposed legislation which would allow for sports betting, each of which could have an adverse effect on our
financial results.
The online gambling industry is highly competitive and we expect more competitors to enter the sector. With several thousand
online gambling sites accessible to potential customers around the world with little product differentiation, there is arguably an
excess of suppliers. Online and offline advertising is widespread, with operators competing for affiliates and customers who are
attracted by sign-up bonuses and other incentives.
Existing and new competitors may also increase marketing spending, including to unprofitable levels, in an attempt to distort
the online gambling market to build market share quickly. Some of our competitors have or will have significantly greater
financial, technical, marketing and sales resources and may be able to respond more quickly to changes in customer needs.
Additionally, these competitors may be able to devote a greater number of resources to the enhancement, promotion and sale of
their games and gaming systems. Our future success is or will be dependent upon our ability to retain our current customers and
to acquire new customers. Failure to do so could result in a material adverse effect on our business, financial condition and
results of operations.
Portions of our operations are dependent on government contracts, which are generally awarded following lengthy and
competitive government bidding processes and include performance guarantees.
We routinely engage in lengthy and highly competitive government bidding processes, which have resulted in contracts with
government entities across various jurisdictions. Our contracts contain terms and conditions and performance guarantees that
we must comply with throughout their term. Any delays in project execution could expose us to the risk of financial liabilities,
including the payment of damages and/or increased insurance premiums associated with the performance guarantees, which
could materially adversely affect our business.
17
Compliance, Regulatory and Legal Risks
We are subject to extensive laws, regulation and licensing, and gaming authorities have significant control over our
operations, which could have an adverse effect on our business.
Our ownership and operation of casino gaming, horse racing facilities, sports betting, VLTs and online offerings are subject to
extensive regulation, and regulatory authorities have broad powers with respect to the licensing of these businesses, and may
revoke, suspend, condition, fail to renew or limit our gaming or other licenses, impose substantial fines and take other actions,
each of which poses a significant risk to our business, results of operations and financial condition. We currently hold all
licenses and related approvals necessary to conduct our present operations but must periodically apply to renew many of these
licenses and registrations and have the suitability of certain of our directors, officers and employees renewed. There can be no
assurance that we will be able to obtain such renewals or that we will be able to obtain future approvals that would allow us to
expand our gaming operations. Any failure to maintain or renew existing licenses, registrations, permits or approvals would
have a material adverse effect on us. As we expand our gaming operations in our existing jurisdictions or to new areas, we may
have to meet additional suitability requirements and obtain additional licenses, registrations, permits and approvals from
gaming authorities in these jurisdictions. The approval process can be time-consuming and costly and we cannot be sure that we
will be successful. In addition, the loss of a license in one jurisdiction could trigger the loss of a license or affect our eligibility
for a license in another jurisdiction. Furthermore, if additional gaming laws or regulations are adopted in jurisdictions where we
operate, these regulations could impose additional restrictions or costs that could have a significant adverse effect on us.
Gaming authorities can generally require that any beneficial owner of our securities file an application for a finding of
suitability. If a gaming authority requires a record or beneficial owner of our securities to file a suitability application, the
owner must generally apply for a finding of suitability within 30 days or at an earlier time prescribed by the gaming authority.
The gaming authority has the power to investigate such an owner’s suitability and the owner must pay all costs of the
investigation. If the owner is found unsuitable, then the owner may be required by law to dispose of our securities.
Our officers, directors and key employees are also subject to a variety of regulatory requirements and various licensing and
related approval procedures in the various jurisdictions in which we operate. If any applicable gaming authority were to find
any of our officers, directors or key employees unsuitable for licensing or unsuitable to continue having a relationship with us,
we would have to sever all relationships with that person. Furthermore, the applicable gaming authority may require us to
terminate the employment of any person who refuses to file appropriate applications. Either result could adversely affect our
gaming operations.
Applicable gaming laws and regulations may restrict our ability to issue certain securities, incur debt and undertake other
financing activities. Such transactions would generally require notice and/or approval of applicable gaming authorities, and our
financing counterparties, including lenders, might be subject to various licensing and related approval procedures in the various
jurisdictions in which we conduct gaming operations. Applicable gaming laws further limit our ability to engage in certain
competitive activities and impose requirements relating to the composition of our Board and senior management personnel. If
gaming regulatory authorities were to find any person unsuitable with regard to their relationship to us or any of our
subsidiaries, we would be required to sever our relationship with that person, which could materially adversely affect our
business.
We are subject to numerous laws that may expose us to liabilities or have a significant adverse impact on our operations.We are subject to numerous federal, state and local laws that may expose us to liabilities or have a significant adverse impact on our operations.
Changes to any such laws could have a material adverse effect on our operations and financial condition.
Our business is subject to a variety of laws, rules, regulations, and ordinances.Our business is subject to a variety of federal, state and local laws, rules, regulations and ordinances. These laws and regulations include, but are not
limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions,
taxation, anti-money laundering measures, vulnerable customer protections, data privacy, zoning and building codes and
marketing and advertising and game design. Such laws and regulations could change or could be interpreted differently in the
future, or new laws and regulations could be enacted. Material changes to any of the laws, rules, regulations or ordinances to
which we are subject, new laws or regulations or material differences in interpretations by courts or governmental authorities
could have an adverse effect on our business, financial condition and results of operations.
Many of our employees, especially those that interact with our customers, receive a base salary or wage that is established by
applicable laws that establish a minimum hourly wage that is, in turn, supplemented through tips and gratuities from customers.
From time to time, lawmakers have increased the minimum wage. It is difficult to predict when such increases may take place.
Any such change to the minimum wage could have a material adverse effect on our business, financial condition and results of
operations.
18
The sale of alcoholic beverages is a highly regulated and taxed business. In the US, federal, state and local laws and regulations
govern the production and distribution of alcoholic beverages, including permitting, licensing, trade practices, labeling,
advertising, marketing, distributor relationships and related matters. Federal, state and local governmental entities also levy
various taxes, license fees and other similar charges and may require bonds to ensure compliance with applicable laws and
regulations. Failure to comply with applicable federal, state or local laws and regulations could result in higher taxes, penalties,
fees and suspension or revocation of permits, licenses or approvals and could have a material adverse effect on our business,
financial condition and results of operations. From time to time, local and state lawmakers, as well as special interest groups,
have proposed legislation that would increase the federal and/or state excise tax on alcoholic beverages or certain types of
alcoholic beverages. If federal or state excise taxes are increased, we may have to raise prices to maintain our current profit
margins. Higher taxes may reduce overall demand for alcoholic beverages, thus negatively impacting sales of our alcoholic
beverages at our properties. Further federal or state regulation may be forthcoming that could further restrict the distribution and
sale of alcohol products. Any material increases in taxes or fees or the adoption of additional taxes, fees or regulations could
have a material adverse effect on our business, financial condition and results of operations.
Legislation in various forms to ban or substantially curtail indoor tobacco smoking in public places have been enacted or
introduced in many jurisdictions, including some of the jurisdictions in which we operate. We believe these smoking
restrictions can significantly impact business volumes. If additional smoking restrictions are enacted within jurisdictions where
we operate or seek to do business, our financial condition, results of operations and cash flows could be adversely affected.
In addition, each restaurant we operate must obtain a food service license from local authorities. Failure to comply with such
regulations could cause our licenses to be revoked or our related restaurant business or businesses to be forced to cease
operations. Moreover, state liquor laws may prevent the expansion of restaurant operations into certain markets.
Failure to comply with the terms of the Regulatory Agreement could result in a breach and could harm our business.
We are currently a party to the Regulatory Agreement with Rhode Island regulatory agencies. The Regulatory Agreement
imposes certain affirmative and negative covenants on us. For more detail on the Regulatory Agreement see the section entitled
“Governmental Gaming Regulation” in “Item I. Business” of this Annual Report on Form 10-K. A failure to comply with the
provisions in the Regulatory Agreement could subject us to injunctive or monetary relief, payments to the Rhode Island
regulatory agencies and ultimately the revocation or suspension of our licenses to operate in Rhode Island. Any such remedy
could adversely affect our business, financial condition and results of operations. Among other things, the Regulatory
Agreement prohibits us and our subsidiaries from owning, operating, managing or providing gaming specific goods and
services to any gaming facilities in Rhode Island (other than Bally’s Twin River and Bally’s Tiverton), Massachusetts,
Connecticut or New Hampshire, which may adversely affect our growth and market opportunity in those states.
We are subject to extensive environmental regulation, which creates uncertainty regarding future environmental
expenditures and liabilities.
We are subject to various environmental laws and regulations that govern activities that may have adverse environmental
effects, such as discharges to air and water, as well as the management and disposal of solid, animal and hazardous wastes and
exposure to hazardous materials. These laws and regulations, which are complex and subject to change, include US
Environmental Protection Agency regulations. In addition, our horse racing facility in Colorado is subject to state laws and
regulations that address the impacts of manure and wastewater generated by concentrated animal feeding operations (“CAFO”)
on water quality, including storm water discharges. CAFO regulations include permit requirements and water quality discharge
standards. Enforcement of CAFO regulations has been receiving increased governmental attention. Compliance with these and
other environmental laws can, in some circumstances, require significant capital expenditures. For example, we may incur
future costs under existing and new laws and regulations pertaining to storm water and wastewater management at our
racetracks. Moreover, violations can result in significant penalties and, in some instances, interruption or cessation of
operations.
We are also subject to laws and regulations that create liability and cleanup responsibility for releases of regulated materials
into the environment. Certain of these laws and regulations impose strict, and under certain circumstances joint and several,
liability on the current or previous owner or operator of property for the costs of remediating regulated materials on or
emanating from our property. The costs of investigation, remediation or removal of those substances may be substantial. The
presence of, or failure to remediate properly, such materials may adversely affect the ability to sell or rent such property or to
borrow funds using such property as collateral. Additionally, as an owner or manager of real property, we could be subject to
claims by third parties based on damages and costs resulting from environmental contamination at or emanating from third-
party sites. These laws typically impose clean-up responsibility and liability without regard to whether the owner or manager
knew of or caused the presence of the contaminants and the liability under those laws has been interpreted to be joint and
several unless the harm is divisible and there is a reasonable basis for allocation of the responsibility. In addition, environmental
requirements address the impacts of development on wetlands.
19
The possibility exists that contamination, as yet unknown, may exist on our properties. There can be no assurance that we will
not incur expenditures for environmental investigations or remediation in the future.
We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our business and
financial condition.
From time to time, we are named in lawsuits or other legal proceedings relating to our businesses. In particular, the nature of
our business subjects us to the risk of lawsuits filed by customers, past and present employees, shareholders, competitors,
business partners and others in the ordinary course of business. As with all legal proceedings, no assurances can be given as to
the outcome of these matters. Moreover, legal proceedings can be expensive and time consuming, and we may not be successful
in defending or prosecuting these lawsuits, which could result in settlements or damages that could adversely affect our
business, financial condition and results of operations.
We or certain third parties that we rely on may fail to establish and maintain effective and compliant anti-money laundering
(“AML”), counter terrorism financing, safer gambling, fraud detection, risk management and other regulatory policies,
procedures and controls.
We operate under extremely stringent regulatory requirements in relation to our land-based casinos and online operations,
particularly so in both the United States and the United Kingdom. Regulatory authorities including US agencies and the Great
Britain Gambling Commission (“GBGC”) have increased scrutiny, with the GBGC’s 2025 enforcement priorities shaped by the
2023 White Paper and driven by automation, real‑time monitoring, and specific customer thresholds. We handle significant
amounts of cash in our land-based operations and see a high volume of digital money transactions in our online operations and
are subject to various reporting and AML laws and regulations. Recently, US governmental authorities and the GBGC, have
evidenced an increased focus on compliance with AML laws and regulations in the gaming industry, with the GBGC having
completed a series of high-profile enforcement action against both online operators and land-based casinos for AML failures. In
the UK, safer gambling obligations require operators to identify and act upon indicators of harm in a timely manner, proactively
monitor at risk customers, and adhere to new technical standards. Any violation of AML laws or regulations or of safer
gambling requirements could have a material adverse effect on our business, financial condition and results of operations.
Internal control policies and procedures and employee training and compliance programs that we have implemented to deter
prohibited practices may not be effective in prohibiting our customers, employees, contractors or agents from violating or
circumventing our policies and the law. If we or our employees or agents fail to comply with applicable laws or our policies
governing our operations, we may face investigations, prosecutions and other legal proceedings and actions which could result
in fines, license restrictions, civil penalties, administrative remedies and criminal sanctions. Any such government
investigations, prosecutions or other legal proceedings or actions could have a material adverse effect on our business, financial
condition and results of operations.
The regulatory framework which governs our business, and its interpretation, may be subject to change which we may fail to
anticipate and/or respond to.
Online and land-based gambling operators licensed in the UK and other jurisdictions are obliged to establish and maintain
compliant AML, anti-terrorism, safer gambling, fraud detection, risk management and other regulatory policies, procedures and
controls to mitigate and effectively manage these risks. In the event that they fail to do so, they may be subject to enforcement
action by gambling regulators or other governmental agencies or private action by affected third parties. In the event of a
breach, a range of sanctions may be imposed, including financial penalties or regulatory settlements, public warnings, the
imposition of special operating conditions or license conditions and the suspension or revocation of gambling licenses.
In addition, there is a risk that increased AML regulatory and safer gambling measures in the UK will prove to be challenging
for us. Financial vulnerability checks have been introduced by the GBGC on customers with £150 net deposits over 30 rolling
days based on publicly available data regarding customers. Further financial risk assessments are being considered by the
GBGC to assess the risk of harm of gambling in the context of high-spending remote gambling customers. If we are required to
conduct further financial risk checks on our highest value customers based on non-public information, some may be unwilling
to provide the additional information and/or documentation to ascertain their sources of wealth, the affordability of their leisure
spending with us or their risk of gambling related harm or vulnerability, and to continue to verify such information.
20
We hold licenses issued by the GBGC. The holders of such licenses are bound to meet stringent compliance requirements
relating to matters such as AML, safer gambling, data protection, advertising and consumer rights issues. Compliance with such
requirements is incorporated into the relevant licenses as a licensing condition (or similar) with a corresponding requirement for
us to comply with various requirements. In September 2022, the GBGC began the implementation of updated social
responsibility licensing conditions. All licensees must now have in place effective systems and processes to monitor customer
activity to identify harm or potential harm associated with gambling, from the point when an account is opened. The indicators
licensees must use to identify harm or potential harm associated with gambling include customer spend, patterns of spend, time
spent gambling, gambling behavior indicators, customer-led contact, use of gambling management tools and account indicators.
These requirements may significantly impact our business if we are unable to establish the affordability of customers on the
basis of available evidence and/or because customers are unwilling to provide the information requested.
The failure by any third-party providers or any relevant entity within the Company to establish and maintain effective and
compliant AML, counter terrorism, anti-bribery, fraud detection, regulatory compliance and risk management processes may
have a material adverse effect on our business, financial condition and results of operations.
In carrying out its functions, the GBGC is under a statutory duty to ensure that license holders are operating their businesses in
ways that are reasonably consistent with the licensing objectives set out in the Gambling Act 2005 (currently the primary
legislation governing the licensing and regulation of gambling in Great Britain) (the “Gambling Act”), which are: (1)
preventing gambling from being a source of (or associated with) crime or disorder, or being used to support crime; (2) ensuring
that gambling is conducted in a fair and open way; and (3) protecting children and other vulnerable people from being harmed
or exploited by gambling.
While the objectives of regulation may remain largely stable, the methods that operators are required to employ to meet those
objectives, and the interpretation of those objections by the regulator, are in a state of constant evolution and development. We
must respond adequately to the challenges this presents. If we are found to be in breach of our obligation to comply with such
licensing requirements, then the GBGC may impose a financial penalty on us or impose other sanctions, including removing or
imposing conditions on the relevant gambling licenses. Such action could have a material adverse effect on our financial
performance.
New legislation governing the online gaming industry may be introduced in the UK which limits or restricts our operating
model in that market.
In December 2020, the UK government commenced a review of the Gambling Act. As a result of this review, in April 2023 the
UK government issued proposals to amend the Gambling Act, and these proposals are subject to a series of public
consultations. The UK government proposals are structured around six main themes: (1) online player protections regarding
players and products; (2) marketing and advertising; (3) the powers of the GBGC; (4) dispute resolution and consumer redress;
(5) children and young adults; and (6) land-based gambling. Changes have been introduced, including direct marketing
restrictions on communications with remote gambling customers, new remote game design requirements, financial vulnerability
checks, maximum stake limits, RTS security requirements and provisions on customer deposit prompts and reviews. A statutory
levy to fund research, prevention and treatment of gambling harm has been implemented in place of the previous voluntary
system. There is a risk that the introduction of more stringent, safer gambling and/or AML regulatory measures in the UK may
prove operationally onerous for us. Moreover, the potential for the introduction of further stake, speed and prize limits and the
introduction of deposit, loss and spend limits may operate to impact our financial performance and reduce the long-term growth
opportunities for us in the UK.
The United Kingdom gambling market is undergoing significant regulatory and fiscal changes that may materially impact the
profitability and operations of operators licensed by GBGC. The UK government has implemented major increases in gambling
tax revenues, resulting in a more restrictive and costly operating environment. Effective from April 1, 2026, the Remote
Gaming Duty (RGD) applicable to online gaming revenues, including online slots and casino games, increased from 21% to
40%. Effective from April 1, 2027, the General Betting Duty for remote betting will increase from 15% to 25%, other than for
remote bets on UK horse racing which will remain unchanged. These taxation increases materially raise the tax burden on
remote gambling operators and may significantly reduce operating margins and cash flows generated from UK online gaming
activities. There can be no assurance that operators will be able to offset these increased costs through pricing, operational
efficiencies, or other measures. As a result, these regulatory and fiscal developments could materially and adversely affect our
financial performance.
21
Our business is subject to a variety of US and foreign laws, many of which are unsettled and still developing, and which
could subject us to claims or otherwise harm our business across jurisdictions. Any change in existing regulations or their
interpretation, or the regulatory or prosecutorial climate applicable to our products and services, or changes in tax rules and
regulations or interpretation thereof related to our products and services, could adversely impact our ability to operate our
business as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our
financial condition and results of operations.
We are generally subject to laws and regulations relating to iGaming in the jurisdictions in which we conduct business, as well
as the general laws and regulations that apply to all e-commerce businesses, such as those related to privacy and personal
information, tax and consumer protection. These laws and regulations vary by jurisdiction, and future legislative and regulatory
action, court decisions or other governmental action, which may be affected by, among other things, political pressures,
attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results. Some
jurisdictions have introduced regulations attempting to restrict or prohibit online gaming, while others have taken the position
that online gaming should be licensed and regulated and have adopted or are in the process of considering legislation and
regulations to enable that to happen. The regulatory environment in any particular jurisdiction may change in the future and any
such change could have a material adverse effect on our results of operations.
Future legislative and regulatory action, and court decisions or other governmental action, may have a material impact on our
operations and financial results. Governmental authorities could view us as having violated local laws, despite our efforts to
obtain all applicable licenses or approvals. There is also risk that civil and criminal proceedings, including class actions brought
by or on behalf of prosecutors or public entities or incumbent monopoly providers, or private individuals, could be initiated
against us, Internet service providers, credit card and other payment processors in the iGaming industry. Such potential
proceedings could involve substantial litigation expense, penalties, fines, seizure of assets, injunctions or other restrictions
being imposed upon our licensees or other business partners, while diverting the attention of key executives. Such proceedings
could have a material adverse effect on our business, financial condition and results of operations, as well as impact our
reputation.
Our growth prospects depend on the legal status of real money gaming in various jurisdictions and legalization may not
occur in as many jurisdictions as we expect, or may occur at a slower pace than we anticipate. Additionally, even if
jurisdictions legalize real money gaming, this may be accompanied by legislative or regulatory restrictions and/or taxes that
make it impracticable or less attractive to operate in those jurisdictions, or the process of implementing regulations or
securing the necessary licenses to operate in a particular jurisdiction may take longer than we anticipate, which could
adversely affect our future results of operations and make it more difficult to meet our expectations for financial
performance.
Several jurisdictions have legalized or are currently evaluating the legalization of real money gaming, and our business,
financial condition, results of operations and business prospects are significantly dependent upon the status of legalization in
these jurisdictions. Our business plan is partially based upon the legalization of real money gaming in additional jurisdictions
and the legalization may not occur as anticipated. Additionally, if a large number of additional jurisdictions enact real money
gaming legislation and we are unable to obtain, or are otherwise delayed in obtaining, the necessary licenses to operate iGaming
websites in jurisdictions where such games are legalized, our future growth in iGaming could be materially impaired.
As we enter new jurisdictions, governments may legalize real money gaming in a manner that is unfavorable to us. As a result,
we may encounter legal, regulatory and political challenges that are difficult or impossible to foresee and which could result in
an unforeseen adverse impact on planned revenues or costs associated with the new opportunity. Jurisdictions also impose
substantial tax rates on iGaming revenue. Tax rates, whether federal- or state-based, that are higher than we expect will make it
more costly and less desirable for us to launch in a given jurisdiction, while tax increases in any of our existing jurisdictions
may adversely impact profitability.
Therefore, even in cases in which a jurisdiction purports to license and regulate iGaming, the licensing and regulatory regimes
can vary considerably in terms of business-friendliness, and at times may be intended to provide incumbent operators with
advantages over new licensees. Therefore, some “liberalized” regulatory regimes are considerably more economically viable
than others.
22
We derive revenues from players located in jurisdictions in which we do not hold a license.
In certain jurisdictions, online gambling is either not regulated at all, is subject to very limited regulation or its legality is
unclear. These jurisdictions are commonly referred to in the gaming industry as “unregulated jurisdictions” as it is not possible
to obtain a license. Certain of our products are made available to players in unregulated jurisdictions. The relevant transactions
in such unregulated jurisdictions and the associated player relationships that underpin them are generally regulated by “point of
supply” gambling regimes. We hold a point-of-supply license in Gibraltar and therefore, transactions are in fact heavily
regulated but are not themselves regulated in the jurisdiction within which the player is ultimately located.
Operators within the online gambling industry, including Bally’s, have commonly taken a risk-based approach when supplying
their online gambling services into jurisdictions in which it is not possible to obtain a gambling license. In these circumstances,
online gambling operators may justify their remote supply of gambling services for a number of reasons, including a “country
of origin” basis which asserts that it is lawful to supply online gambling services remotely from a jurisdiction in which a
gambling license is held in another jurisdiction, unless there is something within the laws of that second jurisdiction that
explicitly outlaws such provision and explicitly applies to such inward supply emanating from outside its borders.
There is a risk that such jurisdictions may enact regulations relating to online real money gaming and that we may be required
to register our activities or obtain licenses (or obtain further registrations or licenses, as applicable), pay taxes, royalties or fees
or that the operation of online gambling businesses in such jurisdictions may be prohibited entirely. The implementation of
additional licensing or regulatory requirements, prohibitions or payments in such jurisdictions could have an adverse effect on
the viability of our revenue, operations, business or financial performance. Where we or our partners fail to obtain the necessary
registrations or licenses, make the necessary payments or operate in a jurisdiction where online gambling is deemed to be or
becomes prohibited, we or our partners may be subject to investigation, penalties or sanctions or forced to discontinue
operations entirely in relation to that jurisdiction. Any such actions may also have an adverse impact on the way our regulators
regulate us in the jurisdictions in which we hold licenses.
Certain of our technology providers, payment processing partners or other suppliers of content or services (collectively,
“Infrastructure Services”) may cease to provide, or limit the availability of, such Infrastructure Services to the extent we derive
revenue from, or makes such Infrastructure Services available to customers in, unregulated jurisdictions. There is no assurance
that we would be able to identify suitable or economical replacements if such Infrastructure Services become unavailable.
There is also a risk that civil and criminal proceedings, including class actions brought by or on behalf of prosecutors or public
entities, incumbent monopoly providers or private individuals, could be initiated against us or providers of our Infrastructure
Services in unregulated jurisdictions. Such potential proceedings could assert that online gambling services have not been
lawfully supplied into the domestic market and could involve substantial litigation expense, penalties, fines, seizure of assets,
injunctions or other restrictions being imposed on us or our business partners and may divert the attention of our key
executives. If we become subject to any such investigations, proceedings and/or penalties in one jurisdiction, this may lead to
investigations, proceedings and/or penalties arising in other jurisdictions in which we operate and/or hold a license. Such
investigations, proceedings and/or penalties could have a material adverse effect on our business, financial condition and results
of operations, as well as our reputation.
We are exposed to exchange rate risks.
Foreign exchange risk arises when individual group entities enter into transactions denominated in a currency other than their
functional currency. Our policy is, where possible, to allow our entities to settle liabilities denominated in their functional
currency with the cash generated from their own operations in that currency. Where our entities have liabilities denominated in
a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already
denominated in that currency will, where possible, be transferred from elsewhere within Bally’s. Apart from these particular
cash flows, we aim to fund expenses and investments in the respective currency and to manage foreign exchange risk at a local
level by matching the currency in which revenue is generated and expenses are incurred, as well as by matching the currency of
our debt structure with the currency that cash is generated in. However, no assurance can be given that these policies will
deliver all, or substantially all, of the expected benefits.
A vast majority of the revenues currently generated by Gamesys, our wholly owned subsidiary, are from the UK and are
conducted in British Pound Sterling (“GBP”) and are therefore susceptible to any movements in exchange rates between GBP
and US Dollars (“USD”). Any exchange rate risk may materially adversely affect our business, financial condition and results
of operations.
23
Our substantial activities in foreign jurisdictions may be affected by factors outside of our control.
A portion of our operations are conducted in non-US jurisdictions.A significant portion of our operations are conducted in non-US jurisdictions. As such, our operations may be adversely affected by
changes in foreign government policies and legislation (including gambling legislation) or social instability and other factors
that are not within our control, including renegotiation or nullification of existing contracts or licenses, changes in gambling
policies, regulatory requirements or the personnel administering them, currency fluctuations and devaluations, exchange
controls, economic sanctions, tax increases, retroactive tax claims, changes in taxation policies, risk of terrorist activities,
revolution, border disputes, implementation of tariffs and other trade barriers and protectionist practices, volatility of financial
markets and fluctuations in foreign exchange rates, difficulties in the protection of intellectual property, labor disputes and other
risks arising out of foreign governmental sovereignty over the areas in which operations are conducted. Our operations may
also be adversely affected by laws and policies of such foreign jurisdictions affecting foreign trade, taxation and investment.
Accordingly, our activities in foreign jurisdictions could be substantially affected by factors beyond our control, any of which
could have a material adverse effect on our business, financial condition and results of operations.
In the event of a dispute arising in connection with operations in a foreign jurisdiction where we conduct business, we may be
subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions
of the courts of the US or enforcing US judgments in such other jurisdictions. We may also be hindered or prevented from
enforcing their rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity.
We may also enter into agreements and conduct activities outside of the jurisdictions in which we currently carry on business,
which expansion may present challenges and risks as a result of the factors described above that we have not faced in the past,
any of which could have a material adverse effect on our business, financial condition and results of operations.
Our activities are affected by the General Data Protection Regulation, as implemented in each of the UK and the EU
(collectively, “GDPR”).
We are required to comply with the GDPR to the extent that we either: (1) have customers located in the UK and the EU or (2)
conduct the processing of personal data in the UK and the EU. The impact of GDPR is particularly relevant to our customer
data, marketing activities, information security systems, and associated procedures. The GDPR and associated e-privacy laws
impose constraints on the ability of a data controller to profile and market to customers. Data subjects have the right to object to
a controller processing their data in certain circumstances, including the right to object to their data being processed for the
purposes of direct marketing. Controllers of personal data are required to maintain written records as to how they comply with
GDPR and provide more detailed information to data subjects in relation to how their data is being processed. In addition,
updated e-privacy laws are under consideration in the EU to update the legislative rules applicable to digital and online data
processing and to align e-privacy laws to GDPR. The GBGC has separately introduced limitations on the use of personal data
by holders of operating licenses, particularly in relation to direct marketing.
The GDPR also increased the level of fines which may be imposed for a breach of data protection laws, with the maximum fine
(in the most serious cases of a breach of GDPR) being the higher of €20 million (£17.5 million for the UK) or four percent of
annual worldwide turnover. In certain instances, we could be held responsible for breaches committed by the third-party service
providers which we use or by other third parties with whom we share personal data.
Many of the obligations imposed on controllers by GDPR are expressed as high-level principles, such as the obligation to act
fairly with respect to the processing of personal data. The manner in which the data regulators and courts will interpret and
apply GDPR is and will continue to evolve over time. In addition, as a result of Brexit, the application of GDPR in the UK and
the EU will increasingly diverge, posing even greater compliance challenges for businesses operating in these jurisdictions.
These procedures and policies continually affect our business by constraining our data processing activities and increasing our
operational and compliance costs. Additional updates to these policies and procedures and associated operational changes may
be required and costs incurred to comply with updates to e-privacy laws.
If our or any third-party service providers’ data processing activities breach GDPR (or associated e-privacy laws), then we
could, whether as a result of a failure to implement adequate policies and procedures or otherwise, face significant fines and/or
the revocation of existing licenses and/or the refusal of new applications for licenses, as well customer claims. class actions and
reputational damage. The resultant losses suffered could materially adversely affect our business, financial condition and results
of operations. There can be no assurances that we would be able to recoup such losses, whether in whole or in part, from our
third-party service providers or insurers.
24
Business Operational Risks
We will be reliant on effective payment processing services from a limited number of providers in each of the markets in
which we operate.
The provision of convenient, trusted, fast and effective payment processing services to our customers and potential customers is
critical to our business. If there is any deterioration in the quality of the payment processing services provided to these
customers or any interruption to those services (including with respect to system intrusions, unauthorized access or
manipulation), or if such services are only available at an increased cost to us or our customers or are terminated and no timely
and comparable replacement services are found, our customers and potential customers may be deterred from using our
products. In addition, our inability to secure payment processing services in markets into which we intend to expand may
seriously impair our growth opportunities and strategies. Any of these occurrences may have a material adverse effect on our
business, financial condition and results of operations.
Furthermore, a limited number of banks and credit card companies process online gambling related payments as a matter of
internal policy and any capacity to accept such payments may be limited by the regulatory regime of a given jurisdiction. The
introduction of legislation or regulations restricting financial transactions with online gambling operators, other prohibitions or
restrictions on the use of credit cards and other banking instruments for online gambling transactions may restrict our ability to
accept payments from our customers. These restrictions may be imposed as a result of concerns related to fraud, payment
processing, AML or other issues related to the provision of online gambling services. A number of issuing banks or credit card
companies may from time to time reject payments to us that are attempted to be made by our customers. Should such
restrictions and rejections become more prevalent, or any other restriction on payment processing be introduced, gambling
activity by our customers could be adversely affected, which in turn could have a material adverse effect on our business,
financial condition and results of operations.
In addition, we are subject to the risk of credit card chargebacks, which may also result in possible penalties. A chargeback is a
credit card originated deposit transaction to a player account with an operator that is later reversed or repudiated. The risk of
such chargeback transactions is greater in respect of certain markets and certain payment methods. We recognize revenue upon
the first loss of the player on amounts tendered, and any credit card chargebacks are then deducted from their revenues. Even
though security measures are in place, high rates of credit card chargebacks could result in credit card associations levying
additional costs and fines or withdrawing their service and could have a material adverse effect on our business, financial
condition and results of operations.
Our VLTs and table games hold percentages may fluctuate.
The gaming industry is characterized by an element of chance and our casino guests’ winnings depend on a variety of factors,
some of which are beyond our control. In addition to the element of chance, hold percentages (the ratio of net win to total
amount wagered) are affected by other factors, including players’ skill and experience, the mix of games played, the financial
resources of players, the volume of bets placed and the amount of time played. The variability of our hold percentages has the
potential to adversely affect our business, financial condition and results of operations.
Our profitability will be dependent, in part, on return to players.
The revenue from certain of our gaming products depends on the outcome of random number generators built into the gaming
software running the games made available to customers. Return to player is measured by dividing the amount of real money
won by players on a particular game by the total real money wagers over a particular period on that game. An increasing return
to player may negatively affect revenue as it represents a larger amount of money being won by players. Return to player is
driven by the overall random number generator outcome, the mechanics of different games and jackpot winnings. Each game
utilizes a random number generating engine; however, generally the return to player fluctuates in the short-term based on large
wins or jackpots or a large share of wagers made for higher-payout games. To the extent we are unable to set, or fail to obtain, a
favorable return to player in our (or a third-party supplier’s) gambling software which maximizes revenue, it could have a
material adverse effect on our business, financial condition and results of operations.
25
The success, including win or hold rates, of existing or future sports betting and iGaming products depends on a variety of
factors and is not completely controlled by us.
The sports betting and iGaming industries are characterized by an element of chance. Accordingly, we employ theoretical win
rates to estimate what a certain type of sports bet or iGame, on average, will win or lose in the long run. Net win is impacted by
variations in the hold percentages, or actual outcomes, on our iGames and sports betting we offer to our users. We use the hold
percentages as an indicator of an iGame’s or sports bet’s performance against its expected outcome. Although each iGame or
sports bet generally performs within a defined statistical range of outcomes, actual outcomes may vary for any given period. In
addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the
spread of limits and factors that are beyond our control, such as a user’s skill, experience and behavior, the mix of games
played, the financial resources of users, the volume of bets placed and the amount of time spent gambling. As a result of the
variability in these factors, the actual win rates on our online iGames and sports bets may differ from the theoretical win rates
we have estimated and could result in the winnings of our iGame’s or sports bet’s users exceeding those anticipated. The
variability of win rates (hold rates) also have the potential to negatively impact our financial condition, results of operations and
cash flows.
Our success also depends in part on our ability to anticipate and satisfy user preferences in a timely manner. As we will operate
in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to
changing consumer preferences that cannot be predicted with certainty. We will need to continually introduce new offerings
and identify future product offerings that complement our existing platforms, respond to our users’ needs and improve and
enhance our existing platforms to maintain or increase our user engagement and growth of our business. We may not be able to
compete effectively unless our product selection keeps up with trends in the digital sports entertainment and gaming industries
in which we compete, or trends in new gaming products.
We extend credit to a portion of our customers, and we may not be able to collect gaming receivables from our credit
customers.
We conduct our gaming activities on a credit and cash basis at many of our properties. Any such credit we extend is unsecured.
Table game players typically are extended more credit than slot players, and high-stakes players typically are extended more
credit than customers who tend to wager lower amounts. High-end gaming is more volatile than other forms of gaming, and
variances in win-loss results attributable to high-end gaming may have a significant positive or negative impact on cash flow
and earnings in a particular period. We extend credit to those customers whose level of play and financial resources warrant, in
the opinion of management, an extension of credit. These large receivables could have a significant impact on our results of
operations if deemed uncollectible. Gaming debts evidenced by a credit instrument, including what is commonly referred to as a
“marker,” and judgments on gaming debts are enforceable under the current laws of the jurisdictions in which we allow play on
a credit basis, and judgments on gaming debts in such jurisdictions are enforceable in all US states under the Full Faith and
Credit Clause of the US Constitution; however, other jurisdictions may determine that enforcement of gaming debts is against
public policy. Although courts of some foreign nations will enforce gaming debts directly and the assets in the US of foreign
debtors may be reached to satisfy a judgment, judgments on gaming debts from US courts are not binding on the courts of many
foreign nations.
Declining popularity of games and changes in device preferences of players could have a negative effect on our business.
Revenue from online games tends to decline over time after reaching a peak of popularity and player usage. The speed of this
decline is referred to as the decay rate of a game. As a result of this natural decline in the life cycle of our products, our business
depends on our ability and the ability of our third-party partners to consistently and timely launch new games across multiple
platforms and devices that achieve significant popularity. Our ability to successfully launch, sustain and expand games as
applicable, largely will depend on our ability to, amongst other things: (1) anticipate and effectively respond to changing game
player interests and preferences; (2) anticipate or respond to changes in the competitive landscape; (3) develop, sustain and
expand games that are fun, interesting and compelling to play; (4) minimize launch delays and cost overruns on new games; (5)
minimize downtime and other technical difficulties; (6) acquire leading technology and high quality personnel; and (7) comply
with constraints on game design and/or functionality imposed by regulators. There is a risk that we may not launch any new
games according to schedule, or that those games do not attract and retain a significant number of players, which could have a
negative effect on our business, financial condition and results of operations.
Furthermore, more individuals are using non-PC/laptop devices to access the internet and versions of our technology developed
for these devices may not be widely adopted by users of such devices. If we are unable to attract and retain a substantial number
of alternative device users to our gambling services or if we are slow to develop products and technologies that are more
compatible with non-PC/laptop communications devices relative to our competitors, we may fail to capture a significant share
of an increasingly important portion of the market for online gambling services.
26
In addition to offering popular new games, we must extend the life of the existing games which we make available to users, in
particular the most successful games. While it is difficult to predict when revenues from any such existing games will begin to
decline, for a game to remain popular, we must constantly enhance, expand or upgrade the relevant game with new features that
players find attractive. There is a risk that we may not be successful in enhancing, expanding or upgrading our current games or
any new games in the future and, in addition, regulators may introduce new rules that limit functionality within existing games.
Should we not succeed in sufficiently offsetting the effects of declining popularity in the games we make available, this may
have a material adverse effect on our business, financial condition and results of operations.
The casino, hotel and hospitality industry is capital intensive and we may not be able to finance development, expansion and
renovation projects, which could put us at a competitive disadvantage.
Our casino and hotel properties have an ongoing need for renovations and other capital improvements to remain competitive,
including room refurbishments, amenity upgrades and replacement, from time to time, of furniture, fixtures and equipment. We
may also need to make capital expenditures to comply with applicable laws and regulations. Construction projects, such as our
construction of the permanent casino in Chicago, entail significant risks, which can substantially increase costs or delay
completion of a project. Such risks include shortages of materials or skilled labor, unforeseen engineering, environmental or
geological problems, work stoppages, weather interference and unanticipated cost increases. Most of these factors are beyond
our control. In addition, difficulties or delays in obtaining any of the requisite licenses, permits or authorizations from
regulatory authorities can increase the cost or delay the completion of an expansion or development. Significant budget
overruns or delays with respect to expansion and development projects could adversely affect our business and results of
operations.
Renovations and other capital improvements of casino properties in particular require significant capital expenditures. In
addition, any such renovations and capital improvements usually generate little or no cash flow until the projects are completed.
We may not be able to fund such projects solely from cash provided from operating activities. Consequently, we may have to
rely upon the availability of debt or equity capital to fund renovations and capital improvements, and our ability to carry them
out will be limited if we cannot obtain satisfactory debt or equity financing, which will depend on, among other things, market
conditions. We cannot assure you that we will be able to obtain additional equity or debt financing on favorable terms or at all.
Our failure to renovate and maintain gaming and entertainment venues from time to time may put us at a competitive
disadvantage to gaming and entertainment venues offering more modern and better maintained facilities, which could adversely
affect our business, financial condition and results of operations.
We are subject to various construction and development risks in connection with our current and future construction
projects.
Our business is subject to various construction and development risks in connection with construction projects, such as our
construction of the permanent casino in Chicago, the planned development at the former Tropicana Las Vegas and our planned
Bally’s Bronx project. Construction and development projects are often developed in multiple stages involving commercial and
governmental negotiations, site planning, due diligence, permit requests, environmental impact studies, permit applications and
review, marine logistics planning and transportation and end-user delivery logistics, each of which requires significant effort
and dedication to complete. Projects of this type are subject to a number of risks, including, among others:
•engineering, environmental or geological problems;
•shortages or delays in the delivery of equipment and supplies;
•government or regulatory approvals, permits or other authorizations;
•failure to meet technical specifications or adjustments being required based on testing or commissioning;
•construction accidents that could result in personal injury or loss of life;
•lack of adequate and qualified personnel to execute our current and future construction projects;
•weather interference;
•delays in removing current tenants from the proposed sites; and
•potential labor shortages, work stoppages or labor union disputes.
Furthermore, because of the nature of our business, we are dependent on numerous third parties, including local, state and
federal governmental entities that are required to certificate and license our facilities. Delays from such third parties or
governmental entities could prevent us from successfully executing our current and future construction projects. In addition, as
a builder of gaming facilities, we expect to face an intense regulatory process and heightened political pressure to finalize our
construction projects in a timely manner, which subjects us to risks associated with changes in the political views and structure,
government representatives, new regulations, regulatory reviews, employment laws and diligence requirements. Each of these
could make it more difficult, time-consuming and expensive to develop our current and future construction projects.
27
The occurrence of any one of these factors, whatever the cause, could result in unforeseen delays or cost overruns. Delays in the
development beyond our estimated timelines, or amendments or change orders to our construction contracts, could result in
increases to our development costs beyond our original estimates, which could require us to obtain additional financing or
funding and could make our current and future construction projects less profitable than originally estimated or possibly not
profitable at all. Further, any such delays could cause a delay in the receipt of any anticipated revenues. We have experienced
time delays and cost overruns in the construction and development of construction projects in the past as a result of the
occurrence of various of the above factors, and no assurance can be given that we will not experience in the future similar
events, any of which could have a material adverse effect on our business, operating results, cash flows and liquidity.
We may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate
acquired businesses into our company or otherwise manage the growth associated with multiple acquisitions.
Our completed or any future acquisitions, may not enhance our financial performance. Our ability to achieve the expected
benefits of any acquisitions will depend on, among other things, our ability to effectively translate our strategies into revenue,
our ability to retain and assimilate the acquired businesses’ employees, our ability to retain existing customers and suppliers on
terms similar to, or better than, those in place with the acquired businesses, our ability to attract new customers, the adequacy of
our implementation plans, our ability to maintain our financial and internal controls and systems as we expand our operations,
the ability of our management to oversee and operate effectively the combined operations and our ability to achieve desired
operating efficiencies and revenue goals. The integration of the businesses that we acquire might also cause us to incur costs
that are unforeseen or that exceed our estimates, which would lower our future earnings and would prevent us from realizing
the expected benefits of such acquisitions. In some cases, the services provided by the sellers are critical to the ongoing efficient
operation of the properties and may involve costly payments from us to the provider of the services. If the provision of these
services by the sellers is disrupted or given insufficient attention by the sellers, our ability to operate the properties may be
negatively impacted until such time as we are able to take full control over the services. Moreover, we must pay the sellers for
these services and the costs to us for these services may exceed our estimates and these expenses will negatively impact the
results of operations of these properties during these transition periods. Failure to achieve the anticipated benefits of these
acquisitions could result in decreases in the amount of expected revenues and diversion of management’s time and energy and
could adversely affect our business, financial condition and operating results including, ultimately, a reduction in our stock
price.
We face risks associated with growth and acquisitions.
As part of our business strategy, we regularly evaluate opportunities for growth through development of gaming operations in
existing or new markets, through acquiring other gaming entertainment facilities or through redeveloping our existing gaming
facilities. In the future, we may also pursue expansion opportunities, including joint ventures or partnerships, in jurisdictions
where casino gaming is not currently permitted in order to be prepared to develop projects upon approval of casino gaming.
Although we only intend to engage in acquisitions that, if consummated, will be accretive to us and our shareholders,
acquisitions require significant management attention and resources to integrate new properties, businesses and operations. Our
ability to realize the anticipated benefits of acquisitions will depend, in part, on our ability to integrate the acquired businesses
with our businesses. The combination of two independent companies is a complex, costly and time-consuming process. This
process may disrupt the business of either or both of the companies and may not result in the full benefits expected. Potential
difficulties we may encounter as part of the integration process that may negatively impact our earnings or otherwise adversely
affect our business and financial results include, among other things, the following:
•the inability to successfully incorporate acquired assets in a manner that permits us to achieve the full revenue
increases, cost reductions and other benefits anticipated to result from any acquisitions;
•complexities associated with managing the combined business, including difficulty addressing possible differences in
cultures and management philosophies and the challenge of integrating complex systems, technology, networks and
other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers, suppliers,
employees and other constituencies;
•the disruption of, or the loss of momentum in, each of our ongoing businesses;
•inconsistencies in standards, controls, procedures and policies; and
•potential unknown liabilities and unforeseen increased expenses associated with acquisitions.
Additionally, even if integration is successful, the overall integration of acquired assets and businesses may result in material
unanticipated problems, expenses, liabilities, competitive responses, loss of customer and other business relationships and
diversion of management attention. There is also no guarantee that the acquired assets or businesses will generate any of the
projected synergies and earnings growth, and the failure to realize such projected synergies and earnings growth may adversely
affect our operating and financial results and derail any growth plans.
28
There can be no assurance that we will be able to identify, acquire, develop or profitably manage additional companies or
operations or successfully integrate such companies or operations into our existing operations without substantial costs, delays
or other problems. Additionally, there can be no assurance that we will receive gaming or other necessary licenses or approvals
for new projects that we may pursue or that gaming will be approved in jurisdictions where it is not currently approved.
Ballot measures or other voter-approved initiatives to allow gaming in jurisdictions where gaming, or certain types of gaming
(such as slots and sports wagering), was not previously permitted could be challenged, and, if such challenges are successful,
these ballot measures or initiatives could be invalidated. Furthermore, there can be no assurance that there will not be similar or
other challenges to legalized gaming in existing or current markets in which we may operate or have development plans, and
successful challenges to legalized gaming could require us to abandon or substantially curtail our operations or development
plans in those locations, which could have a material adverse effect on our financial condition and results of operations.
There can be no assurance that we will not face similar challenges and difficulties with respect to new development projects,
such as the permanent casino project in Chicago, or expansion efforts that we may undertake, which could result in significant
sunk costs that we may not be able to fully recoup or that otherwise have a material adverse effect on our financial condition
and results of operations. We may not be able to obtain additional financing on acceptable terms or at all. To the extent that we
seek to acquire other businesses in exchange for our common stock, fluctuations in our stock price could adversely affect our
ability to complete acquisitions.
We may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures or
new business strategies.
We have invested in, formed strategic alliances with and announced proposed joint ventures with other companies, such as the
RI Joint Venture, and we may expand those relationships or enter into similar relationships with additional companies which
may require various state approvals which may or may not be granted. These initiatives are typically complex, and we may not
be able to complete anticipated alliance or joint venture transactions, the anticipated benefits of these transactions may not be
realized or the benefits may be delayed. For example, we may not successfully integrate an alliance or joint venture with our
operations, including the implementation of our controls, systems, procedures and policies, or unforeseen expenses or liabilities
may arise that were not discovered during due diligence prior to an investment or entry into a strategic alliance, or a
misalignment of interests may develop between us and the other party. Further, to the extent we share ownership, control or
management with another party in a joint venture, our ability to influence such joint venture may be limited, and we may be
unable to prevent misconduct or implement our compliance or internal control systems. In addition, implementation of a new
business strategy may lead to the disruption of our existing business operations, including distracting management from current
operations. Results of operations from new activities may be lower than our existing activities, and, if a strategy is unsuccessful,
we may not recoup our investments in that strategy. Failure to successfully and timely realize the anticipated benefits of these
transactions or strategies could have an adverse effect on our financial condition or results of operations.
Following the combination of the international interactive business within Bally’s Intralot, there can be no assurance that
Bally’s Intralot will be able to successfully integrate the combined lottery B2B and online gaming B2C businesses.
The integration of the two companies may result in material challenges, including the diversion of management’s attention from
ongoing business concerns; retaining key management and other employees; retaining or attracting business and operational
relationships; faulty assumptions underlying expectations regarding the integration process and associated expenses;
consolidating corporate and administrative infrastructures and eliminating duplicative operations; coordinating geographically
separate organizations; unanticipated issues in integrating information technology, communications and other systems; as well
as potential unknown liabilities, unforeseen expenses relating to integration, or delays associated with the merger transactions.
Accordingly, the future operating results, cash flows and financial condition of the combined company will be affected by its
ability to manage changing business conditions and to implement and adapt its financial controls and reporting systems in
response to the merger transactions.
29
Our business depends, in part, on strategic relationships with third parties. Overreliance on certain third parties or our
inability to extend existing relationships or agree to new relationships may cause unanticipated costs for us and impact our
financial performance in the future.
We have entered into strategic partnerships with the National Hockey League, MLB Professional Development Leagues, LLC,
among others, and may enter into relationships with advertisers, casinos and other third parties in order to attract users to our
platform. These relationships along with providers of online services, search engines, social media, directories and other
websites and e-commerce businesses direct consumers to our platform. In addition, parties with whom we have advertising
arrangements provide advertising services to other companies, including other fantasy sports and gaming platforms with which
we compete. While we believe there are other third parties that could drive users to our platform, adding or transitioning to
them may disrupt our business and increase our costs. In the event that any of our existing relationships or our future
relationships fails to provide services to us in accordance with the terms of our arrangement, or at all, and we are not able to
find suitable alternatives, this could impact our ability to attract consumers cost effectively and harm our business, financial
condition and results of operations.
Our branded sites are heavily reliant on well-known brands owned by third parties.
We operate certain branded sites, including sites branded as Virgin Games, Double Bubble Bingo and Monopoly Casino. All
such branded sites operated by us are reliant on the use of highly trusted and recognizable brands which are owned by third
parties (the “Third Party Brands”). We operate the Third Party Brands pursuant to brand licensing arrangements with the
relevant third party brand owner (the “Brand Owner”). We are contractually required to operate such branded sites in
accordance with those brand licensing arrangements, and any material breach of those requirements may expose us to claims for
breach of contract and/or may lead to the Brand Owner terminating or failing to renew the brand licensing arrangements. We
own the player data in respect of such branded sites, and in the event that the brand licensing arrangements for any of such
branded sites were to be terminated early or not renewed, then we would seek to migrate those players to a different gaming site
operated by us. However, there is a risk that any replacement branded site offered by us may not successfully retain those
players, and if we lose the right to use any of the Third Party Brands, our business, financial condition and results of operations
may be materially adversely affected.
We are exposed to the risk that the reputation of the Third Party Brands may be adversely affected by the activities of third
parties over whom we have no control. For example, we operate the Virgin Games site. The Virgin brand is used by a wide
range of businesses. In the event that the reputation of the Virgin brand was to be adversely affected due to the actions of third
parties, that may affect our business prospects.
Our online business model depends upon the continued compatibility between our apps and the major mobile operating
systems and upon third-party platforms for the distribution of our product offerings, which depend on factors beyond our
control such as the design of third-party operating systems and continued access to our apps on third-party distribution
platforms like the Apple App Store.
Our digital business is dependent on the interoperability of our technology with popular mobile operating systems,
technologies, networks and standards as our users access our online betting and gaming product offerings primarily on mobile
devices. As a result, our business model depends upon the continued compatibility between our app and the major mobile
operating systems, such as the Android and iOS operating systems, and we rely upon third-party platforms for distribution of
our product offerings. We do not have formal or informal relationships with parties that control design of mobile devices and
operating systems and there is no guarantee that popular mobile devices will start or continue to support or feature our product
offerings. Any changes, bugs, technical or regulatory issues in such operating systems, our relationships with mobile
manufacturers and carriers, or in their terms of service or policies that degrade our offerings’ functionality, reduce or eliminate
our ability to distribute our offerings, give preferential treatment to competitive products, limit our ability to deliver high quality
offerings, or impose fees or other charges related to delivering our offerings, could adversely affect our product usage and
monetization on mobile devices. In addition, if any of the third-party platforms used for distribution of our product offerings
were to limit or disable the availability of our app or advertising on their platforms, our ability to generate revenue could be
harmed. These changes could materially impact the way we do business, and if we are unable to adjust to those changes quickly
and effectively, there could be an adverse effect on our business, financial condition, results of operations and prospects.
30
A portion of our casinos are located on leased property. If we default on one or more leases, the applicable lessors could
terminate the affected leases and we could lose possession of the affected casino.
We currently lease certain real property interests underlying several of our Casino properties. Our leases provide that they may
be terminated for a number of reasons, including failure to pay rent, taxes or other payment obligations or the breach of other
covenants contained in the leases. Our leases with GLPI, excluding the Chicago MLA, require annual rent payments of
$233.1 million in 2026, which is subject to escalation annually, and in some instances, obligate us to make specified minimum
capital expenditures with respect to the leased properties. If our business and properties fail to generate sufficient earnings, the
payments required to service the rent obligations under our leases with GLPI could materially and adversely limit our ability to
react to changes in our business and make acquisitions and investments in our properties. Regarding our ground leases, we have
the right to use the leased land; however, we do not hold fee ownership of the underlying land. Accordingly, we have no
interest in the leased land or improvements thereon at the expiration of the ground leases. If our use of the land underlying our
casino properties is disrupted permanently or for a significant period of time, then the value of our assets could be impaired and
our business and operations could be adversely affected. If we were to default on any one or more of these leases, the applicable
lessors could terminate the affected leases and we could lose possession of the affected land and any improvements on the land,
including the hotels and casinos. Further, in the event that any lessor of our leased properties, including GLPI, encounters
financial, operational, regulatory or other challenges, there can be no assurance that such lessor will be able to comply with its
obligations under the applicable lease.
We entered into a lease with GLP and could experience risks associated with the leased property, including risks relating to
lease termination, inability to obtain a satisfactory lease extension, consents and approvals, charges and our relationship
with the landlord, which could have a material adverse effect on our business, financial position or results of operations.
On July 17, 2025, Bally’s Chicago Operating Company, LLC (“Bally’s Chicago OpCo”), an affiliate of the Company, entered
into (a) an amended and restated ground lease (the “Chicago MLA”) with GLP Capital, L.P. (“GLP”) pursuant to which Bally’s
Chicago OpCo leases the property on which it is developing our permanent Chicago resort and casino and (b) a development
agreement with GLP (the “GLP Development Agreement”) pursuant to which GLP has committed to advance up to $940
million (the “GLP Development Advances”) for the payment of hard costs used to construct our permanent Chicago resort and
casino in exchange for increasing the amount of rent that Bally’s Chicago OpCo pays to GLP under the Chicago MLA. The
Chicago MLA has a 15-year term and up to four renewal terms of five years each, if elected by Bally’s Chicago OpCo, and rent
payable under the Chicago MLA is (a) $20.0 million annually, subject to annual escalations set forth therein, plus (b) an annual
amount equal to 8.5% of the GLP Development Advances that GLP advances to Bally’s Chicago OpCo.
GLP has the right to terminate the Chicago MLA upon any event of default under the Chicago MLA. Such events of default
include, without limitation, a failure to pay amounts due after applicable notice and cure periods, certain bankruptcy or
insolvency events, a cross-default with the GLP Development Agreement and the failure to comply with a variety of covenants
after applicable notice and cure periods, including those related to the development of our permanent resort and casino, repair
and maintenance, alterations and insurance. In addition, from and after any refinancing, extension or majority amendment of
our Credit Agreement, the Chicago MLA will include a cross-default to (a) that certain Master Lease, dated June 3, 2021, as
subsequently amended, between GLP and Bally’s Management Group, LLC (“Bally’s Management”), an affiliate of the
Company, pursuant to which Bally’s Management leases the following properties from GLP: Bally’s Evansville, Bally’s Dover,
Bally’s Black Hawk North, Bally’s Black Hawk West, Bally’s Black Hawk East, Bally’s Quad Cities, Bally’s Tiverton and
Hard Rock Biloxi and (b) that certain Master Lease, dated December 16, 2024, as subsequently amended, between GLP and
Bally’s Management, pursuant to which Bally’s Management leases the following properties from GLP: Bally’s Kansas City,
Bally’s Shreveport, Bally’s Twin River, DraftKings at Casino Queen and The Queen Baton Rouge.
There are also certain restrictions on Bally’s Chicago OpCo’s ability to assign its interest in the Chicago MLA without having
to obtain GLP’s prior consent, including requirements for the transferee (or its parent company) to satisfy certain financial
metrics and have a certain level of experience in operating or managing casinos.
GLP’s obligation to make GLP Development Advances under the GLP Development Agreement is subject to certain
conditions, including that Bally’s Chicago OpCo shall have unrestricted access to funds in an amount sufficient at the time of
each GLP Development Advance to fund the construction of our permanent resort and casino. Bally’s Chicago OpCo is
obligated to construct our permanent resort and casino in compliance with terms and conditions set forth in the GLP
Development Agreement, which include the satisfaction of specified development and construction milestones.
31
The GLP Development Agreement contains customary representations and covenants by Bally’s Chicago OpCo and contains
funding conditions, including, without limitation, (a) GLP’s reasonable approval of plans and specifications, the project budget
(including amendments thereto and reallocations therein except those permitted under the GLP Development Agreement), the
project schedule, the underlying construction and architect contracts, and all change orders (subject to exceptions set forth in the
GLP Development Agreement), (b) GLP’s receipt of appropriate lien waivers, (c) budget balancing requirements, (d) retainage
requirements, and (e) other customary conditions, all as set forth in the GLP Development Agreement. From and after the first
GLP Development Advance, Bally’s Chicago OpCo is required to fund all hard costs of construction of the permanent resort
and casino utilizing solely GLP Development Advances until GLP has funded its entire commitment or construction has been
completed. The GLP Development Agreement also contains defaults and remedies, including, without limitation, a cross-
default with the Chicago MLA. Bally’s Chicago OpCo is not permitted to assign, finance, transfer, pledge or encumber its
interest in the GLP Development Agreement without GLP’s prior written consent, whether or not any such assignment,
financing, transfer, pledge or encumbrance is permitted with respect to the GLP Lease Agreement, other than to a permitted
leasehold mortgagee under the Chicago MLA.
Termination of any or all of the casino lease agreements (including as a result of a default under the GLP Development
Agreement) would result in us losing some or all of our rights with respect to the applicable properties, could result in a default
under the Host Community Agreement, and could have a material adverse effect on our business, financial position or results of
operations. In the event of a termination of any of the casino lease agreements (including as a result of a default under the GLP
Development Agreement), we may be required to transfer all personal property located at the applicable property to a
designated successor, and we may not be adequately compensated for that personal property. Moreover, since as a lessee we do
not completely control the land and improvements underlying our operations, the lessors could take certain actions to disrupt
our rights in the properties leased under the casino lease agreements, which are beyond our control. If the lessors chose to
disrupt our use either permanently or for a significant period of time, then the value of our assets could be impaired and our
business and operations could be adversely affected. There can also be no assurance that we will be able to comply with our
obligations under the casino lease agreements (including our obligations under the GLP Development Agreement) in the future.
In addition, if the lessors have financial, operational, regulatory or other challenges, there can be no assurance that the lessors
will be able to comply with their obligations under the casino lease agreements, including their obligations to provide us
financing for the construction of our permanent resort and casino in Chicago.
We rely on other third-party sports data providers for real-time and accurate data for sporting events, and if such third
parties do not perform adequately or terminate their relationships with us, our costs may increase and our business,
financial condition and results of operations could be adversely affected.
We rely on third-party sports data providers to obtain accurate information regarding schedules, results, performance and
outcomes of sporting events. We rely on this data to determine when and how sports bets are settled. We have experienced, and
may continue to experience, errors in this data feed which may result in us incorrectly settling bets. If we cannot adequately
resolve the issue with our users, our users may have a negative experience with our offerings, our brand or reputation may be
negatively affected and our users may be less inclined to continue or resume utilizing our products or recommend our offerings
to other potential users. As such, a failure or significant interruption in our service may harm our reputation, business and
operating results.
Furthermore, if any of our sports data partners terminates its relationship with us or refuses to renew its agreement with us on
commercially reasonable terms, we would need to find an alternate provider, and may not be able to secure similar terms or
replace such providers in an acceptable time frame. Any of these risks could increase our costs and adversely affect our
business, financial condition and results of operations. Further, any negative publicity related to any of our third-party partners,
including any publicity related to regulatory concerns, could adversely affect our reputation and brand, and could potentially
lead to increased regulatory or litigation exposure.
32
Negative perceptions and publicity surrounding the lottery industry could lead to increased regulation.
Our Bally’s Intralot business includes a global lottery management and services business. The popularity and acceptance of
lottery games is influenced by prevailing social attitudes toward the lottery, and changes in social attitudes toward the lottery
could result in reduced acceptance of lottery play as a leisure activity. Further, from time to time, the lottery industry is exposed
to negative publicity related to player behavior, play by minors, the presence of point-of-sale machines in too many locations,
risks related to iLottery accessibility, and alleged association with money laundering. Publicity regarding problem gambling and
other concerns with the lottery industry, even if not directly connected to the Company, could adversely impact its business,
results of operations, and financial condition. For example, if the perception develops that the lottery industry is failing to
address responsible lottery concerns adequately, the resulting political pressure may result in the industry becoming subject to
increased regulation and restrictions on operations. Such an increase in regulation could adversely impact our results of
operations, business, financial condition, or prospects.
Our management identified a material weakness in our internal control over financial reporting which could, if not
remediated, result in material misstatements in our consolidated financial statements.
Our management is responsible for establishing and maintaining adequate internal controls over our financial reporting, as such
term is defined in Rule 13a-15(f) under the Exchange Act. As disclosed in this report, we evaluated the effectiveness of our
internal control over financial reporting and identified a material weakness as of December 31, 2025 relating to the ineffective
operation of management review controls over accounting for income taxes and related disclosures.
A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be
prevented or detected on a timely basis. If not remediated, the material weakness identified above could result in material
misstatements in our consolidated financial statements.
We conduct our business in an industry that is subject to high taxes and may be subject to higher taxes in the future.
In gaming jurisdictions in which we conduct our business, with the exception of Rhode Island, state and local governments
raise considerable revenues from taxes based on casino revenues and operations. In Rhode Island, the state takes all of the
gaming win that comes into our Rhode Island operations and then pays us a percentage of the gaming win. We also pay
property taxes, occupancy taxes, sales and use taxes, payroll taxes, franchise taxes and income taxes. Our profitability will
depend on generating enough revenues to cover variable expenses, such as payroll and marketing, as well as largely fixed
expenses, such as property taxes and interest expense. From time to time, state and local governments have increased gaming
taxes and such increases could significantly impact the profitability of our gaming operations.
Our operations in other states are generally subject to significant revenue-based taxes and fees in addition to normal federal,
state and local income taxes, and such taxes and fees are subject to increase at any time. In addition, from time to time, federal,
state and local legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the
gaming industry. Further, worsening economic conditions could intensify the efforts of applicable state and local governments
to raise revenues through increases in gaming taxes and/or property taxes. It is not possible to determine with certainty the
likelihood of changes in tax laws in these jurisdictions or in the administration of such laws. Such changes, if adopted, could
adversely affect our business, financial condition and results of operations. The large number of state and local governments
with significant current or projected budget deficits makes it more likely that those governments that currently permit gaming
will seek to fund such deficits with new or increased gaming taxes and/or property taxes and worsening economic conditions
could intensify those efforts. Any material increase, or the adoption of additional taxes or fees, could adversely affect our future
financial results.
There can be no assurance that governments in jurisdictions in which we conduct our business, or the federal government, will
not enact legislation that increases gaming tax rates. General economic pressures have the potential to reduce revenues of state
governments from traditional tax sources, which may cause state legislatures or the federal government to be more inclined to
increase gaming tax rates. See “New legislation governing the online gaming industry may be introduced in the UK which
limits or restricts our operating model in that market.”
33
New and future changes to US and non-US tax laws could adversely affect our business.
The US Congress, the Organization for Economic Co-operation and Development (the “OECD”) and other government
agencies in jurisdictions where Bally’s and its affiliates do business have had an extended focus on issues related to the taxation
of multinational corporations. One example is in the area of “base erosion and profit shifting,” including the OECD’s “Pillar
Two” framework, which, among other changes, generally provide for an effective global minimum corporate tax rate of 15% on
profits generated by certain multinational companies. Although this initiative is subject to further developments in the countries
where Bally’s and its affiliates do business, it is already in force in various jurisdictions, including the UK and the EU. On
January 5, 2026, the OECD announced a “side-by-side” elective safe harbor that exempts U.S.-parented multinational entities
from certain provisions of Pillar Two for fiscal years beginning on or after January 1, 2026. We are continuing to evaluate the
Pillar Two framework and related legislation and the potential impact on our business. The adoption of the Pillar Two
framework by countries in which Bally’s and its affiliates do business could adversely affect Bally’s and its affiliates’ effective
tax rate and increase tax complexity and uncertainty. Furthermore, as a result of the Pillar Two framework or other tax
initiatives, the tax laws in the US, the UK and other countries in which Bally’s and its affiliates do business could change on a
prospective or retroactive basis, and any such changes could adversely affect Bally’s and its affiliates.
In addition, the US government may enact significant changes to the taxation of business entities including, among others,
changes to the rules regarding controlled foreign corporations, the elimination of certain tax exemptions and the imposition of
further minimum taxes or surtaxes on certain types of income. Although a range of US tax legislation has been proposed, the
likelihood of these changes being enacted or implemented is unclear. We are currently unable to predict whether such changes
will occur and, if so, the ultimate impact on our business.
See “New legislation governing the online gaming industry may be introduced in the UK which limits or restricts our
operating model in that market.”
If we fail to detect fraud, theft or cheating, including by our customers and employees, our reputation may suffer which
could harm our brand and reputation and negatively impact our business, financial condition and results of operations and
can subject us to investigations and litigation.
We have in the past incurred, and may in the future incur, losses from various types of financial fraud, including use of stolen or
fraudulent credit card data, claims of unauthorized payments by a user and attempted payments by users with insufficient funds.
Bad actors use increasingly sophisticated methods to engage in illegal activities involving personal information, such as
unauthorized use of another person’s identity, account information or payment information and unauthorized acquisition or use
of credit or debit card details, bank account information and mobile phone numbers and accounts. Under current credit card
practices, we may be liable for use of funds on our platform with fraudulent credit card data, even if the associated financial
institution approved the credit card transaction.
Acts of fraud may involve various tactics, including collusion. Successful exploitation of our systems could have negative
effects on our product offerings, services and user experience and could harm our reputation. Failure to discover such acts or
schemes in a timely manner could result in harm to our operations. In addition, negative publicity related to such schemes could
have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition and
results of operations. In the event of the occurrence of any such issues with our existing platform or product offerings,
substantial engineering and marketing resources and management attention, may be diverted from other projects to correct these
issues, which may delay other projects and the achievement of our strategic objectives.
In addition, any misappropriation of, or access to, users’ or other proprietary information or other breach of our information
security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure
to comply with privacy and information security laws, including for failure to protect personal information or for misusing
personal information, which could disrupt our operations, force us to modify our business practices, damage our reputation and
expose us to claims from our users, regulators, employees and other persons, any of which could have an adverse effect on our
business, financial condition and results of operations.
Despite measures we have taken to detect and reduce the occurrence of fraudulent or other malicious activity on our platform,
we cannot guarantee that any of our measures will be effective or will scale efficiently with our business. Our failure to
adequately detect or prevent fraudulent transactions could harm our reputation or brand, result in litigation or regulatory action
and lead to expenses that could adversely affect our business, financial condition and results of operations.
34
We are largely dependent on the skill and experience of management and key personnel.
We expect to experience strong competition in hiring and retaining qualified property and corporate management personnel,
including competition from Native American gaming facilities that are not subject to the same taxation regimes as we are and,
therefore, may be willing and able to pay higher rates of compensation. From time to time, a number of vacancies in key
corporate and property management positions can be expected. If we are unable to successfully recruit and retain qualified
management personnel at our facilities or at the corporate level, our results of operations could be adversely affected.
In addition, our officers, directors and key employees are required to file applications with the gaming authorities in each of the
jurisdictions in which we conduct our business and are required to be licensed or found suitable by these gaming authorities. If
the gaming authorities were to find an officer, director or key employee unsuitable for licensing or unsuitable to continue
having a relationship with us, we would have to sever all relationships with that person. Furthermore, the gaming authorities
may require us to terminate the employment of any person who refuses to file appropriate applications. Either result could
significantly impair our operations. The time and effort needed to successfully complete the application process could impact
our ability to attract, hire and retain top talent.
We are subject to risks associated with labor relations, labor costs and labor disruptions.
We are subject to the costs and risks generally associated with labor disputes and organizing activities related to unionized
labor. From time to time, our operations may be disrupted by strikes, public demonstrations or other coordinated actions and
publicity. We may incur increased legal costs and indirect labor costs as a result of contractual disputes, negotiations or other
labor-related disruptions.
A large number of our employees at our Casinos & Resorts properties within several US states are represented by a labor union
and are subject to collective bargaining agreements with us. As of December 31, 2025, we had 36 collective bargaining
agreements covering 3,679 employees. Our collective bargaining agreements generally have three-or-five-year terms. There can
be no assurance that we will be able to extend or enter into replacement agreements. If we are able to extend or enter into
replacement agreements, there can be no assurance as to whether the terms will be on comparable terms to the existing
agreements. We may also face organizing activities that could result in additional employees becoming unionized. Furthermore,
labor regulation and the negotiation of new or existing collective bargaining agreements could lead to higher wage and benefit
costs, changes in work rules that raise operating expenses and legal costs thereby affecting our profitability or interfering with
the ability of our management to focus on executing our business strategies, and could impose limitations on our ability to
reduce the size of our workforce during an economic downturn, which could put us at a competitive disadvantage.
Our obligation to fund multi-employer defined benefit pension plans to which we are a party may adversely affect us.
We must contribute to a number of multi-employer defined benefit pension plans under the terms of collective-bargaining
agreements that cover certain union-represented employees. The risks of participating in these multi-employer plans are
different from single-employer plans in the following aspects:
•assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other
participating employers;
•if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the
remaining participating employers; and
•if we choose to stop participating in some of our multi-employer plans, we may be required to pay those plans an
amount based on the underfunded status of the plan, referred to as a withdrawal liability.
In addition, the funding obligations for our pension plans will be impacted by the performance of the financial markets,
particularly the equity markets and interest rates. Funding obligations are determined by government regulations and are
measured each year based on the value of assets and liabilities on a specific date. If the financial markets do not provide the
long-term returns that are expected, we could be required to make larger contributions. The equity markets can be very volatile,
and, therefore, our estimate of future contribution requirements can change dramatically in relatively short periods of time.
Similarly, changes in interest rates and legislation enacted by governmental authorities can impact the timing and amounts of
contribution requirements. An adverse change in the funded status of the plans could significantly increase our required
contributions in the future and adversely impact our liquidity.
35
We may incur impairments to goodwill, indefinite-lived intangible assets or long-lived assets.
We monitor the recoverability of our long-lived assets, such as buildings, and evaluate their carrying value for impairment
whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. We
annually review goodwill to determine if impairment has occurred. Additionally, interim reviews are performed whenever
events or changes in circumstances indicate that impairment may have occurred. If the testing performed indicates that
impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value
and fair value of the long-lived assets or the carrying value and fair value of the reporting unit, in the period the determination is
made. The testing of long-lived assets and goodwill for impairment requires us to make estimates that are subject to significant
assumptions about our future revenue, profitability, cash flows, fair value of assets and liabilities, weighted average cost of
capital, as well as other assumptions. Changes in these estimates, or changes in actual performance compared with these
estimates, may affect the fair value of long-lived assets or reporting unit, which may result in an impairment charge.
We cannot accurately predict the amount or timing of any impairment of assets. Should the value of long-lived assets or
goodwill become impaired, our financial condition and results of operations may be adversely affected.
Our operations have historically been subject to seasonal variations and quarterly fluctuations in operating results, and we
can expect to experience such variations and fluctuations in the future.
Casino, hotel and racing operations in our markets are subject to seasonal variation. Seasonal weather conditions can frequently
adversely affect transportation routes to each of our properties and may cause snowfall, flooding and other effects that result in
the closure of our properties. In addition, our sports betting business may experience seasonality based on the relative
popularity of certain sports at different parts of the year. As a result, unfavorable seasonal conditions could have a material
adverse effect on our business, financial condition and results of operations.
Our business is particularly sensitive to energy prices and a rise in energy prices could harm our operating results.
We are a large consumer of electricity and other energy and, therefore, higher energy prices may have an adverse effect on our
results of operations. Accordingly, increases in energy costs may have a negative impact on our operating results. Additionally,
higher electricity and gasoline prices that affect our customers may result in reduced visitation to our properties and a reduction
in our revenues. We may be indirectly impacted by regulatory requirements aimed at reducing the impacts of climate change
directed at up-stream utility providers, as we could experience potentially higher utility, fuel and transportation costs.
Expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational
harm and other unforeseen adverse effects on our business.
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on
environmental, social and governance and sustainability considerations relating to businesses, including climate change and
greenhouse gas emissions, data privacy, artificial intelligence, human capital and diversity, equity and inclusion. We make
statements about goals and initiatives through information provided on our website, press statements and other
communications. Responding to these considerations and implementation of these goals and initiatives involves risks and
uncertainties and requires ongoing investments. The success of our goals and initiatives may be impacted by factors that are
outside our control. In addition, some stakeholders may disagree with our goals and initiatives and the focus and views of
stakeholders may change and evolve over time and vary depending on the jurisdictions in which we operate. Any failure, or
perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state
or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder
expectations and views could materially adversely affect our business, financial condition and results of operations.
36
Our insurance and self-insurance programs may not be adequate to cover future claims.
Although we maintain insurance that we believe is customary and appropriate for our business, we cannot assure that such
insurance programs will be available or adequate to cover all losses and damage to which our business or our assets might be
subjected. We use a combination of insurance and self-insurance to provide for potential liabilities, including employee
healthcare benefits, up to certain stop-loss amounts which limit our exposure above the amounts we have self-insured. We
estimate the liabilities and required reserves associated with the risks we retain. Any such estimates and actuarial projection of
losses is subject to a considerable degree of variability. If actual losses incurred are greater than those anticipated, our reserves
may be insufficient and additional costs could be recorded in our consolidated financial statements. If we suffer a substantial
loss that exceeds our self-insurance reserves, and any excess insurance coverage, the loss and attendant expenses could harm
our business, financial condition or results of operations. The lack of adequate insurance for certain types or levels of risk could
expose us to significant losses in the event that a catastrophe occurred for which we are uninsured or underinsured. Any losses
we incur that are not adequately covered by insurance may decrease our future operating income, require us to find
replacements or repairs for destroyed property and reduce the funds available for payments of our obligations. We renew our
insurance policies on an annual basis. The cost of coverage may become so high that we may need to further reduce our policy
limits, further increase our deductibles or agree to certain exclusions from our coverage.
We may be unable to protect our intellectual property rights.
We develop intellectual property to differentiate our retail casinos and interactive products from our competitors. Our brands
and technology constitute key business assets. In order to protect our brands, technology and other creative output, we rely on a
combination of trademarks, copyright, patents, trade secrets and contract law to establish and protect our proprietary rights. For
example, the Bally’s and Bally brand are protected by approximately 170 trademark registrations and applications in the U.S.
and foreign jurisdictions. While we take action to protect our intellectual property rights, there is always a risk that (i) our
proprietary rights become invalidated or unenforceable, (ii) we are unsuccessful in obtaining trademark or patent registrations
and (iii) we are unsuccessful in our enforcement efforts and, therefore, unable to prevent what we consider to be misuse of our
intellectual property assets. In addition, the laws of some foreign countries do not protect intellectual property rights to the same
extent as the laws of the United States. Finally, third parties may independently develop similar brands and technologies which
would negatively impact the value of our intellectual property.
Our results of operations and financial condition could be adversely affected by the occurrence of natural disasters, such as
hurricanes, or other catastrophic events, including war, terrorism and public health crises such as the COVID-19 pandemic.
In addition, results could be adversely impacted by other events beyond our control, including travel disruptions.
Natural disasters, such as major hurricanes, typhoons, tornados, floods, fires and earthquakes, could adversely affect our
business and operating results. Hurricanes are common in the areas in which our Mississippi and Louisiana properties are
located, and the severity of such natural disasters is unpredictable.
Catastrophic events, such as terrorist attacks and global and regional conflicts (e.g., the wars in Ukraine and Iran), have had a
negative effect on travel and leisure expenditures, including lodging, gaming (in some jurisdictions) and tourism. These events
can also lead to unstable market and economic conditions and have additional global consequences. We cannot accurately
predict the extent to which such events may affect us, directly or indirectly, in the future.
Public health crises may also significantly impact our business. For example, the global spread of the COVID-19 pandemic,
which began in early 2020, resulted in governments, public institutions and other organizations imposing or recommending, and
businesses and individuals implementing, restrictions on various activities or other actions to combat its spread, such as
restrictions and bans on travel or transportation, stay-at-home directives, requirements that individuals wear masks or other face
coverings, limitations on the size of gatherings, closures of work facilities, schools, public buildings and businesses,
cancellation of events, including sporting events, concerts, conferences and meetings and quarantines and lock-downs. The
pandemic and its consequences dramatically reduced travel and demand for hotel rooms and other casino resort amenities,
which had a negative impact on our results in 2020 and 2021. There are no assurances that future pandemics or other public
health crises will not cause similar disruptions that existed in 2020 and 2021.
In addition, other events beyond our control, such as travel disruptions impacting the ability of people to travel to our casino
properties, could impact our business. For example, the closure of Washington Bridge in Rhode Island has impacted foot traffic
at our Rhode Island properties, particularly Bally’s Twin River.
37
There can be no assurance that we will be able to obtain or choose to purchase any insurance coverage with respect to
occurrences of catastrophic events, such as those described above. If there is a prolonged disruption at our facilities due to
natural disasters, terrorist attacks, wars, public health crises or other catastrophic events, our results of operations and financial
condition would be adversely affected.
Cybersecurity and Technology Risks
We rely on information technology and other systems and platforms, and any failures, errors, defects or disruptions in our
systems or platforms could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability
to scale our technical infrastructure and adversely affect our operating results and growth prospects.
We engage a number of third parties to provide gaming operating systems for the facilities we own. As a result, we rely on such
third parties to provide uninterrupted services in order to run our business efficiently and effectively. In the event one of these
third parties experiences a disruption in its ability to provide such services (whether due to technological or financial difficulties
or power problems), this may result in a material disruption to the wagering activity at the casinos which we own and have a
material adverse effect on our business, operating results and financial condition.
If our user base and engagement continue to grow, and the amount and types of offerings continue to grow and evolve, we will
need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy
our users’ needs. Such infrastructure expansion may be complex, and unanticipated delays in completing these projects or
availability of components may lead to increased project costs, operational inefficiencies or interruptions in the delivery or
degradation of the quality of our offerings. In addition, there may be issues related to this infrastructure that are not identified
during the testing phases of design and implementation, which may only become evident after we have started to fully use the
underlying equipment or software, that could further degrade the user experience or increase our costs. As such, we could fail to
continue to effectively scale and grow our technical infrastructure to accommodate increased demands. In addition, our business
may be subject to interruptions, delays or failures resulting from adverse weather conditions, other natural disasters, power loss,
terrorism, cyber-attacks, public health emergencies (such as the coronavirus) or other catastrophic events. Any unscheduled
interruption in our technology services is likely to result in an immediate, and possibly substantial, loss of revenues due to a
shutdown of our gaming operations, cloud computing and lottery systems.
We believe that if our users have a negative experience with our offerings, or if our brand or reputation is negatively affected,
users may be less inclined to continue or resume utilizing our products or recommend our platform to other potential users. As
such, a failure or significant interruption in our service would harm our reputation, business and operating results.
We are reliant on the reliability and viability of internet infrastructure, which is out of our control, and the proper
functioning of our own network systems.
The growth of internet usage has caused interruptions and delays in processing and transmitting data over the internet.The growth of Internet usage has caused interruptions and delays in processing and transmitting data over the Internet. There
can be no assurance that internet infrastructure or our own network systems will continue to be able to support the demands
placed on them by the continued growth of the internet, the overall online gambling industry or that of our customers. The
internet’s viability could be affected by delays in the development or adoption of new standards and protocols to handle
increased levels of internet activity or by increased government regulation. The introduction of legislation or regulations
requiring internet service providers in any jurisdiction to block access to our websites and products may restrict the ability of
our customers to access products and services offered by us. Such restrictions, should they be imposed, could have a material
adverse effect on our business, financial condition and results of operations.
If critical issues concerning the commercial use of the internet are not favorably resolved (including security, reliability, cost,
ease of use, accessibility and quality of service), if the necessary infrastructure is not sufficient or if other technologies and
technological devices eclipse the internet as a viable channel, this may negatively affect internet usage, and our business,
financial condition and results of operations will be materially adversely affected. Additionally, the increasing presence of
viruses and cyber-attacks may affect the viability and infrastructure of the internet and/or the proper functioning of our network
systems and could materially adversely affect our business, financial condition and results of operations.
38
Our business may be harmed from cybersecurity incidents and we may be subject to legal claims if there is loss, disclosure or
misappropriation of or access to our customers’, business partners’ or our own information or other breaches of
information security.
We make extensive use of online services and centralized data processing, including through third-party service providers. We
have experienced certain cyber-attacks, attempts to breach our systems and other similar incidents. The secure maintenance and
transmission of customer information is a critical element of our operations. Our information technology and other systems, or
those of service providers and business partners, that maintain and transmit customer or employee information may be
compromised by a malicious third-party penetration of our network security, or that of a third-party service provider or business
partner or impacted by intentional or unintentional actions or inactions by our employees, or those of a third-party service
provider or business partner. As a result, our customers’ or employee’s information may be lost, disclosed, accessed, or taken
without our customers’ or employees’ consent.
In addition, third-party service providers and other business partners process and maintain proprietary business information and
data related to our employees, customers, suppliers and other business partners. Our information technology and other systems
that maintain and transmit this information, or those of service providers or business partners, may also be compromised by a
malicious third-party penetration of our network security or that of a third-party service provider or business partner, or
impacted by intentional or unintentional actions or inactions by our employees or those of a third-party service provider or
business partner. As a result, our business information or customer, supplier and other business partner data may be lost,
disclosed, accessed or taken without consent.
Any such loss, disclosure, or misappropriation of, or access to, customers’ or business partners’ information or other breach of
our information security can result in legal claims or legal proceedings, including regulatory investigations and actions, may
have a serious impact on our reputation and may adversely affect our business, operating results and financial condition.
Furthermore, the loss, disclosure or misappropriation of our business information may adversely affect our reputation, business,
operating results, and financial condition.
We may use AI in our business, and challenges with properly managing its use could result in reputational harm,
competitive harm and legal liability, and could have adverse effects on our business, operating results, and financial
condition.
We may incorporate AI solutions into our business, and we may leverage AI, including generative AI, into our business
operations. Our competitors or other third parties, like third-party distribution channels, may incorporate AI into their products
more quickly or more successfully than we do, which could impair our ability to compete effectively and could adversely affect
our business, operating results, and financial condition. In addition, there are significant risks in using AI, and there can be no
assurance that the use of AI will enhance our business or be beneficial to our business operations, including our efficiency or
our profitability.
Additionally, if our AI applications, or the AI applications of third parties, are based on data, algorithms or other inputs that are
flawed, or if our AI applications, or the AI applications of third parties, assist us in producing content, analyses or
recommendations that are, or are alleged to be, deficient, inaccurate or biased, our business, results of operations and financial
conditions may be adversely affected. The increased use of AI applications generally has resulted in, and may in the future
result in, cybersecurity incidents that implicate the personal data of end users of such applications. Any such cybersecurity
incidents related to our own use of AI applications may increase our cybersecurity risks, as well as the cybersecurity risks of
third parties, which could adversely affect our reputation and results of operations. AI also presents emerging ethical issues, and
if our use of AI becomes controversial, we may experience brand, reputational or competitive harm, or legal liability. The rapid
evolution of AI, including the potential regulation of AI by governmental or other regulatory agencies, will require significant
resources to develop, test and implement AI ethically and to minimize any unintended, harmful impacts.
39
Financing Risks
Our debt agreements and the Regulatory Agreement contain restrictive covenants that may limit our operating flexibility.
Our current debt agreements and the Regulatory Agreement include, and our future debt agreements and regulatory agreements
will likely include numerous financial and other covenants, imposing financial and operating restrictions on our business. Our
ability to comply with these provisions may be affected by general economic conditions, industry conditions and other events
beyond our control. There can be no assurance that we will be able to comply with these covenants. The failure to comply with
a financial covenant or other restriction contained in the agreements governing our indebtedness or in the Regulatory
Agreement may result in an event of default under such agreements or sanctions or fines under the Regulatory Agreement. An
event of default under our debt agreements could result in acceleration of some or all the applicable indebtedness as well as
other indebtedness of ours and the inability to borrow additional funds. We do not have, and cannot be certain we would be able
to obtain, sufficient funds to repay any such indebtedness if it is accelerated. Restrictions in our debt agreements or in the
Regulatory Agreement might affect our ability to operate our business, might limit our ability to take advantage of potential
business opportunities as they arise and might adversely affect the conduct of our current business, including by restricting our
ability to finance future operations and capital needs and limiting our ability to engage in other business activities.
Our existing and future indebtedness may limit our operating and financial flexibility.
As of December 31, 2025, we had approximately $4.94 billion of total indebtedness outstanding consisting of $1.47 billion
outstanding under our term loan facility (the “Term Loan”) pursuant to the terms of a credit agreement we entered into on
October 1, 2021 (the “Credit Agreement”) with Deutsche Bank AG New York Branch, as administrative agent and collateral
agent, and the lenders party thereto, and $1.5 billion in aggregate principal amount of outstanding 5.625% senior notes due
2029 and 5.875% senior notes due 2031. As of December 31, 2025, we had $588.1 million available under our revolving credit
facility (the “Revolving Credit Facility” or “Revolver” and, together with the Term Loan, the “Credit Facility”). On February
11, 2026, we issued $1.1 billion Term Loans and repaid the previously outstanding $1.47 billion Term Loan. This indebtedness
may have important negative consequences for us, including:
•limiting our ability to satisfy obligations;
•increasing vulnerability to general adverse economic and industry conditions;
•limiting flexibility in planning for, or reacting to, changes in our businesses and the markets in which we conduct
business;
•increasing vulnerability to, and limiting our ability to react to, changing market conditions, changes in industry and
economic downturns;
•limiting our ability to obtain additional financing to fund working capital requirements, capital expenditures, debt
service, general corporate or other obligations;
•subjecting us to a number of restrictive covenants that, among other things, limit our ability to pay dividends and
distributions, make acquisitions and dispositions, borrow additional funds and make capital expenditures and other
investments;
•limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant
portion of these funds to make principal and/or interest payments on outstanding debt;
•exposing us to interest rate risk due to the variable interest rate on borrowings under our Credit Facility;
•causing our failure to comply with the financial and restrictive covenants contained in our current or future
indebtedness, which could cause a default under that indebtedness (and other indebtedness of ours) and which, if not
cured or waived, could adversely affect us; and
•affecting our ability to renew gaming and other licenses necessary to conduct our business.
Though we have significant amounts of indebtedness outstanding, as of December 31, 2025, we have the ability to borrow the
remaining amount available under our Revolving Credit Facility and may issue or incur additional indebtedness to fund our
operations, including as necessary to execute on our growth strategy. Further, we may incur other liabilities that do not
constitute indebtedness under the Credit Facility. The risks that we face based on our outstanding indebtedness may intensify if
we incur additional indebtedness or financing obligations in the future.
40
Servicing our indebtedness and funding our other obligations requires a significant amount of cash, and our ability to
generate sufficient cash depends on many factors, some of which will be beyond our control.
Our ability to make payments on and refinance our indebtedness and to fund our operations and capital expenditures depends
upon our ability to generate cash flow and secure financing in the future. Our ability to generate future cash flow depends,
among other things, upon:
•general economic conditions;
•competition;
•legislative and regulatory factors affecting our operations and businesses; and
•our future operating performance.
Some of these factors will be beyond our control. There can be no assurance that our business will generate cash flow from
operations, or that future debt or equity financings will be available to us to enable us to pay our indebtedness or to fund other
needs. If our operating results and available cash are insufficient to meet our debt service obligations, we could face substantial
liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other
obligations. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them,
and these proceeds may not be adequate to meet any debt service obligations then due. The inability to generate cash flow could
result in us needing to refinance all or a portion of our indebtedness on or before maturity, including through the issuance of
additional debt or equity securities. If needed, there can be no assurance that we will be able to refinance any of our
indebtedness on favorable terms, or at all. Any inability to generate sufficient cash flow or refinance our indebtedness on
favorable terms could adversely affect our financial condition.
Our variable rate indebtedness exposes us to interest rate volatility, which could cause our debt service obligations to
increase significantly.
Borrowings under our Credit Facility are at variable rates of interest, such as the Secured Overnight Financing Rate (“SOFR”),
and expose us to interest rate volatility. If interest rates increase, our debt service obligations on certain of our variable rate
indebtedness will increase even though the amount borrowed remains the same.
A market downturn may negatively impact our access to financing.
A downturn in the financial markets or market volatility could negatively impact our ability to access capital and financing
(including financing necessary for acquisitions or to refinance our existing indebtedness) on acceptable terms and prices, that
we would otherwise need in connection with the operation of our business.
Risks Related to our Common Stock
The market price of our common stock could fluctuate significantly.
There have been and are periods of time when the US securities markets have experienced significant price fluctuations. These
price fluctuations may be day-to-day or they may last for extended periods of time. Significant price fluctuations in the
securities markets as a whole have caused, and may continue to cause, the market price of our common stock to be volatile and
subject to wide fluctuations. The trading volume of our common stock may fluctuate and cause significant price variations to
occur. Additional factors that could cause fluctuations in, or adversely affect, our stock price or trading volume include:
•general market and economic conditions, including market conditions in the gaming and hotel industries;
•actual or expected variations in quarterly operating results;
•differences between actual operating results and those expected by investors and analysts;
•sales of our common stock by current shareholders seeking liquidity in the public market;
•changes in recommendations by securities analysts;
•operations and stock performance of competitors;
•accounting charges, including charges relating to the impairment of goodwill;
•significant acquisitions or strategic alliances by us or by competitors;
•sales of our common stock by our directors and officers or significant investors; and
•recruitment or departure of key personnel.
There can be no assurance that the stock price of our common stock will not fluctuate or decline significantly in the future. In
addition, the stock market in general can experience considerable price and volume fluctuations that may be unrelated to our
performance.
41
Our largest shareholder owns a majority of our outstanding common stock, which could limit the ability of other
shareholders to influence corporate matters.
Standard General, our largest shareholder, beneficially owned 67.1% of our outstanding common stock as of February 28, 2026
and, therefore, is able to control the outcome of matters submitted to our stockholders for approval. Standard General’s
Managing Partner and Chief Investment Officer serves as the Executive Chairman of our Board. This concentrated control may
limit or preclude your ability to influence corporate matters.
We are a “controlled company” within the meaning of the corporate governance standards of NYSE. As a result, we qualify
for exemptions from certain corporate governance standards and our shareholders do not have the same protections
afforded to shareholders of companies that are subject to such requirements.
Standard General owns more than 50% of the total voting power of our outstanding common stock and we are a “controlled
company” under NYSE corporate governance standards. As a controlled company, we are not required by NYSE, for continued
listing of our common stock, to (i) have a majority of our board of directors consist of independent directors, (ii) maintain a
nominating and governance committee that is composed entirely of independent directors with a written charter addressing the
committee’s purpose and responsibilities or (iii) maintain a compensation committee that is composed entirely of independent
directors with a written charter addressing the committee’s purpose and responsibilities. For so long as we qualify as a
“controlled company,” we may rely on some or all of these exemptions from NYSE listing requirements, subject to the
provisions set forth in our Sixth Amended and Restated Certificate of Incorporation. In accordance with these exemptions, we
have elected not to comply with certain corporate governance requirements. Specifically, we no longer have a Nominating and
Governance Committee composed of entirely independent directors.
Accordingly, our shareholders do not have the same protections afforded to stockholders of companies that are subject to all of
the NYSE corporate governance requirements and the ability of our independent directors to influence our business policies and
affairs may be reduced. As a result, our status as a “controlled company” could make our common stock less attractive to some
investors or could otherwise harm our common stock price.
We are not paying dividends and any decision to do so in the future will be at the discretion of our Board.
The timing, declaration, amount, and payment of any future dividends will be at the discretion of our Board and will depend
upon, among other factors, our earnings, cash requirements, financial condition, requirements to comply with the covenants
under our debt agreements and the Regulatory Agreement, legal considerations and other factors that our Board deems relevant.
If we do not pay cash dividends on our common stock in the future, then the return on an investment in our common stock will
depend upon our future stock price and other forms of returning capital. There is no guarantee that our common stock will
maintain its value or appreciate in value.
We are a holding company and will depend on our subsidiaries for dividends, distributions and other payments.
We are structured as a holding company, a legal entity separate and distinct from our subsidiaries. Our only significant asset is
the capital stock or other equity interests of our operating subsidiaries. As a holding company, we will conduct all of our
business through our subsidiaries. Consequently, our principal source of cash flow will be dividends and distributions from our
subsidiaries. Our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization will be subject
to the prior claims of the subsidiary’s creditors.
42
ITEM 1B.UNRESOLVED STAFF COMMENTS
None.
ITEM 1C.ITEM 1B. CYBERSECURITY
Risk Management and Strategy
and have integrated these processes into our overall risk management systems and practices. We routinely assess material risks
from cybersecurity threats, including any potential unauthorized attack on, or use of, our information systems that may result in
adverse effects on the confidentiality, integrity, or availability of our information systems or any information stored therein.
Our security incident response framework classifies potential incidents by risk levels, and we prioritize our incident mitigation
and impact evaluation efforts based on those risk classifications or security incident categories, while focusing on maintaining
the resiliency of our systems. The risk assessments support the identification of reasonably foreseeable internal and external
risks, the likelihood of occurrence and any potential damage that could result from such risks, and the sufficiency of existing
Following these risk assessments, we design, implement, and maintain reasonable safeguards to minimize the identified risks;
reasonably address any identified gaps in existing safeguards; update existing safeguards as necessary; and monitor the
effectiveness of our controls. Some of the other steps we have taken to detect, identify, assess, classify, and attempt to mitigate
cybersecurity risks include:
•Adopting and periodically reviewing and updating information security and privacy policies;
•Conducting targeted audits and penetration tests throughout the year, using both internal and external resources;
•Complying with the Payment Card Industry Data Security Standard (PCI-DSS);
•Implementing an Information Security Management System (ISMS) that is designed to generally align with the
requirements of the ISO 27001 standard;
•Implementing a Privacy Information Management System (PIMS) that is designed to align with the requirements of
the ISO 27701 standard;
•Engaging an experienced third party to independently evaluate our information security systems on a regular basis;
•Adopting a vendor risk management program, which includes receiving the results of cybersecurity evaluations
conducted on certain vendors engaged in high-risk data processing;
•Providing security and data protection training and awareness to our employees, contractors and key partners with
access to sensitive information and systems; and
•Maintaining cyber liability insurance.
Although certain of our systems are designed to align with requirements of ISO 27701, this does not mean that we will meet
any particular technical standards, specifications, or requirements, but rather we use ISO 27701 and other cybersecurity
standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
please refer to Item 1A “Risk Factors -Cybersecurity, Data Privacy and Technology Risks.
Governance
Directors periodically receives reports from our committees, cybersecurity management, external professional advisors, and
other relevant Company personnel regarding various types of risks faced by the Company and the Company’s risk mitigation
efforts related thereto, including cybersecurity risks and related mitigation efforts.
The Board also receives presentations from management regarding trends in cybersecurity risks and risk mitigation initiatives
and plans, including briefings on recent breaches at other companies and key takeaways and lessons learned that are applicable
to our business. The Board will also periodically review key cybersecurity and data privacy related benchmarks for the
Company.
43
Management’s Responsibilities
procedures that address when and how to engage with Company management, our Board of Directors, other stakeholders, and
law enforcement when responding to such issues.
years’ experience overseeing and managing information technology teams and complex IT systems, and our Vice President of
Cybersecurity has over 15 years’ experience developing and managing cybersecurity functions and strategies. Our Vice
President of Global Data Privacy is a recognized leader in the industry with over 7 years’ experience in managing global data
provide oversight with respect to our cybersecurity risk detection, identification, assessment, classification, and mitigation
efforts.
leadership that convene on a regular basis to receive updates from our committees, cybersecurity management, external
professional advisors, and other relevant Company personnel about the Cybersecurity and Privacy programs we have in place;
discuss and assess material risks and planned risk mitigation, incidents and planned remediation efforts, trends observed,
consider cybersecurity-related proposals, and review and adopt changes in cybersecurity policies.
44
Recently Filed
Click on a ticker to see risk factors
| Ticker * | File Date |
|---|---|
| AMBA | an hour ago |
| PRXK | an hour ago |
| TCRG | 2 hours ago |
| RMBI | 2 hours ago |
| MOJO | 3 hours ago |
| COCH | 5 hours ago |
| MAIA | 6 hours ago |
| BALY | 6 hours ago |
| TBPH | 6 hours ago |
| AGIG | 6 hours ago |
| NBRG | 7 hours ago |
| SBDS | 7 hours ago |
| XLO | 7 hours ago |
| CABA | 7 hours ago |
| ABUS | 7 hours ago |
| PYXS | 8 hours ago |
| AVTX | 8 hours ago |
| IDR | 8 hours ago |
| CLB | 2 days, 17 hours ago |
| ATER | 2 days, 17 hours ago |
| CGCT | 2 days, 18 hours ago |
| FINW | 2 days, 19 hours ago |
| SUNE | 2 days, 21 hours ago |
| AHT | 2 days, 21 hours ago |
| WGRX | 2 days, 21 hours ago |
| EGHA | 2 days, 21 hours ago |
| AIIA | 2 days, 21 hours ago |
| VNME | 2 days, 22 hours ago |
| SINT | 2 days, 22 hours ago |
| NMP | 2 days, 22 hours ago |
| ASTI | 2 days, 22 hours ago |
| CELZ | 2 days, 22 hours ago |
| USGO | 2 days, 22 hours ago |
| FIEE | 2 days, 22 hours ago |
| DNMX | 2 days, 22 hours ago |
| SPFX | 2 days, 22 hours ago |
| STRR | 2 days, 22 hours ago |
| LWLG | 2 days, 22 hours ago |
| UONE | 2 days, 22 hours ago |
| GRWG | 2 days, 22 hours ago |
| AFBI | 2 days, 22 hours ago |
| SWKH | 2 days, 22 hours ago |
| AACI | 2 days, 22 hours ago |
| PALI | 2 days, 22 hours ago |
| CBNA | 2 days, 22 hours ago |
| TWAV | 2 days, 22 hours ago |
| BLRK | 2 days, 23 hours ago |
| JACS | 2 days, 23 hours ago |
| SNOW | 2 days, 23 hours ago |
| MLAA | 2 days, 23 hours ago |
