Experts from Citizens Cast Doubt on Bally’s Position and Ongoing Projects

Bally’s recently filed a 10-Q with the Securities and Exchange Commission (SEC), but Citizens analysts Jordan Bender and Isabelle Slavin have argued that the operator’s current pipeline of projects is ambitious. Citizen Analysts Warn About Bally’s Somewhat Precarious Position According to the analysts, the situation does not appear dire, and they noted that the company has reiterated its efforts to secure outside funding for New York. However, they said they do not believe Bally’s can complete all of its projects at its current leverage levels without either selling assets or bringing in a development partner. Bally’s share price has declined 34% over the past month. This happened soon after the company’s Q2 results, initially plunging before staging a modest recovery, only to fall a further 9% today. Bally’s Intralot reported adjusted EBITDA of $98.74 million in Q2, down from almost $117 million in Q1. The operator attributed the decline largely to higher taxes in the UK. However, the separately filed 10-Q appears to have dealt the biggest blow to investor confidence, raising concerns about the company’s ability to fund and complete its ambitious project pipeline. What Could Bally’s Do to Offset Investor Doubts? Of course, a big company like Bally’s has many assets on which it could fall back, if needed, including a foothold in Las Vegas, as Bally’s has rights to develop the site of the former Tropicana Las Vegas. However, that project has been going slowly and has even caused delays in plans for a new baseball stadium. There may also be a clue in Bally’s own recent communications suggesting that Citizens’ predicted outcome could be the more likely scenario. Earlier company updates explicitly referred to plans for a casino at the site. More recent communications, however, have instead described the proposed development in terms of “non-gaming amenities.” Alternatively, securing renewed financing for the New York project could provide investors with the reassurance needed to ease concerns over Bally’s ability to continue as a going concern, as some experts have said that the project could become its saving grace. Barry Jonas, managing director at Truist, offered a similar assessment in a separate report. He also noted that while the inclusion of “going concern” language remains “not a good look and is rarely seen across our coverage.” He reiterated Truist’s “hold” rating, while Citizens maintained its “market perform” rating, effectively advising investors to stay the course. Neither analytics company, however, has issued a sell recommendation, citing the potential for significant volatility in the stock in either direction.