Bally\'s Corp (BALY)BALY

Bally's Corp: A Comprehensive Overview

Company Profile

History and Background:

Bally's Corporation (NYSE: BALY), previously known as Twin River Worldwide Holdings, Inc., is a Rhode Island-based corporation actively involved in the land-based casino, online sports betting, and daily fantasy sports industries. Founded in 2020, the company has quickly grown through acquisitions of renowned brands like Bally's Casinos & Resorts and Gamesys Group, establishing itself as a prominent player in the competitive gambling market.

Core Business Areas:

Bally's Corp operates across three distinct segments:

• Land-Based Casinos: This segment comprises 14 casinos located in 10 states across the US, offering traditional casino games, slots, and dining options.
• Interactive: This segment represents the company's online gambling ventures, including sports betting, iGaming, and daily fantasy sports, accessible through platforms like Betfred and Monkey Knife Fight.
• Free-to-Play: This segment focuses on mobile games and free-to-play offerings, primarily serving as a customer acquisition tool for the company's real-money gambling platforms.

Leadership and Structure:

Bally's Corp is led by CEO Lee Fenton, who brings extensive experience in the gaming industry to the company. The leadership team also includes seasoned executives like George Papanier (President and COO) and Adi Dhandhania (Chief Financial Officer). The company employs a decentralized structure with experienced regional presidents overseeing operations in various geographic areas.

Top Products and Market Share

Top Products and Offerings:

Bally's Corp's top products include:

• Land-Based Casinos: Bally's Atlantic City, Bally's Las Vegas, Tropicana Las Vegas, and various regional casinos offering traditional casino games, slots, and entertainment options.
• Interactive: Betfred Sportsbook, Monkey Knife Fight daily fantasy sports platform, and various online casino brands offering sports betting, casino games, and daily fantasy sports.
• Free-to-Play: Mobile games and free-to-play offerings available on various platforms.

Market Share:

Bally's Corp holds a relatively small market share in the overall gambling industry. However, the company has a strong presence in the land-based casino market in the US, particularly in Rhode Island, and is rapidly expanding its online gambling footprint through acquisitions and partnerships.

Competitor Comparison:

Bally's Corp faces competition from established players like Caesars Entertainment (CZR), Wynn Resorts (WYNN), DraftKings (DKNG), and FanDuel (Flutter Entertainment). While Bally's Corp trails these competitors in terms of market share, it differentiates itself by focusing on regional markets and leveraging its established brand recognition.

Total Addressable Market:

The global gambling market is estimated to be worth over $565 billion in 2023 and is projected to grow at a CAGR of 11.6% to reach $948 billion by 2028. The US gambling market alone is valued at over $100 billion, with online gambling representing a rapidly growing segment.

Financial Performance

Recent Financial Statements:

Bally's Corp reported revenue of $577.8 million in the second quarter of 2023, with a net loss of $77.8 million. The company's gross profit margin stood at 55.6%, while its operating margin was -17.8%. EPS for the quarter was -$0.46.

Year-over-Year Performance:

Bally's Corp's revenue has grown significantly year-over-year, reflecting the company's expansion efforts. However, the company continues to incur losses as it invests in growth initiatives.

Cash Flow and Balance Sheet Health:

Bally's Corp has a negative free cash flow, which is primarily due to its ongoing investments in acquisitions and product development. The company's balance sheet shows significant debt levels, reflecting its recent acquisitions.

Dividends and Shareholder Returns

Dividend History:

Bally's Corp does not currently pay dividends.

Shareholder Returns:

Bally's Corp's stock has been volatile in recent years, reflecting the company's growth-oriented strategy and the overall market conditions.

Growth Trajectory

Historical Growth:

Bally's Corp has experienced significant revenue growth over the past few years, primarily driven by acquisitions. The company's online gambling segment is expected to be a key growth driver in the future.

Future Growth Projections:

Analysts project Bally's Corp's revenue to grow at a CAGR of over 20% in the next few years. The company's expansion into new markets and its focus on online gambling are expected to fuel this growth.

Recent Growth Initiatives:

Bally's Corp is actively pursuing growth initiatives, including:

• Expanding its online gambling footprint through acquisitions and partnerships.
• Launching new land-based casinos in attractive markets.
• Developing innovative new products and services.

Market Dynamics

Industry Trends:

The gambling industry is undergoing significant changes, driven by the increasing legalization of online gambling in the US and the growing popularity of mobile gaming.

Bally's Corp's Positioning:

Bally's Corp is well-positioned to benefit from these trends, with its strong land-based casino operations and its rapidly expanding online gambling business. The company's focus on regional markets and its established brand recognition should help it compete effectively in this evolving landscape.

Competitors

Key Competitors:

• Caesars Entertainment (CZR)
• Wynn Resorts (WYNN)
• DraftKings (DKNG)
• FanDuel (Flutter Entertainment)
• Penn National Gaming (PENN)

Market Share Comparison:

Bally's Corp has a relatively small market share compared to its larger competitors. However, the company is growing rapidly and is expected to gain market share in the coming years.

Competitive Advantages and Disadvantages:

Advantages:

• Strong brand recognition and established land-based casino operations.
• Rapidly expanding online gambling business.
• Focus on regional markets with less competition.

Disadvantages:

• Relatively small market share compared to larger competitors.
• High debt levels from recent acquisitions.
• Operating in a highly competitive and regulated industry.

Potential Challenges and Opportunities

Challenges:

• Intense competition from established players.
• Regulatory hurdles in the online gambling industry.
• Managing high debt levels.

Opportunities:

• Continued growth of the online gambling market.
• Expansion into new markets.
• Development of innovative new products and services.

AI-Based Fundamental Rating

Rating: 7/10

Justification:

Bally's Corp has a strong brand, a rapidly growing online gambling business, and a focus on less competitive regional markets. However, the company is in a highly competitive industry, has high debt levels, and is operating in a highly regulated environment.

Sources and Disclaimers

• Sources: Bally's Corp financial statements, SEC filings, company website, industry reports, news articles.
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Investing in Bally's Corp stock involves significant risks and uncertainties.