Amid a tumultuous third quarter, amongst which the stock plummeted by a harrowing 14.80%, Bally’s Corporation confirmed an impending personnel decrease by 300. Alongside this, executive board members devised potential plans for selling their lease on the Tropicana Las Vegas Casino Hotel, under optimal financial conditions.
The announcement of the impending job losses trails the corporation’s earlier communication in January. Bally’s original intent was to strategically downsize staff numbers in their interactive unit by up to 15%, done in a bid to slash costs. This strategy, combined with a significant shortfall in predicted earnings, presumably had a hand in Wednesday’s stock sell-off. In the recent third quarter, Bally’s reported a loss of $1.15 per share and a revenue accumulation of $632.5 million, in lieu of an expected 15-cent loss on anticipated sales of $634.54 million.
Additional factors contributing to this plunge in share prices involved revised 2023 EBITDAR and revenue guidance. The freshly tailored revenue guidance now predicts that the remainder of the year will yield $2.4 billion to $2.5 billion. Meanwhile, adjusted EBITDAR predictions now rest at $640 million to $655 million. The company’s rationale behind the dialed-back forecast relied heavily on delays encountered in the launch of its interim Chicago casino, amongst other unforeseen circumstances.
Bally’s only property in the heart of Las Vegas, the Tropicana Casino, currently occupies a precarious position as the operator, real estate proprietor Gaming and Leisure Properties, anxiously anticipate the outcome of an upcoming Major League Baseball owners’ meet. Expected to unfold later this month, there are high hopes for securing the prospective relocation of the Oakland Athletics to Las Vegas, a move that includes plans for a new stadium establishment on the Tropicana plot.
Amid an analysis conference call, Bally’s executives identified this uncertainty concerning the Tropicana’s indeterminate future as a contributing factor to its diminished performance in the third quarter. Bally’s CFO, Marcus Glover, asserted that the current value of Tropicana is prodigious, with the company willing to let go of its lease at an attractive price. Adding to this, CEO Robeson Reeves and Chairman Soo Kim emphasized the asset’s increased value, with Reeves opining that despite short-term drawbacks, the asset remains a significant investment.
Retrenchment in investment at Tropicana wasn’t the only stumbling block in Bally’s third-quarter journey. Additional setbacks included regulatory pitfalls that further delayed the unveiling of the makeshift Chicago casino and lowered performance at venues in both Atlantic City, NJ Boardwalk, and Evansville, Ind. While the Atlantic City issues went unexplained, executives pointed out that the regional casino in Evansville was hamstrung by the advent of more historical horse racing machines in neighboring Kentucky.
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