Bally’s issues going concern warning amid mounting liquidity crisis
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Casino and resort operator Bally’s issued a warning that it may struggle to keep up with its debt burden over the next year, and there is “substantial doubt” about its ability to remain a going concern.
The company made the disclosure in its second quarter earnings report filed with the Securities and Exchange Commission (SEC).
In the filing, Bally’s said the company is “pursuing a number of financing alternatives to enhance its liquidity, including asset monetization, an equity sale, and debt financings.”
“While the company is actively engaged in discussions on several financing alternatives, the conditions and events raise substantial doubt about the company’s ability to continue as a going concern,” Bally’s said in the filing.
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Bally’s warned in the filing there is substantial doubt about its ability to continue as a going concern. (John J. Kim/Chicago Tribune/Tribune News Service via Getty Images)
The company said it executed a term sheet in July for a loan that would fund the continued development of the Bally’s Bronx project and other corporate purposes, though the term sheet is non-binding, and the two sides are working toward a binding agreement.
“These plans have not been finalized, are subject to market conditions and the actions of third parties, are not within the company’s control and there can be no assurance that the plans will be successfully implemented,” Bally’s explained, adding that those plans don’t alleviate substantial doubt about its ability to remain a going concern.
Companies are required to include a going concern warning in its financial filings when auditors see that the company faces the risk of failing or being forced into bankruptcy within the next year.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BALY | BALLYS CORP | 8.84 | -0.07 | -0.79% |
Bally’s filing noted several factors that may influence its outlook and performance, including unexpected costs from its construction projects, risks from rapid growth, the impact of digitization of gaming on casino operators and the company’s expansion into digital gaming, as well as regulatory compliance costs and other matters.
As of the end of June, Bally’s owned and operated 20 casinos globally, including some in the United Kingdom and in 11 U.S. states, as well as a golf course in New York and horse racetracks in Colorado and Wyoming.
It also operates the Bally Bet Sportsbook & Casino, an iCasino and sportsbook licensed in 14 North American jurisdictions, and it holds a majority interest in Bally’s Intralot.
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