BALY 10-K & 10-Q changes, risk factors and insider trading

•Our business is particularly sensitive to reductions in discretionary consumer spending.

•Our largest shareholder owns a meaningful percentagemajority of our outstanding common stock, which could limit the ability of other shareholders to influence corporate matters.

Our business is particularly sensitive to periodic reductions in discretionary consumer spending.

Our business is particularly sensitive to periodic reductions from time to time 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, F2P,free-to-play games, sports betting, iCasino and online bingo. A period of sustained inflation, particularly in the USUS, 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.

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.

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.

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.

We are subject to numerous 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.

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.

Any such change to the minimum wage could have a material adverse effect on our business, financial condition and results of 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.

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 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.

We handle significant amounts of cash in our operations and are subject to various reporting and AML laws and regulations. Recently, US governmental authorities and the British gambling regulator, the Great Britain Gambling Commission (the “GBGC”), have evidenced an increased focus on compliance with AML laws and regulations in the gaming industry. Any violation of AML laws or regulations 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.

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 t newfurther financial risk checks on our highest value customers,customers based on non-public information, some may be unwilling to provide the additional information and/or documentation required by us in the UK 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.

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.

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. 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 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.

We derive meaningful 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.jurisdictions” as it is not possible to obtain a license. Certain of our products are made available to players in unregulated jurisdictions, on either a B2B or B2C basis.jurisdictions. The relevant transactions in such unregulated jurisdictions and the associated player relationships that underpin them are generally regulated in either Malta or Gibraltar which useby “point of supply” gambling regimes. We andhold our commercial partners holda point-of-supply licenseslicense in MaltaGibraltar and Gibraltar. Therefore, suchtherefore, transactions are in fact heavily regulated but are not themselves regulated in the jurisdiction within which the player is ultimately located.

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 derive meaningful revenues from players located in jurisdictions in which a license from that jurisdiction is not available.

A 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.

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 the GDPR is ofparticularly particular relevancerelevant to our customer data, marketing activitiesactivities, information security systems, and information technology security systems andassociated 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 the 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 UK and the EU to update the legislative rules applicable to digital and online data processing and to align e-privacy laws to the 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 the 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 jointly 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 the 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 the GDPR is and will continue to evolve over time. In addition, as a result of Brexit, the application of the 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 may adversely affect our business by constraining our data processing activities or by 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 the 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 ascustomer claimsclaims. byclass customersactions 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.

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.

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.

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.

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.

TheseTogether, we believe these steps continue to position usthe asCompany afor prominent,sustainable full-service,long-term verticallygrowth integratedacross iGamingour company, with physical casinosland-based and onlineinteractive gaming solutionsplatforms, united under a single, leading brand.

Consolidated Adjusted EBITDAR is used outside of our financial statements solely as a valuation metric. Consolidated Adjusted EBITDAR is defined as consolidated Adjusted EBITDA plus rent expense associated with triple net operating leases. Consolidated Adjusted EBITDAR is an additional metric used by analysts in valuing gaming companies subject to triple net leases since it eliminates the effects of variability in leasing methods and capital structures. This metric is included as supplemental disclosure because (i) we believe Consolidated Adjusted EBITDAR is used by gaming operator analysts and investors to determine the equity value of gaming operators and (ii) financial analysts refer to Consolidated Adjusted EBITDAR when valuing our business. We believe Consolidated Adjusted EBITDAR is useful for equity valuation purposes because (i) its calculation isolates the effects of financing real estate, and (ii) using a multiple of Consolidated Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize estimated liabilities arising from operating leases related to real estate.

The Company has three reportable segments: Casinos & Resorts, International Interactive and North America Interactive. Refer to “Our Operating Structure” in Part I, Item 1 “Business” of this Annual Report on Form 10-K and Note 23 “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. The following table sets forth certain financial information associated with results of operations for the years ended December 31, 2024, 2023 and 2022.operations. Non-gaming revenue includes hotel, food and beverage, technology services, licensing and retail, entertainment and other revenue. Non-gaming expenses include hotel, food and beverage, technology services, licensing and retail, entertainment and other expenses.

Our total revenue for the years ended December 31, 2024 and 2023 consisted of the following (in thousands):

In 2024,the Successor period from February 8, 2025 to December 31, 2025, we recorded total impairment charges of $248.9$181.6 million which included $125.9 million, $71.6$109.1 million and $12.8$72.5 million impairment charges in the InternationalBally's InteractiveIntralot B2B segment related to its intangible assets, goodwillassets and certaingoodwill, otherrespectively, long-liveddue assets,to respectively.declining Inprojected addition,cash weflows alsowithin recordedits $38.6licensing million of impairment charges on gaming licenses in connection with our Casinos & Resorts reporting segment.business.

Other (incomeexpense) expenseincome

ProvisionThe Company recorded a provision for income taxes forof $47.6 million, $0.7 million, and $15.3 million during the period from February 8, 2025 to December 31, 2025 (Successor), period from January 1, 2025 to February 7, 2025 (Predecessor), and the year ended December 31, 2024 was(Predecessor), $15.3 million, compared to $1.8 million in 2023.respectively. The effective tax rate for the year ended December 31, 2024 was (2.87.70)% compared to%, (0.91.32)%%, inand 2023.(2.76)%, respectively, for these same periods. The 2024 year to date effective tax raterates during the successor periods in the 2025 calendar year differed from the US federal statutory rate of 21%, creating a provision for income tax on the Company’s Loss before income taxes, largely due to an increase in the valuation allowance and the negative rate differential driven by the increased impairment charges within our foreign entities.

The following table presents segment Adjusted EBITDAR, which is our reportable segment GAAP measure and our primary measure for profit or loss for our reportable segments, and reconciles Adjusted EBITDAR on a consolidated basis to net income (loss). The Other category is included in the following tables in order to reconcile the segment information to the Company’s consolidated financial statements.loss.

(1) Consists of the operating lease components contained within our triple net leases with GLPI for the real estate assets used in the operations of certain Casinos & Resorts properties, and the triple net lease associated with the real estate and land underlying the operations of the Bally’s Lake Tahoe facility.

(2) Non-operating expense, net includes: (i) change in value of performance warrants, (ii) gainloss on extinguishment of debt, (iii) non-operating items of equity method investments including our share of net income or loss on an investment and depreciationfair expensevalue relatedoption to our Rhode Island joint venture,assets, and (iv) other (income) expense, net.

There have been no material changes to ourOur risk factors contained in Part I. Item IA. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025.2025 have undergone no material changes, except for the addition described below.

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the securitiesPrivate laws.Securities Litigation Reform Act of 1995. Forward-looking statements are statements as to matters that are not historical facts, and include statements about our plans, objectives, expectations and intentions.

Forward-looking statements are not guarantees and are subject to risks and uncertainties. Forward-looking statements are based on our current expectations and assumptions. Although we believe that our expectations and assumptions are reasonable at this time, they should not be regarded as representations that our expectations will be achieved. Actual results may vary materially. Forward-looking statements speak only as of the timedate ofthey thisare reportmade and we do not undertake to update or revise them as more information becomes available, except as required by law.

•unexpected costs and other events impacting our planned construction projects, including a permanent casino resort in Chicago, Illinois (“Bally’s Chicago”) and a full-scale casino and resort in The Bronx, New York (“Bally’s New York”);

As of MarchJune 31,30, 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 horse racetracks in Colorado and Wyoming. We also own Bally Bet Sportsbook & Casino, a premier sports betting and iCasino platform licensed in 1416 jurisdictions in North America, and a majority equity interest in Bally’s Intralot S.A. (“Bally’s 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 Bally’s New York, a full-scale casino and resort in The Bronx, New York (“Bally’s New York”),York, and are developing Bally’s Chicago, an integrated destination resort in Chicago, Illinois.

Casinos & Resorts - includes 19 land-based casino properties, two horse racetracks and one golf course in the US:US. For further information on the Casinos & Resorts properties, refer to Note 1 “General Information” to our condensed consolidated financial statements presented in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Bally’s Intralot B2B - includes Intralot’sthe global lottery operations of Bally’s Intralot and the Company’s licensing business.

Bally’s Intralot B2C - includes the Company’s interactive European gaming operations, Bally’s Intralot’s B2C lottery operations, as well as one casino property, Bally’s Newcastle, in the UK.

The key performance indicator used in managing our business is consolidated Adjusted EBITDA and segment Adjusted EBITDAR which are non-GAAP measures.EBITDAR. Adjusted EBITDA is defined as earnings, or loss, for the Company, or where noted its reporting segments, before, in each case, interest expense, net of interest income, provision (benefit) for income taxes, depreciation and amortization, non-operating (income) expense, acquisition and other transaction related costs, share-based compensation and certain other gains or losses as well as, when presented for our reporting segments, an adjustment related to the allocation of corporate cost among segments. Segment Adjusted EBITDAR is Adjusted EBITDA (as defined above) for the Company’s reportable segments, plus rent expense associated with triple net operating leases for the real estate assets used in the operations of the Bally’s casinos.

Consolidated Adjusted EBITDA and segment Adjusted EBITDAR should not be construed as alternatives to net income, the most directly comparable GAAP measure, as indicators of our performance. In addition, consolidated Adjusted EBITDA and segment Adjusted EBITDAR as used by us may not be defined in the same manner as other companies in our industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies. Consolidated Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income, because it excludes the rent expense associated with our triple net operating leases for real estate assets used in the operations of our casino properties.

FirstSecond Quarter 2026 Results

During the first quarter of 2025, the Company moved a component of the North America Interactive operating segment into a separate operating segment, which is reported in the Corporate & Other category. In the fourth quarter of 2025, the Company further updated its operating and reportable segments in connection with the Company’s acquisition of Intralot Transaction.pursuant to the transaction agreement, dated as of July 18, 2025 (the “Intralot Transaction”). These changes were made to better align with the Company’s strategic growth initiatives and how its chief operating decision maker evaluates performance and allocates resources. Prior period reportable segment results and related disclosures have been conformed to reflect the Company’s current reportable segments.

Total revenue for the Successor three months ended MarchJune 31,30, 2026 increased 28%,20% from $589.2$657.5 million for the Successor three months ended June 30, 2025. Total revenue for the Successor six months ended June 30, 2026 increased 24% compared to the Predecessor period from January 1, 2025 to February 7, 2025 and successorSuccessor period from February 8, 2025 to MarchJune 31,30, 2025. Increases in total revenue from the Predecessor period from January 1, 2025 to February 7, 2025 and Successor period from February 8, 2025 to MarchJune 31,30, 2025 arewere primarily driven by the revenue additions from Queen,the beginning on February 8, 2025, and theBally’s Intralot entities, beginning October 8, 2025, contributing $68.5$92.8 million and $95.2$188.1 million, respectively,million to the Successor three and six months ended MarchJune 31,30, 2026, respectively. Additionally, the Company experienced incremental increased revenue from Queen, as well as increased gaming revenue in our European markets within our Bally’s Intralot B2C reportable segment during the Successor six months ended June 30, 2026.

DuringIn 2026, the Company’s gaming and non-gaming expenses, amounting to $400.4 million and $756.9 million for the Successor three and six months ended MarchJune 31,30, 2026, gaming and non-gaming expensesrespectively, grew proportionally relative to total revenue. The expenses for the Successor three months ended June 30, 2025 amounted to $290.0 million. The expenses for the Predecessor period from January 1, 2025 to February 7, 2025 and Successor period from February 8, 2025 to MarchJune 31,30, 2025 amounted to $267.2$557.2 million. This growth in expenses compared to the prior year is primarily due to the changes in revenue year over year.

General and administrative expense for the Successor three months ended MarchJune 31,30, 2026 increased 12% compared to $298.2 million in the Successor three months ended June 30, 2025. General and administrative expense for the Successor six months ended June 30, 2026 compared to the Predecessor period from January 1, 2025 to February 7, 2025 and Successor period from February 8, 2025 to MarchJune 31,30, 2025, increased 15% or $41.3 million,13% from $274.8$573.0 million. These increases were mainly attributable to additional costs for the Queen properties andBally’s Intralot entities of $26.6$52.0 million and $34.3 million, respectively, offset by a $25.0$86.4 million decrease in costs associated withduring the MergerSuccessor comparedthree toand thesix priormonths year.ended June 30, 2026, respectively.

Depreciation and amortization expense for the Successor three months ended MarchJune 31,30, 2026 increased $27.6$20.0 million from $69.8$71.7 million compared to the Successor three months ended June 30, 2025. Depreciation and amortization expense for the Successor six months ended June 30, 2026 increased $47.6 million compared to the Predecessor period from January 1, 2025 to February 7, 2025 and Successor period from February 8, 2025 to MarchJune 31,30, 2025. Changes year over year are primarily due to a $28.1$51.3 million increase in expense attributable to our Bally’s Intralot business,entities, partially offset by a decrease in depreciation expense related to the assets sold as part of the Bally’s Twin River sale-leaseback with Gaming and Leisure Properties, Inc. (“GLPI”) in the first quarter of 2026.

Income (Loss) Income From Operations

IncomeLoss from operations was $91.6$34.0 million for the Successor three months ended MarchJune 31,30, 2026, compared to Loss from operations of $22.6$2.4 million for the Successor three months ended June 30, 2025. Income from operations was $57.6 million for the Successor six months ended June 30, 2026, compared to Loss from operations of $25.0 million for the Predecessor period from January 1, 2025 to February 7, 2025 and Successor period from February 8, 2025 to MarchJune 31,30, 2025. Changes year over year are primarily due to a $105.8 million Gain on sale-leaseback in the Successor three months ended MarchJune 31,30, 2026.

Other Income (Expense)

Other Expense was $255.7$143.5 million for the Successor three months ended MarchJune 31,30, 2026, compared to $90.4$40.6 million for the Successor three months ended June 30, 2025. Other Expense was $399.3 million for the Successor six months ended June 30, 2026, compared to $130.9 million for the Predecessor period from January 1, 2025 to February 7, 2025 and Successor period from February 8, 2025 to MarchJune 31,30, 2025. The increase of $165.4$268.3 million year over year is primarily due to a $63.4$205.9 million Lossincrease on Extinguishment of Debt and $104.3 millionin Loss on fair value of fair value option assetsassets, coupled with a $46.0 million increase in Loss on debt extinguishment in the Successorcurrent three months ended March 31, 2026, compared to $17.4 million Loss on Extinguishment of Debt and $5.5 million gain on fair value of fair value option assets in the Predecessor period from January 1, 2025 to February 7, 2025 and Successor period from February 8, 2025 to March 31, 2025.year.

During the three and six months ended MarchJune 31,30, 2026 (Successor) and the period from February 8, 2025 to March 31, 2025 (Successor), the Company recorded a benefit for income tax of $3.2$13.6 million and $97.1$16.8 million, respectively. ForDuring the three months ended June 30, 2025 (Successor), the period from February 8, 2025 to June 30, 2025 (Successor) and the period from January 1, 2025 to February 7, 2025 (Predecessor), the Company recorded a provision of $0.7$185.4 million.million, The$88.3 effective tax rate for the three months ended March 31, 2026 (Successor), the period from February 8, 2025 to March 31, 2025 (Successor)million and the$0.7 period from January 1, 2025 to February 7, 2025 (Predecessor) was 2.0%, 155.2% and (1.3)%,million, respectively.

The effective tax rate for the three months ended June 30, 2026 (Successor) and June 30, 2025 (Successor) was 7.6% and (431.3)%, respectively. The effective tax rate for the six months ended June 30, 2026 (Successor), the period from February 8, 2025 to June 30, 2025 (Successor) and the period from January 1, 2025 to February 7, 2025 (Predecessor) was 4.9%, (83.7)% and (1.3)%, respectively. As of MarchJune 31,30, 2026 (Successor), the Company projects an annual tax benefit relative to its pre-tax loss offset in part by the valuation allowance on interest and a $13.3$14.3 million discrete provision on the benefit of the Bally’s Twin River sale-leaseback during the three months ended March 31, 2026 (Successor).

Net loss attributable to Bally’s Corporation for the Successor three months ended MarchJune 31,30, 2026 was $146.1 million compared to a net loss of $228.4 million for the Successor three months ended June 30, 2025. Net loss attributable to Bally’s Corporation for the six months ended June 30, 2026 (Successor) was $161.9$308.0 million compared to a combined net loss of $16.5$244.9 million for the Predecessor period from January 1, 2025 to February 7, 2025 and Successor period from February 8, 2025 to MarchJune 31,30, 2025. This fluctuation from the prior year was attributable to the factors noted above.

The following table presents segment Adjusted EBITDAR, which is our reportable segment GAAP measure and our primary measure for profit or loss for our reportable segments, and consolidated Adjusted EBITDA. The following table reconciles consolidated Adjusted EBITDA, which is a non-GAAP measure, to net income (loss),loss, as derived from our financial statements:

(3) Includes acquisition, integration and other transaction related costs, and financing costs incurred in connection with the Company’s sale lease-back transactions.transactions and credit agreements.

(5) Gain on sale-leaseback, net is related to the transaction for Bally’s Twin River which occurred during the threefirst monthsquarter ended March 31,of 2026.

(6) Costs incurred in connection with (i) the Company’sMerger mergertransactions withthat Standardwere Generalconsummated on February 7, 2025 and (ii) the Intralot Transaction.

There were no material changes to other critical accounting estimates during the period covered by this Quarterly Report on Form 10-Q. Refer to Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for a complete list of our Critical Accounting Estimates.

We are a holding company. Our ability to fund our obligations depends on existing cash on hand, cash flow from our subsidiaries and our ability to raise capital. Our primary sources of liquidity and capital resources have been cash on hand, cash flow from operations, borrowings under our Revolving Credit Facility (as defined herein) and proceeds from the issuance of debt and equity securities. We assess liquidity in terms of the ability to generate cash or obtain financing in order to fund operating, investing and debt service requirements. Our primary ongoing cash requirements include the funding of operations, capital expenditures, acquisitions and other investments in line with our business strategy and debt repayment obligations and interest payments. Our strategy has been to maintain moderate leverage and substantial capital resources in order to take advantage of opportunities, to invest in our businesses and acquire properties at what we believe to be attractive valuations. As such, we have continued to invest in our land-based casino business and build on our interactive/iGaming business. We believe that existing cash balances, operating cash flows and availability under our Revolving Credit Facility, as explained below, will be sufficient to meet funding needs for operating, capital expenditure and debt service purposes.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 (Successor) was $145.0$265.9 million compared to $38.2$21.4 million for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor period from February 8, 2025 to MarchJune 31,30, 2025. The increase in cash used was primarily driven by the $98.9 million in up front license fees paid during the six months ended June 30, 2026 (Successor), coupled with increased net losses duringof $79.9 million and the three months ended March 31, 2026 (Successor) of $144.3 million, coupled with theCompany’s changes in working capital, offset by the $97.9 million received from GLPI in the current period for capital expenditures related to the construction of the Company’s permanent casino in Chicago.capital.

Net cash provided by investing activities for the threesix months ended MarchJune 31,30, 2026 (Successor) was $120.2$74.1 million compared to net cash used in investing activities of $38.5$181.2 million for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor period from February 8, 2025 to MarchJune 31,30, 2025. This increase was driven primarily by the $685.0 million of proceeds received from the Bally’s Twin River sale-leaseback, offset by the $500.0 million paid in the first quarter of 2026 for the New York gaming license fee.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 (Successor) was $242.4$232.3 millionmillion, compared to net cash provided by financing activities of $112.1$217.7 million for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor period from February 8, 2025 to MarchJune 31,30, 2025. The fluctuation from the 2025 periods is primarily due to $123.8$49.1 million of net debt repayments during the threesix months ended MarchJune 31,30, 2026 (Successor), compared to net debt issuances of $435.4$545.5 million during the 2025 periods, coupled with the $416.2 million of share repurchases during the Successor period from February 8, 2025 to MarchJune 31,30, 2025.

As of MarchJune 31,30, 2026, there was $95.5 million available for use under the capital return program, subject to limitations in our regulatory and debt agreements. Future share repurchases may be effected in various ways, which could include open-market or private repurchase transactions, accelerated stock repurchase programs, tender offers or other transactions. The amount, timing and terms of any return of capital transaction will be determined based on prevailing market conditions and other factors. There is no fixed time period to complete share repurchases.

We did not pay cash dividends during the Successorperiods three months ended March 31, 2026, the Successor period from February 8, 2025 to March 31, 2025, nor the Predecessor period from January 1, 2025 to February 7, 2025,presented, nor do we currently intend to pay any dividends on our common stock in the foreseeable future. Any future determinations relating to our dividend policies will be made at the discretion of our Board of Directors (the “Board”) and will depend on conditions then existing, including our financial condition, results of operations, contractual restrictions, capital and regulatory requirements and other factors our Board may deem relevant.

In 2021, we issued $750.0 million aggregate principal amount of 5.625% senior notes due 2029 and $750.0 million aggregate principal amount of 5.875% senior notes due 2031. The indenture for these senior notes contains covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, (i) incur additional indebtedness, (ii) pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, (iii) enter into certain transactions with affiliates, (iv) sell or otherwise dispose of assets, (v) create or incur liens and (vi) merge, consolidate or sell all or substantially all of the Company’s assets. These covenants are subject to exceptions and qualifications set forth in the indenture.

On October 1,In 2021, the Company and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”) with Deutsche Bank AG New York Branch, as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent (in such capacity, the “Collateral Agent”), and the other lenders party thereto, providing for senior secured financing of up to $2.565 billion, consisting of a senior secured term loan facility in an initial aggregate principal amount of $1.945 billion (the “Term Loan Facility”), which was scheduled to mature in 2028, and a senior secured revolving credit facility in an initial aggregate principal amount of $620.0 million (the “Revolving Credit Facility”), which had an initial maturity date in 2026..

Following the effectiveness of Amendment No. 3 and the Incremental Joinder Agreement which occurred on January 6, 2026, a portion of the Revolving Credit Facility will mature in October 2028, while the remaining portion will continue to mature on its originally scheduled maturity date in October 2026. Amendment No. 3 and the Amended Credit Agreement also provide for reductions in revolving commitments and related prepayments if specified transactions are completed. The Revolving Credit Facility will continue to bear interest, at the Company’s option, at a SOFR-based or base-rate benchmark plus an applicable margin determined by the Company’s consolidated total-leverage ratio. The credit facilities under the Amended Credit Agreement continue to be guaranteed by the Company’s restricted subsidiaries (subject to customary exceptions) and secured by a first-priority lien on substantially all of the assets of the Company and such guarantors. Amendment No. 3 also refined the financial maintenance covenant applicable to the revolving lenders and reduced the utilization threshold at which the covenant becomes effective to 25%.lenders.