Bally's Corp (BALY)

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the securities laws. 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 time of this report and we do not undertake to update or revise them as more information becomes available, except as required by law.

Important factors beyond those that apply to most businesses, some of which are beyond our control, that could cause actual results to differ materially from our expectations and assumptions include:

•unexpected costs and other events impacting our planned construction projects, including Bally’s Chicago;

•unexpected costs, difficulties integrating and other events impacting our completed acquisitions and our ability to realize anticipated benefits;

•risks associated with our rapid growth, including those affecting customer and employee retention, integration and controls;

•risks associated with the impact of the digitalization of gaming on our casino operations, our expansion into online gaming (“iGaming”) and sports betting and the highly competitive and rapidly changing aspects of our interactive businesses generally;

•the very substantial regulatory restrictions applicable to us, including costs of compliance;

•global economic challenges, including the impact of public health crises, global and regional conflicts, rising inflation, rising interest rates and supply-chain disruptions, could cause economic uncertainty and volatility and impact discretionary consumer spending;

•restrictions and limitations in agreements to which we are subject, including our debt, could significantly affect our ability to operate our business and our liquidity; and

•other risks identified in Part I. Item 1A. “Risk Factors” of Bally’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the SEC on March 23, 2026 and other filings with the SEC.

The foregoing list of important factors is not exclusive and does not include matters like changes in general economic conditions that affect substantially all gaming businesses.

You should not place undue reliance on our forward-looking statements.

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Overview

We are a global gaming, hospitality, entertainment and technology company with an expanding international footprint across casino, interactive and lottery markets. We provide our customers and partners with physical and interactive entertainment and gaming experiences worldwide. Our offerings include traditional casino gaming, iGaming, online bingo, sportsbook, free-to-play games and technology driven lottery and gaming solutions.

As of March 31, 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 14 jurisdictions in North America, and a majority equity interest in Bally’s Intralot S.A. (“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 a full-scale casino and resort in The Bronx, New York (“Bally’s New York”), and are developing an integrated destination resort in Chicago, Illinois.

Our Strategy and Business Developments

We seek to continue to grow our business by focusing on expanding our integrated casino and interactive gaming platform, optimizing our capital structure, and employing disciplined growth initiatives. We believe that interactive gaming represents a significant strategic opportunity for the future growth of Bally’s and we will continue to proactively allocate resources in regions where we anticipate iGaming regulation, in addition to those markets where iGaming is already well-established. Across the globe, we engage in multiple state and private bidding processes, seeking to obtain new lottery agreements through our innovative technology and solutions. We seek to increase revenues at our casinos and resorts through enhancing the guest experience by providing popular games, restaurants, hotel accommodations, entertainment and other amenities in attractive surroundings with high-quality guest service. We believe that our recent acquisitions have expanded and diversified us from financial and market exposure perspectives, while continuing to mitigate our susceptibility to regional economic downturns, idiosyncratic regulatory changes and increases in regional competition.

We continue to make progress on the integration of our acquired assets and deploying capital on our strategic growth projects. These steps have advanced our transformation into a globally diversified gaming and technology operator with a strengthened portfolio, expanded global footprint and enhanced platforms across both digital and land-based channels.

2025 Transactions

On February 7, 2025, the Company completed the previously announced transactions under the Agreement and Plan of Merger (as amended, the “Merger Agreement”) with SG Parent LLC, a Delaware limited liability company (“Parent”), The Queen Casino & Entertainment, Inc., a Delaware corporation and affiliate of Parent (“Queen”), Epsilon Sub I, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub I”), Epsilon Sub II, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub II”, and together with the Company and Merger Sub I, the “Company Parties”), and, solely for purposes of specified provisions thereof, SG CQ Gaming LLC, a Delaware limited liability company (“SG Gaming” and together with Parent and Queen, the “Buyer Parties”).

On October 8, 2025 (the “Intralot Closing Date”), the Company completed the previously announced acquisition under the transaction agreement (the “Transaction Agreement”) of Intralot, pursuant to which Intralot agreed to acquire Bally’s International Interactive through a combined cash-and-equity transaction. Pursuant to the Transaction Agreement, (i) Intralot paid the Company €1.5 billion ($1.8 billion) in cash and issued approximately 873.7 million new shares in exchange for all of the issued and outstanding capital stock of Bally’s Holdings Limited which held Bally’s International Interactive, (ii) the Company’s ownership of Intralot increased to a controlling 57.9% interest through the issuance of equity to the Company’s consolidated subsidiary Premier Entertainment Sub, LLC via PE Sub Holdings LLC, an indirect wholly owned subsidiary of the Company, making the Company the majority shareholder of Intralot (the “Intralot Transaction”).

As a result of obtaining a controlling financial interest in Intralot, the Company retained control of Bally’s International Interactive, via Bally’s Holdings Limited, throughout the transaction. On the Intralot Closing Date, legal ownership of Bally’s Holdings Limited transferred from Premier Entertainment Sub to Intralot; however, Bally’s Corporation simultaneously obtained control of Intralot. Accordingly, Bally’s maintained control of Bally’s International Interactive, and as a result, the transfer of Bally’s International Interactive was accounted for as an equity transaction with the initial recognition of a 42.1% non-controlling interest, and no gain or loss was recognized in earnings.

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For further information on our recent acquisitions, refer to Notes 1 “General Information” and 7 “Business Combinations” to our condensed consolidated financial statements presented in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Operating Structure

Our business is organized into four reportable segments: (i) Casinos & Resorts, (ii) Bally’s Intralot B2B, (iii) Bally’s Intralot B2C, and (iv) North America Interactive.

Casinos & Resorts - includes 19 land-based casino properties, two horse racetracks and one golf course in the US:

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(1)    Consists of three casino properties: Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino.

(2)    Properties leased from Gaming and Leisure Properties, Inc. (“GLPI”). Refer to Note 15 “Leases” for further information.

(3)    Temporary casino facility as the Company’s future permanent casino resort in Chicago (the “Chicago Permanent Facility”) is constructed. The site of the Chicago Permanent Facility is leased from GLPI.

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

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

North America Interactive - includes the North American operations of Bally’s Interactive, primarily a B2C online iGaming and online sportsbook operator; and consumer facing service and marketing engines.

Refer to Note 18 “Segment Reporting” to our condensed consolidated financial statements for additional information on our segment reporting structure.

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Macroeconomic and Other Factors

Our business is subject to risks

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ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our

consolidated financial statements and the related notes and other financial information included elsewhere in this Annual

Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual

Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking

statements that involve risks and uncertainties. You should review Item 1A. “Risk Factors” and “Cautionary Note Regarding

Forward-Looking Statements” in this Annual Report on Form 10-K for a discussion of important factors that could cause

actual results to differ materially from the results described in or implied by the forward-looking statements contained in the

following discussion and analysis.

Executive Overview

Our strategic initiatives in 2025 continued to advance our transformation into a more diversified, digitally enabled, and globally

scaled gaming and entertainment company.

•Portfolio Expansion: Completed the Merger with Standard General and Queen Casino, adding four regional properties

to our Casinos & Resorts portfolio and strengthening our US market presence.

•Strategic Transformation: Completed the multi-stage combination with Intralot, creating a unified global footprint and

strengthening both our B2B and B2C capabilities.

•International Growth: Invested A$200 million for a significant economic interest in The Star, expanding our global

reach.

•Bally’s Chicago: Completed the initial public offering and private placements of Bally’s Chicago Inc. and advanced

construction of the permanent casino supported by enhanced data-driven customer engagement.

•Major Developments: Announced planned development for an integrated resort and Major League Baseball stadium at

the former Tropicana Las Vegas site and secured a New York downstate commercial casino license for our anticipated

Bally’s Bronx integrated resort.

Together, we believe these steps continue to position the Company for sustainable long-term growth across our land-based and

interactive platforms, united under a single, leading brand.

Business Development Projects

Our business development projects are summarized above in “Our Strategy and Business Developments” section above and in

Note 7 “Business Combinations” to our consolidated financial statements presented in Part II, Item 8 of this Annual Report on

Form 10-K.

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Macroeconomic and Other Factors

Our business is subject to risks caused by global economic challenges, including those caused by public health crises such as

the COVID-19 pandemic, the impact of global and regional conflicts, rising inflation, rising interest rates and supply-chain

disruptions, that can cause economic uncertainty and volatility. These challenges can negatively impact discretionary consumer

spending and could result in 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. In addition, inflation generally affects our business by

increasing our cost of labor. In periods of sustained inflation, it may be difficult to effectively control such increases to our

costs and retain key personnel.

Key Performance Indicators

The key performance indicator used in managing our business is consolidated Adjusted EBITDA and segment Adjusted

EBITDAR which are non-GAAP measures. 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 with GLPI for the real estate

assets used in the operation of the Bally’s casinos and the assumption of the lease for real estate and land underlying the

operations of the Bally’s Lake Tahoe property.

We use consolidated Adjusted EBITDA and segment Adjusted EBITDAR to analyze the performance of our business and they

are used as determining factors for performance-based compensation for members of our management team. We use

consolidated Adjusted EBITDA and segment Adjusted EBITDAR when evaluating operating performance because we believe

that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a more fulsome

understanding of our core operating results and as a means to evaluate period-to-period performance. Also, we present

consolidated Adjusted EBITDA and segment Adjusted EBITDAR because they are used by some investors and creditors as

indicators of the strength and performance of ongoing business operations, including our ability to service debt, and to fund

capital expenditures, acquisitions and operations. These calculations are commonly used as a basis for investors, analysts and

credit rating agencies to evaluate and compare operating performance and value companies within our industry. Consolidated

Adjusted EBITDA and segment Adjusted EBITDAR information is presented because management believes that they are

commonly used measures of performance in the gaming industry and that they are considered by many to be key indicators of

our operating results.

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.

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 with GLPI and the lease for real

estate and land underlying the operations of the Bally’s Lake Tahoe property.

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Results of Operations

The following table presents, for the periods indicated, certain revenue and income items:

The following table presents, for the periods indicated, certain income and expense items expressed as a percentage of total

revenue:

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Note: Amounts in table may not subtotal due to rounding.

Segment Information

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 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 allocation resource. As a result, the Company determined it has four operating and reportable segments: Casinos & Resorts,

Bally's Intralot B2B, Bally's Intralot B2C and North America Interactive. Prior period reportable segment results and related

disclosures have been conformed to reflect the Company’s current reportable segments. Refer to “Our Operating Structure” in

Part I, Item 1 “Business” of this Annual Report on Form 10-K and Note 20 “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. 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.

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The predecessor period from January 1, 2025 to February 7, 2025 and successor period from February 8, 2025 to

December 31, 2025, compared to the year ended December 31, 2024.

Total revenue

Our total revenue consisted of the following:

Total revenue for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor period from February 8,

2025 to December 31, 2025 increased 8.4%, from $2.5 billion for the year ended December 31, 2024 (Predecessor). Increases

in total revenue from the year ended December 31, 2024 are primarily driven by the revenue additions from Queen, beginning

on February 8, 2025, and the Intralot entities, beginning October 8, 2025, contributing $216.0 million and $98.2 million,

respectively, to the Successor period from February 8, 2025 to December 31, 2025. These increases were partially offset by a

$170.1 million decrease in revenue from our previous markets associated with the sale of the Carved-Out Business in the fourth

quarter of 2024.

Gaming and non-gaming expenses

During the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor period from February 8, 2025 to

December 31, 2025, gaming and non-gaming expenses grew proportionally relative to total revenue. The expenses for the year

ended December 31, 2024 (Predecessor) amounted to $1.1 billion. This growth in expense compared to the prior year is

primarily due to the changes in revenue year over year.

General and administrative

General and administrative expense for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor

period from February 8, 2025 to December 31, 2025 compared to the year ended December 31, 2024 (Predecessor), increased

20.6% or $214.7 million, from $1.0 billion. These increases in the year to date comparable periods were mainly attributable to

additional costs for the Queen properties and Intralot entities of $91.7 million and $54.6 million, respectively, costs incurred in

connection with the Merger Agreement and Intralot Transaction of $33.9 million and $40.5 million, respectively, and a $17.1

million provision for credit loss on long-term note receivable related to the Carved-Out Business. These increases were partially

offset by the Loss on disposal of business of $27.8 million recorded in the prior year related to the sale of the Carved-Out

Business in the fourth quarter of 2024.

Impairment charges

In the Successor period from February 8, 2025 to December 31, 2025, we recorded total impairment charges of $181.6 million

which included $109.1 million and $72.5 million impairment charges in the Bally's Intralot B2B segment related to its

intangible assets and goodwill, respectively, due to declining projected cash flows within its licensing business.

Depreciation and amortization

Depreciation and amortization expense for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor

period from February 8, 2025 to December 31, 2025 decreased $64.1 million from $379.5 million compared to the Predecessor

year ended December 31, 2024. Changes year over year are primarily due to the closure of our Tropicana Las Vegas property in

the first quarter of 2024, which caused the Company to record $80.1 million of accelerated depreciation in the prior year,

partially offset by a $22.8 million increase in expense from the Intralot entities in the fourth quarter of 2025.

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Loss from operations

Loss from operations for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor period from

February 8, 2025 to December 31, 2025 increased $40.1 million compared to the Predecessor year ended December 31, 2024.

These increased losses were primarily due to the incremental increase in Merger and Acquisition and integration costs of $106.1

million, partially offset by the decrease in impairment charges of $67.3 million.

Other (expense) income

Total Other expense, net for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor period from

February 8, 2025 to December 31, 2025 increased $75.7 million compared to the Predecessor year ended December 31, 2024.

These increases were primarily due to the $93.1 million loss on debt extinguishment recorded in the Successor period from

February 8, 2025 to December 31, 2025, increased interest expense from to higher borrowings and related interest rates year-

over-year and increased foreign exchange losses, partially offset by increased fair value gains of $219.0 million recorded in the

Successor period on the Company’s fair value option assets.

Provision for income taxes

The Company recorded a provision for income taxes of $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 (Predecessor), respectively. The effective tax rate was (7.70)%, (1.32)%, and (2.76)%,

respectively, for these same periods. The effective tax rates 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.

Net loss and loss per share

Net loss for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor period from February 8, 2025

to December 31, 2025 was $51.0 million and $650.1 million, respectively. Net loss for the Predecessor year ended December

31, 2024 was $567.8 million. These changes were all primarily attributable to the factors noted above.

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Adjusted EBITDA and Adjusted EBITDAR by Segment

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 loss.

The Other category is included in the following tables in order to reconcile the segment information to the Company’s

consolidated financial statements.

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(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) loss on extinguishment of debt, (iii) non-operating items of equity

method investments and fair value option assets, and (iv) other (income) expense, net.

(3)Includes acquisition, integration and other transaction related costs, as well as financing costs incurred in connection with the Company's sale lease-back

transactions.

(4)Restructuring charges representing the severance and employee related benefits related to the announced Interactive business restructuring initiatives and

the closure of the Company’s Tropicana Las Vegas property on April 2, 2024 (Predecessor).

(5)Demolition and closure costs associated with the Tropicana Las Vegas property which is part of the plan to redevelop the site with a state-of-the-art

integrated resort and ballpark. As part of the binding term sheet, GLPI has reimbursed the Company for its demolition expenses and had increased rent to

reflect the additional funding.

(6)Gain on sale-leaseback, net is related to Bally’s Kansas City, Bally’s Shreveport and the Company’s Bally’s Chicago project during the year ended

December 31, 2024 (Predecessor).

(7)Loss on disposal of business of $27.8 million recorded in 2024 (Predecessor) related to the sale of its interactive business in Asia and certain other

international markets in its Bally's Intralot B2C reportable segment in the fourth quarter of 2024 (Predecessor).

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(8)Impairment charges in the Successor period from February 8, 2025 to December 31, 2025 includes $109.1 million and $72.5 million impairment charges

in the Bally's Intralot B2B segment related to its intangible assets and goodwill, respectively. Impairment charges for 2024 includes $125.9 million and

$71.6 million impairment charges in the Bally's Intralot B2B segment related to its intangible assets and goodwill, respectively, $12.8 million impairment

charges in the Bally's Intralot B2C segment related to certain other long-lived assets, as well as $38.6 million of impairment charges on gaming licenses in

connection with our Casinos & Resorts reportable segment.

(9)Costs incurred in connection with the Company’s Merger with Standard General and Intralot Transaction

(10)In the third quarter of 2024 (Predecessor), the Company recorded a $6.3 million charge to reduce amounts due from payment service providers (“PSP”)

due to a circumstance whereby the payment processer for certain online sports wagering deposits failed to capture and settle funds with patrons of the

Company. The Company was not able to recover the full amount due from the payment service provider, resulting in a write down to the recoverable

amount. In addition to amounts recovered, the Company received $5.1 million from the PSP as a signing bonus for entering into an extension agreement.

(11)Other includes the following items in the Successor period from February 8, 2025 to December 31, 2025: (i) a provision for credit loss of $17.1 million

related on the term loan receivable related to the sale of the Carved-Out Business in 2024, (ii) reorganization costs in connection with the Merger, Intralot

acquisition and other restructuring initiatives of $15.3 million, (iii) Oracle ERP non-capitalizable implementation costs of $8.5 million, and (iv) other

individually de minimis expenses. Other includes non-routine, individually de minimis, expenses in the Predecessor period from January 1, 2025 to

February 7, 2025. For the year ended December 31, 2024, other includes: (i) non-routine legal expenses, contract termination charges, and settlement

costs for matters outside the normal course of business, (ii) storm related insurance and business interruption recoveries, and (iii) other individually de

minimis expenses.

Liquidity and Capital Resources

Overview

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.

Cash Flows Summary

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Operating Activities

Net cash used in operating activities for the Predecessor period from January 1, 2025 to February 7, 2025 and the Successor

period from February 8, 2025 to December 31, 2025 was $91.2 million compared to $114.0 million net cash provided by

operating activities for the year ended December 31, 2024 (Predecessor). The increase in cash used was primarily driven by

increased net losses in the Successor period from February 8, 2025 to December 31, 2025 and the predecessor period from

January 1, 2025 to February 7, 2025 of $148.8 million, coupled with the changes in working capital.

Investing Activities

Net cash provided by investing activities for the Successor period from February 8, 2025 to December 31, 2025 of $1.8 billion

and cash used in investing for the Predecessor period from January 1, 2025 to February 7, 2025 of $17.7 million, compared to

$97.8 million of cash used in investing for the Year Ended December 31, 2024 (Predecessor) was driven primarily by net cash

acquired from acquisitions of $2.1 billion, offset by cash paid for the Star Investment of $127.6 million and capital expenditures

of $167.9 million.

Financing Activities

Net cash used in financing activities for the Successor period from February 8, 2025 to December 31, 2025 of $1.1 billion and

cash provided by financing for the Predecessor period from January 1, 2025 to February 7, 2025 of $98.0 million, compared to

$287.8 million of cash used in financing for the Year Ended December 31, 2024 (Predecessor) was driven primarily by

repayments of long term debt of $1.9 billion and share repurchases of $416.2 million, offset by issuances of long term debt of

$1.3 billion

Capital Return Program

As of December 31, 2025 (Successor), 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 period from February 8, 2025 to December 31, 2025 (Successor) or period from

January 1, 2025 to February 7, 2025 (Predecessor), 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 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.

Debt and Lease Obligations

Unsecured Notes

On August 20, 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. On October 1, 2021, upon the closing of the Gamesys acquisition,

we assumed the issuer’s obligation under the unsecured notes.

The indenture 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.

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2028 Notes

In connection with the closing of the Merger on February 7, 2025, we entered into a note purchase agreement and issued $500

million in aggregate principal amount of first lien senior secured notes due October 2, 2028, at an annual interest rate of 11%,

payable quarterly (the “2028 Notes”). These notes were guaranteed by the same restricted subsidiaries that guarantee the credit

facilities under the Credit Agreement (as defined below) and secured by the same collateral securing the credit facilities under

the Credit Agreement. The note purchase agreement mandated redemption offers in certain situations, such as asset sales and

unpermitted debt issuances, with specific redemption premiums applicable within the first two years. After two years, notes can

be redeemed at par. The note purchase agreement also included covenants limiting, among other things additional indebtedness,

dividend payments, asset sales, investments, and liens, subject to certain exceptions and qualifications. In October 2025, the

Company paid down the entire $500 million outstanding on its 2028 Notes as further described below.

Credit Facility

On October 1, 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 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.

In September 2025, the Company executed a Third Amendment to the Credit Agreement (“Amendment No. 3” and the Credit

Agreement, as so amended, the “Amended Credit Agreement”), by and among the Company, the subsidiaries of the Company

party thereto as guarantors, the lenders party thereto, the Administrative Agent and the Collateral agent, and an Incremental

Joinder Agreement (the “Incremental Joinder Agreement”) with Jefferies Finance LLC and the Administrative Agent. The

Incremental Joinder Agreement increased the available commitments under the Revolving Credit Facility by $50 million to

$670 million. Amendment No. 3 and the Incremental Joinder Agreement collectively extended the maturity date of a portion of

the Revolving Credit Facility and updated certain covenants and pricing provisions for the Revolving Credit Facility.

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 2028, while the remaining portion will continue to mature on its

originally scheduled maturity date in 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%.

The Amended Credit Agreement allows the Company to increase the size of the Term Loan Facility or request one or more

incremental term loan facilities or increase commitments under the Revolving Credit Facility or add one or more incremental

revolving facilities in an aggregate amount not to exceed the greater of $325 million and 50% of the Company’s consolidated

EBITDA for the most recent four-quarter period plus or minus certain amounts as specified in the Amended Credit Agreement,

including an unlimited amount subject to compliance with specified financial ratios.

The Amended Credit Agreement contains covenants that limit the ability of the Company and its restricted subsidiaries to,

among other things, incur additional indebtedness, pay dividends or make certain other restricted payments, sell assets, make

certain investments, and grant liens. These covenants are subject to exceptions and qualifications set forth in the Amended

Credit Agreement. The Revolving Credit Facility also includes certain financial covenants the Company is required to maintain

throughout the term of the Revolving Credit Facility. These financial covenants include a provision whereby, in the event

borrowings under the Revolving Credit Facility exceed 25% of the total revolving commitment, the Company is required to

maintain a first lien secured indebtedness to Adjusted EBITDA ratio of 4.00 to 1.00. As of December 31, 2025 (Successor), the

Company was in compliance with all applicable covenants as in effect as of such date.

With proceeds from the Transaction Agreement, the Company paid down $500.0 million of its secured indebtedness, applied

pro rata across its 2028 Notes and Term Loan Facility. Subsequently, the Company satisfied the remaining principal balance of

its 2028 Notes with an additional payment of $395.0 million, and incurred and paid a make-whole payment pursuant to the note

purchase agreement. Additionally, the Company repaid all outstanding amounts under the Revolving Credit Facility.

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The Company is a party to certain currency swaps which synthetically convert $500 million of its Term Loan Facility to an

equivalent fixed-rate Euro-denominated instrument, due October 2028, with a weighted average fixed interest rate of

approximately 6.69% per annum. The Company is also a party to additional currency swaps to synthetically convert $200

million, notional, of its floating rate Term Loan Facility, to an equivalent GBP-denominated floating rate instrument, due

October 2026. Additionally, as part of the Company’s risk management program to manage its overall interest rate exposure,

the Company has entered into a series of interest rate contracts in a notional aggregate amount of $1.00 billion, to further

manage the Company’s exposure to interest rate movements associated with the Company’s variable rate Term Loan Facility

through its synthetic conversion to fixed rate debt. The tenor of these contracts were matched with the maturity of the Term

Loan Facility tranche maturing on October 1, 2028.

Intralot Greek Retail Bond

On February 27, 2024, Intralot established a common bond loan program (the “Intralot Greek Retail Bond”) for the issuance of

up to €130.0 million aggregate principal amount of bonds, with a minimum issuance of €120.0 million The bonds admitted to

trading on the Fixed Income Securities category of the Regulated Market of the Athens Stock Exchange. As of December 31,

2025 (Successor), €130.0 million aggregate principal amount ($152.7 million) was outstanding under the Intralot Greek Retail

Bond.

The bonds bear interest at a fixed annual percentage of 6.00% per annum, which will remain fixed throughout the duration of

the bond loan. The interest is payable semi-annually. The Intralot Greek Retail Bond matures February 27, 2029, at which time

the Intralot is obliged to repay the principal in full, together with outstanding accrued interest and any other amounts payable.

The Intralot Greek Retail Bond is an unsecured obligation of Intralot, with the benefit of a first-priority pledge over a

designated bond loan collateral account. The bonds rank pari passu with the claims of all other unsecured creditors of Intralot,

with the exception of claims that have a statutory privilege. The Intralot Greek Retail Bond is not guaranteed by any of

Intralot’s subsidiaries.

Intralot may not redeem the bonds prior to the expiration of the second interest period following the issue date. Thereafter,

Intralot may redeem all or a portion of the bonds, subject to a minimum redemption amount of €15.0 million and a requirement

that at least €50.0 million in aggregate principal amount remain outstanding after any partial redemption. Early redemption is

subject to the payment of applicable premiums.

In the event of a change of control each bondholder has the right to require Intralot to repurchase of part or all of such

bondholder’s bonds at a price equal to 101% of the nominal value, plus accrued and unpaid interest and any additional amounts.

Intralot Greek Senior Facilities Agreement

On October 3, 2025, Intralot Capital Luxembourg S.A. (“Intralot Capital”), a wholly owned subsidiary of Intralot, entered into a

Senior Facilities Agreement (the “Intralot Greek Term Loan”) with Alpha Bank S.A., Optima Bank S.A., Piraeus Bank S.A.,

CrediaBank S.A. and other parties, providing for an amortizing euro-denominated term loan facility in an aggregate amount up

to €270.0 million of which Intralot has drawn €200.0 million as of December 31, 2025 (Successor).

The Intralot Greek Term Loan bears interest at a rate equal to 7.0% per annum. Interest periods may be selected in accordance

with the agreement terms. The Intralot Greek Term Loan requires semi-annual principal repayments plus accrued interest

through the maturity date of October 8, 2029.

The Intralot Greek Term Loan is secured on a pari passu basis with other senior secured indebtedness, subject to an

intercreditor agreement.

Intralot British Pound Term Loan

On September 18, 2025, Intralot Capital entered into a Senior Facilities Agreement (the “Intralot British Term Loan”) with

various lenders and agents, providing for a settling-denominated term loan facility in an aggregate principal amount of

£400.0 million. As of December 31, 2025 (Successor), £400.0 million ($538.7 million) was outstanding under the Intralot

British Term Loan.

The Intralot British Term Loan bears interest at a rate equal to SONIA (Sterling Overnight Index Average) plus a margin of

5.5%. Interest periods may be one, three, or six months, or such other periods as agreed among the parties. The Borrower pays

accrued interest on the last day of each interest period.

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The Intralot British Term Loan is secured by first-ranking security interests, including pledges over shares in the obligors and

material subsidiaries and, in certain jurisdictions, security over substantially all assets of the obligors. The Intralot British Term

Loan matures on October 8, 2031.

Intralot Fixed and Floating Interest Rate Bonds

On September 30, 2025, Intralot Capital issued €600.0 million aggregate principal amount of 6.750% Senior Secured Fixed

Rate Notes due 2031 (the “Intralot Fixed Rate Notes”) and €300.0 million aggregate principal amount of Senior Secured

Floating Rate Notes due 2031 (the “Intralot Floating Rate Notes” and, together with the Intralot Fixed Rate Notes, the “Intralot

Notes”), pursuant to an indenture dated September 30, 2025 (the “Intralot Indenture”) among Intralot Capital, Intralot as

guarantor, and The Law Debenture Trust Corporation p.l.c., as trustee. As of December 31, 2025 (Successor), the full

€900.0 million aggregate principal amount ($1.1 billion) of the Intralot Notes was outstanding.

The Intralot Fixed Rate Notes bear interest at a fixed rate of 6.750% per annum, payable semi-annually on April 15 and October

15 of each year, commencing on April 15, 2026. The Intralot Floating Rate Notes bear interest at a rate per annum, reset

quarterly, equal to three-month EURIBOR (subject to a 0% floor) plus 4.500%, payable quarterly on February 28, May 31,

August 31 and November 30 in each year, commencing on February 28, 2026. The Intralot Notes mature on October 15, 2031.

The Intralot Notes are senior secured obligations of Intralot Capital, secured by first-ranking security interests (to the extent

legally possible) over the share of obligors and material subsidiaries, structural intercompany receivables, and to the extent

customary in the applicable jurisdiction, substantially all assets of the obligors. Enforcement of security is subject to an

intercreditor agreement, and the Intralot Notes may share collateral on a pari passu or junior basis with other permitted

indebtedness as described in the Intralot Indenture.

The Intralot Notes are unconditionally guaranteed, jointly and severally, by Intralot and future guarantors that are required to

become a guarantor under the Intralot Indenture. The guarantees are subject to customary limitations under applicable law.

The Intralot Fixed Rate Notes may be redeemed at the option of Intralot Capital, in whole or in part, at any time on or after

October 15, 2027, at determined redemption prices over time, plus accrued and unpaid interest. Prior to October 15, 2027,

Intralot Capital may redeem the Intralot Fixed Rate Notes at a premium, which is the greater of (a) 1% of the outstanding

principal amount and (b) the present value of the redemption price at October 15, 2027 plus all required interest payments

through that date, computed using a discount rate equal to the Bund Rate plus 0.005 basis points, over the outstanding principal

amount.

The Intralot Floating Rate Notes may be redeemed at the option of Intralot Capital at any time on or after October 15, 2026, at a

redemption price equal to 100.0% of the principal amount redeemed plus accrued and unpaid interest.

In addition, prior to October 15, 2027 (in the case of Intralot Fixed Rate Notes) or October 15, 2026 (in the case of Intralot

Floating Rate Notes), Intralot Capital may redeem up to 40% of the aggregate principal amount of the Intralot Notes with the

net cash proceeds of certain equity offerings at a redemption price equal to 106.750% (in the case of Intralot Fixed Rate Notes)

of the principal amount plus accrued and unpaid interest, subject to certain conditions, including that at least 50% of the original

aggregate principal amount of the Intralot Notes must remain outstanding immediately after each such redemption.

The Intralot Notes are not convertible into equity securities of Intralot Capital or any other entity.

Intralot Super Senior Revolving Credit Facility

On October 3, 2025, Intralot Capital entered into a Super Senior Revolving Credit Facility Agreement (the “Intralot RCF

Agreement”) with various lenders and agents, providing for revolving credit commitments in an aggregate principal amount

equal to the greater of €190.0 million and 40.0% of Intralot’s four-quarter consolidated EBITDA. The facility may be utilized

by way of revolving loans, letters of credit, or ancillary facilities. The minimum utilization amount is €0.5 million for euro-

denominated borrowings.

The Intralot RCF Agreement initially bears interest at the applicable reference rate plus a margin of 4.50% per annum, subject

to future leverage-based adjustments ranging from 4.75% to 3.75% based on Intralot’s senior secured net leverage ratio.

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Intralot Capital pays a commitment fee equal to 30% of the applicable margin on unused commitments, payable quarterly in

arrears. Letter of credit fees are equal to the applicable margin for revolving loans, plus a fronting fee of 0.125% per annum.

The facility matures on July 1, 2030.

New Term Loan Facility

On February 11, 2026, the Company entered into a new $1.1 billion term loan credit facility due 2031 (the “Term Loans”). The

Term Loans were provided by funds managed by Ares Management Credit, King Street Capital Management, and TPG Credit.

The Term Loans are secured by substantially all material assets of the Company and its wholly owned subsidiaries, subject to

customary exceptions and exclusions.

Term Loan Facility and Revolving Credit Facility Repayments

On February 11, 2026, the Company repaid in full the outstanding balance under its Term Loan Facility, resulting in cash

payments of $1.48 billion. Additionally, in February 2026, the Company paid down $448.0 million of amounts outstanding

under its Revolving Credit Facility, which had been drawn in January 2026 to fund the New York gaming license fee. In

accordance with Amendment No. 3, following the closing of the Bally’s Twin River sale-leaseback, the Company’s

commitments under its Revolving Credit Facility were reduced by 22.5%.

Refer to Note 14 “Long-Term Debt” in Item 8 of this Annual Report on Form 10-K for further information.

Operating leases

The Company is committed under various operating lease agreements for real estate and property used in operations. Minimum

rent payable under operating leases was $3.41 billion as of December 31, 2025 (Successor), of which $236.9 million is due

within the next twelve months. Refer to Note 15 “Leases” in Item 8 of this Annual Report on Form 10-K for further

information.

GLPI leases

As of December 31, 2025 (Successor), the Company leases certain properties from GLPI under two separate master lease

agreements, the “Master Lease,” and the “Master Lease No. 2.” The Company’s Bally’s Evansville, Bally’s Dover, Bally’s

Quad Cities, Bally’s Black Hawk, Bally’s Tiverton and Hard Rock Biloxi properties are leased under the terms of the “Master

Lease” which requires combined initial minimum annual payments of $101.5 million. The Company’s Bally’s Kansas City and

Bally’s Shreveport properties are leased under the terms of the “Master Lease No. 2” which requires combined initial minimum

annual payments of $32.2 million. Both leases have an initial term of 15 years and include four, five-year options to renew and

are subject to a minimum 1% annual escalation or greater escalation dependent on the consumer price index (“CPI”).

Following the Merger, the Company also has a master lease agreement through Queen with GLPI, the “Queen Master Lease”,

with The Queen Baton Rouge, Bally's Baton Rouge Casino and Hotel, Casino Queen Marquette and DraftKings at Casino

Queen properties originally being leased under the terms of the Queen Master Lease, which required combined initial minimum

annual payments of $31.7 million. The Queen Master Lease has an initial term of 15 years and includes four, five-year options

to renew and is subject to annual escalation. Effective July 1, 2025, the DraftKings at Casino Queen and The Queen Baton

Rouge properties were transferred to Master Lease No. 2 and the associated annual payments of $28.9 million was reallocated

from the Casino Queen Master Lease to Master Lease No. 2. This was treated as a lease modification event where lease

payments were reallocated across components of the Master Lease No. 2 on a relative fair value basis and the right of use assets

and lease liabilities were remeasured.

In addition to the properties under the master leases explained above, the Company also entered into a lease with GLPI for the

land associated with Tropicana Las Vegas. This lease has an initial term of 50 years, with the possibility of extending up to 99

years through renewal options, and requires initial minimum annual payments of $10.5 million, subject to minimum 1% annual

escalation or greater escalation dependent on CPI. In 2024, the Company modified the lease and GLPI paid $48.6 million to the

Company to fund the demolition of the building at the Tropicana Las Vegas site in exchange for increasing initial annual

payments by $4.1 million, subject to a minimum 1% annual increase or greater based on CPI, for a total modified initial

minimum annual payment of $14.6 million.

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On July 17, 2025, the Company entered into the Chicago MLA, as described in Note 15 “Leases” in Item 8 of this Annual

Report on Form 10-K, with GLP, that amended the existing ground lease for the property on which the Company plans to

develop its Permanent Facility and a development agreement with GLP pursuant to which GLP has committed to advance up to

$940 million for the payment of hard costs used to construct the Permanent Facility in exchange for increasing the amount of

rent payable to GLP under the Chicago MLA.

The Chicago MLA has an initial term of 15 years and includes four, five-year options to renew and is subject to annual

escalation. Annual rent under the Chicago MLA is $20 million, with additional rent equal to 8.5% of the GLP Development

Advances that are granted to the Company. The amended and restated ground lease was considered a lease termination in the

third quarter due to the Company ceasing to control the use of the land effective upon signing of the Chicago MLA. As a result

of the termination, the right of use asset and lease liability were derecognized, and a $0.5 million gain on lease termination was

recorded. Effective with the signing of the Development Agreement, the Company reclassified construction in process to

Accounts Receivable related to assets for which title has transferred to GLP and the Company expects to receive funding.

Additionally, to the extent costs exceed the amount to be reimbursed by GLP, such costs are considered prepaid rent, which will

be added to the associated operating lease right of use asset once the lease commences. As of December 31, 2025 (Successor),

the construction receivable balance was $63.2 million, classified within Accounts receivable, net, and the prepaid rent balance

was $175.8 million, classified within Other assets. The Company incurred a loss on sale of assets to GLP of $8.7 million during

the third quarter of 2025 related to construction costs previously capitalized that were determined not to represent prepaid rent.

This loss is classified within General and administrative on the Consolidated Statement of Operations. During the fourth quarter

of 2025, the Company received reimbursements from GLP totaling $201.6 million.

On February 11, 2026, the Company completed the previously announced sale-leaseback of its Bally’s Twin River property to

GLP for total consideration of $700 million, with initial annual rent of $56 million. Following the sale-leaseback, Bally’s Twin

River is leased under the terms of Master Lease No. 2.

The Star Entertainment Group Investment

On April 7, 2025, the Company entered into a Binding Term Sheet with The Star, an ASX-listed company, to invest up to

A$300.0 million in a multi-tranche issuance of convertible notes and subordinated debt (the “Investment”). On April 8, 2025,

The Star announced a commitment from its largest shareholder, Investment Holdings Pty, to subscribe for A$100.0 million of

the Investment, reducing the Company’s commitment to A$200.0 million. During the second quarter of 2025 (Successor), the

Company funded A$133.3 million, consisting of Tranche 1A convertible notes of A$22.2 million (the “Convertible Notes”) and

subordinated debt with a principal amount of A$111.1 million (the “Subordinated Notes”). Additionally, on May 23, 2025, the

Company and The Star entered into a Subscription Agreement and a Subordination Deed Poll in favor of certain of The Star’s

senior lenders. During the fourth quarter of 2025 (Successor), the remainder of the Company’s A$66.7 million commitment was

funded in the form of subordinated debt. Additionally, upon the Company’s receipt of regulatory approval of the Investment in

the fourth quarter of 2025 (Successor), the Subordinated Notes settled into Convertible Notes on a cashless basis. Subsequently,

the Company converted the principal amount of the Convertible Notes into 2.5 billion ordinary shares of The Star at a

conversion price of A$0.08 per share, giving the Company a 37.7% equity interest in The Star. As of December 31, 2025

(Successor) the Company accounts for its investment in The Star as an equity method investment under the fair value option of

ASC 825, Financial Instruments.

Capital Expenditures

Capital expenditures are accounted for as either project, maintenance or capitalized software expenditures. Project capital

expenditures are for fixed asset additions that expand an existing facility or create a new facility. Maintenance capital

expenditures are expenditures to replace existing fixed assets with a useful life greater than one year that are obsolete, worn out

or no longer cost effective to repair, along with spending on other small projects that do not fit into the project category.

Capitalized software expenditures relate to the creation, production and preparation of software for use in our online gaming

operations.

During the period from February 8, 2025 to December 31, 2025 (Successor) and period from January 1, 2025 to February 7,

2025 (Predecessor), capital expenditures were $346.1 million and $16.4 million, compared to $199.8 million during the year

ended December 31, 2024 (Predecessor). In 2025 successor and predecessor reporting periods, we continued our spending on

our planned projects and maintenance at our casino properties, the most significant being our future Bally’s Chicago permanent

facility. Through the Chicago MLA and Queen Master Lease, the Company has received reimbursement for capital

expenditures during the period from February 8, 2025 to December 31, 2025 (Successor) of $269.2 million for qualifying

capital expenditures related to the Bally’s Chicago permanent facility and renovations at Bally's Baton Rouge Casino and Hotel.

We expect that capital expenditures, outside of the construction of the Bally’s Chicago permanent facility and the development

of the New York City casino and Las Vegas project, will be relatively flat in 2026 compared to 2025 as we continue our focus

on generating cash flows to invest in long-term growth opportunities for the entire Bally’s portfolio.

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Bally’s Twin River - In connection with our partnership with IGT, we have committed to invest $100 million in Bally’s Twin

River over the term of our master contract, ending in 2043, with Rhode Island to expand the property and add additional

amenities along with other capital improvements. Approximately $40.5 million of the committed investment remains as of

December 31, 2025 (Successor).

Bally’s Chicago - In connection with the host community agreement with the City of Chicago to develop, Bally’s Chicago

Operating Company, LLC (the “Developer”), a majority owned subsidiary of the Company, has committed to develop a

destination casino resort, to be named Bally’s Chicago, in downtown Chicago, Illinois and pay an annual fixed host community

impact fees of $4.0 million. The project also provides the Company with the exclusive right to operate a temporary casino,

which commenced operations on September 9, 2023 (Predecessor) at the Medinah Temple, for up to three years while the

permanent casino resort is constructed. To date, we have spent approximately $481.3 million related to the construction and

development of our permanent casino and resort, which is expected to open to the public in 2026. We expect future funding of

the permanent casino construction to be financed through the Chicago MLA agreement noted above and the Company’s capital

resources.

Additionally, in connection with the host community agreement, the Company provided the City of Chicago with a

performance guaranty whereby the Company agreed to have and maintain available financial resources in an amount reasonably

sufficient to allow the Developer to complete its obligations under the host community agreement. In addition, upon notice

from the City of Chicago that the Developer has failed to perform various obligations under the host community agreement, the

Company has indemnified the City of Chicago against any and all liability, claim or reasonable and documented expense the

City of Chicago may suffer or incur by reason of any nonperformance of any of the Developer’s obligations.

In furtherance of these obligations, the host community agreement requires us to spend at least $1.34 billion on the design,

construction and outfitting of our temporary casino and our permanent resort and casino. The actual cost of the development

may exceed this minimum capital investment requirement. In addition, land acquisition costs and financing costs, among other

types of costs, do not count towards satisfying such minimum expenditure.

Bally’s New York -  In November 2025, we entered into a Conveyance Agreement with the City of New York where the City

agreed to (i) dispose of certain parkland property interests to Bally’s New York (the “Development Parcel”), (ii) alienate certain

parkland in order to grant Bally’s New York a non-exclusive easement over such lands for purposes of accessing the

Development Parcel and (iii) discontinue certain lands as parkland and alienate and transfer jurisdiction of such lands to the

City’s Department of Transportation for use as public roadways (the “Ring Road Parcel”) to facilitate access to the

Development Parcel and so the Development Parcel may be used by the Company for a gaming facility.

The closing of the transactions contemplated by the Conveyance Agreement was contingent upon, among other things, (i)

Bally’s New York’s agreement to make certain capital improvements to Bally’s Golf Links with a fair market value of

approximately $161 million and (b) to deliver security instruments to the City to secure the performance and completion of

such capital improvements, (ii) the Company being awarded a downstate gaming facility license from the New York State

Gaming Commission, (iii) payment by Bally’s New York to the City’s Department of Parks & Recreation of an administrative

fee in the amount of $1 million, (iv) Bally’s New York’s agreement to pay for all costs and expenses for the development and

mapping of the Ring Road Parcel and (v) Bally’s New York’s payment of real property transfer taxes with respect to the

transactions contemplated by the Conveyance Agreement.

New York Gaming License Commitments

In December 2025, the Company was awarded one of New York State’s three downstate commercial casino licenses for its

planned Bally’s Bronx project, requiring the Company to pay a $500 million license fee, which was paid in the first quarter of

2026, as well as post a bond or cash deposit equal to 5% of the total project investment. The Company must also implement its

community benefit commitments, including periodic public reporting, and engage an independent Compliance Monitoring

Team approved by the New York State Gaming Commission to oversee regulatory, anti‑money‑laundering, and

community‑benefit compliance. Additionally, in February 2026, the Company paid $115 million of the $125 million in total

contingent consideration due to the seller of Bally’s Golf Links.

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Other Contractual Obligations

Sponsorship Commitments - The Company has entered into several sponsorship agreements with various professional sports

leagues and teams, allowing the Company use of official league marks for branding and promotions, among other rights. As of

December 31, 2025 (Successor), obligations related to these agreements were $114.9 million, with contracts extending through

2036.

Interactive Technology Partnerships - The Company has certain multi-year agreements with its various market access and

content providers, as well as its online sports betting platform partners, that require the Company to pay variable fees based on

revenue, with minimum annual guarantees. As of December 31, 2025 (Successor), the cumulative minimum obligation

committed in these agreements is approximately $32.1 million, extending through 2029.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with US GAAP requires us to make estimates and apply

judgments that affect reported amounts. These estimates and judgments are based on past events and/or expectations of future

outcomes. Actual results may differ from our estimates. We discuss our significant accounting policies used in preparing the

financial statements in Note 2 of our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form

10-K. The following is a summary of our critical accounting estimates and how they are applied in preparation of our

consolidated financial statements.

Valuation of Intangible Assets Acquired in Business Combinations

Intangible assets consist primarily of gaming licenses, trade names, developed technology and customer lists which have all

been obtained through business combinations.

Gaming licenses obtained through business combinations are generally recorded at their fair values through purchase

accounting using the Greenfield Method under the income approach. This method estimates isolated income that is properly

attributable to a license based on modeling a hypothetical start-up company going into business without any other assets than

the gaming license being valued and building a new casino with similar utility to the existing casino. Using this method, the

valuation of the gaming license is dependent upon significant estimates such as projected revenues and cash flows, estimated

construction costs, duration of that construction, pre-opening expenses and appropriate discounting. Gaming licenses accounted

for as asset acquisitions are valued at cost.

Trade names obtained through business combinations are valued using the relief-from-royalty method under the income

approach. This method estimates the cost savings that accrue to the owner of an intangible asset who would otherwise have to

pay royalties or license fees on revenues earned through the use of the asset. As such, the value of a trade name acquired

through a business combination is dependent upon estimates such as projected revenues, selection of an appropriate

hypothetical royalty rate and appropriate discounting. Trade names accounted for as asset acquisitions are valued at cost.

Developed technology is obtained through business combinations and is recorded at fair value through purchase accounting

using the Multi-Period Excess Earnings Method under the income approach. The principle behind this method is that the value

of an intangible asset is equal to the present value of the incremental after tax cash flows attributable only to the subject

intangible asset after deducting Contributory Asset Charges (“CACs”). The principle behind a CAC is that an intangible asset

‘rents’ or ‘leases’ from a hypothetical third party all the assets it requires to produce the cash flows resulting from its

development, that each project rents only those assets it needs and not the ones that it does not need, and that each project pays

the owner of the assets a fair return on the value of the rented assets. Under this method, the valuation of developed technology

is dependent on estimates such as projected revenues and cash flows, CAC and appropriate discounting.

Certain trade names are considered to be indefinite lived based on future expectations of continuing to brand our corporate

name and certain properties and online operations under the Bally’s trade name indefinitely. Intangible assets not subject to

amortization are reviewed for impairment annually as of October 1 and between annual test dates whenever events or changes

in circumstances may indicate that the carrying amount of the related asset may not be recoverable.

For its finite-lived intangible assets, we establish a useful life upon initial recognition based on the period over which the asset

is expected to contribute to the future cash flows of the Company and periodically evaluates the remaining useful lives to

determine whether events and circumstances warrant a revision to the remaining amortization period. Finite-lived intangible

assets are amortized over their remaining useful lives in a pattern in which the economic benefits of the intangible asset are

consumed, which is generally on a straight-line basis.

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Valuation and Subsequent Measurement of Goodwill

Assessing goodwill for impairment is a process that involves significant judgment and requires a qualitative and quantitative

analysis with many assumptions which fluctuate based on our business. We review goodwill at least annually and between

annual test dates if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. We have

elected to perform our annual tests for indications of impairment as of the first day of the fourth quarter of each year. The

evaluation of goodwill requires the use of estimates about future operating results of each reporting unit and asset to determine

the estimated fair value of the reporting unit. The Company must make various assumptions and estimates in performing its

impairment testing, including assumptions and estimates about future cash flows. Changes in estimates and assumptions used in

estimating future cash flows could produce significantly different results. If our ongoing estimates of future cash flows are not

met, we may have to record impairment charges in future periods.

When assessing goodwill for impairment, first, qualitative factors are assessed to determine whether it is more likely than not

that the fair value of a reporting unit is less than its carrying value. A qualitative impairment assessment involves analyzing

relevant events and circumstances, with greater weight assigned to events and circumstances that most affect the fair value or

the carrying amounts of a reporting unit’s assets. Items that are generally considered include, but are not limited to, the

following: macroeconomic conditions, industry and market conditions and overall financial performance. If the results of the

qualitative assessment are not conclusive, a quantitative goodwill test is performed. For the quantitative goodwill impairment

test, we estimate the fair value of the reporting unit using both income and market-based approaches. Specifically, the Company

applies the discounted cash flow (“DCF”) model under the income approach and the guideline public company method under

the market approach and weighs the results of the two valuation methodologies based on the facts and circumstances

surrounding the reporting unit. For the DCF model, we rely on the present value of expected future cash flows, including

terminal value, utilizing a market-based weighted average cost of capital (“WACC”) determined separately for the reporting

unit as of the valuation date. The determination of fair value under the DCF model involves the use of significant estimates and

assumptions, including revenue growth rates driven by future gaming activity, operating margins, capital expenditures, working

capital requirements, tax rates, terminal growth rates, and discount rates. For the market approach, we utilize a comparison of

the reporting unit to comparable publicly-traded companies and transactions and, based on the observed earnings multiples,

ultimately selects multiples to apply to the reporting unit. We then compare the fair value of our reporting units to the carrying

amounts. If the carrying amount of the reporting unit exceeds the fair value, an impairment is recorded equal to the amount of

the excess (not to exceed the amount of goodwill allocated to the reporting unit).

Assumptions and estimates about future cash flow levels and multiples by individual reporting units are complex and

subjective. The Company continuously monitors for events and circumstances that could negatively impact the key assumptions

in determining the fair value of its reporting units, including long-term revenue growth projections, profitability, discount rates,

external factors, such as industry, market and macro-economic conditions, and internal factors, such as changes in the

Company’s business strategy, which may re-allocate capital and resources to different or new opportunities but, in turn, may be

to the detriment of an individual reporting unit.

The Company completed its annual assessment for goodwill impairment as of October 1, 2025 (Successor), which resulted in

impairment charges to goodwill of $72.5 million related to a reporting unit within the Bally’s Intralot B2B segment due to

declining projected cash flows in the Company’s licensing revenues. The fair value was determined through a discounted cash

flow approach. The valuation utilized level 3 inputs including projected cash flows, a market-based WACC of 25% and a long

term growth rate of 2%. The most sensitive inputs to the estimated fair value of the reporting unit were the discount rate and

terminal growth rate. A hypothetical 100 basis point increase in the WACC or a 100 basis point decline in the terminal growth

rate would have resulted in incremental impairment charges of $1.5 million and $0.4 million, respectively. Material changes in

these estimates could occur and result in additional impairment in future periods.

Subsequent to the annual test, the Company identified a triggering event in affecting its International Interactive reporting unit

within its Bally's Intralot B2C segment due to the announced increase of the remote gaming duty tax in the UK from 21% to

40%, effective in April 2026. The Company performed a quantitative impairment test for a reporting unit within its Bally's

Intralot B2C segment. The estimated fair value of the reporting unit was determined through a combination of a discounted cash

flow model and market-based approach, which utilized inputs including future cash flow projections for the reporting units,

terminal growth rates of 3%, and discount rates of 12.0%. Goodwill associated with this reporting unit was $1.5 billion at

December 31, 2025 (Successor). The result of this assessment did not result in any impairment as fair value exceeded carrying

value by 82%. The most sensitive inputs to the estimated fair value of the reporting unit were the discount rate and terminal

growth rate. A hypothetical 100 basis point increase in the WACC or a 100 basis point decline in the terminal growth rate

would not have resulted in any impairment charge. Material changes in these estimates could occur and result in additional

impairment in future periods.

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Income Taxes

We prepare our income tax provision in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes.

Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences

attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and

their respective tax basis and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in

which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a

change in tax rates is recognized in income in the period that the rate change is enacted. A valuation allowance is required when

it is “more likely than not” that all or a portion of the deferred tax assets will not be realized. The consolidated financial

statements reflect expected future tax consequences of uncertain tax positions presuming the taxing authorities’ full knowledge

of the position and all relevant facts. We assessed our deferred tax liabilities arising from taxable temporary differences and

concluded such liabilities are not a sufficient source of income for the realization of deferred tax assets, including indefinite life

taxable temporary differences which offset, subject to limitation, deferred tax assets with unlimited carryovers, such as the

Section 163(j) interest limitation. Accordingly, the Company’s valuation allowance of $275.1 million reflects increases of

$127.9 million and $8.7 million recorded during the period from February 8, 2025 to December 31, 2025 and period from

January 1, 2025 to February 7, 2025, respectively. Additionally, the Company’s change in valuation allowance compared to the

balance at December 31, 2024 (Predecessor), included $36.3 million of purchase price allocation adjustments related to the

Intralot Transaction and Merger during the period from February 8, 2025 to December 31, 2025 (Successor).

The allocation of shared costs and intangible assets among our subsidiaries in various US domestic, state and international

jurisdictions is an estimate based on the principles of IRC Section 482, 1060 and 338 which is a critical estimate in the

computation of US and international tax provisions.

The interpretation of the IRC regulations related to the Tax Cuts and Jobs Acts, as it pertains to Section 163(j), is a critical

estimate in the computation of US federal taxes, and conforming states.

Recently Issued Accounting Pronouncements

For a discussion of recently issued financial accounting standards, refer to Note 5 “Recently Issued Accounting

Pronouncements,” of Part II. Item 8 of this Annual Report on Form 10-K for further detail.

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