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 Private 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 date they are made 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 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”);

•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 June 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 16 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, and are developing Bally’s Chicago, 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.

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. 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 the 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.

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 16 “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 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. 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.

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, 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 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 re

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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:

__________________________________

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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