Bally's Issues Going Concern Warning, Shares Slide 36%

A going-concern warning is required when auditors see a real risk that the company could fail or be forced into bankruptcy within the next 12 months. Bally's outlined several factors behind the doubt: unexpected costs from construction projects, the impact of digital gaming on traditional casino operations, regulatory compliance costs, and risks from rapid growth.

The company owns and operates 20 casinos globally, including properties in the United Kingdom and 11 U.S. states. It also runs the Bally Bet sportsbook and iCasino, licensed in 14 North American jurisdictions, and holds a majority stake in Bally's Intralot.

Bally's has several large development projects under way. In Chicago, construction on the Bally's integrated resort was paused on some parts of the project. In the Bronx, the company signed a non-binding term sheet in July for a loan to fund the Bally's Bronx project. The company said the term sheet is not binding, and the two sides are still working toward a final agreement. “These plans have not been finalized, are subject to market conditions and the actions of third parties, are not within the company's control and there can be no assurance that the plans will be successfully implemented,” Bally's said. The company added that the plans do not eliminate the substantial doubt about its ability to remain a going concern.

Bally's also holds developable land in Las Vegas at the former Tropicana site and has a license to build a full-scale casino resort in the Bronx. The company's Chicago project was paused amid the uncertainty.

Despite the warning, Bally's stock is down only 4.9% over the past year.