Bally's (BALY) risk factors, FY2024 10-K

Other

1. 01The gaming industry, including retail casinos and iGaming, is very competitive and increased competition, including through legislative legalization or expansion of gaming by states in or near where we own facilities or through Native American gaming facilities, could adversely affect our financial results
2. 02We face significant competition in all areas in which we conduct our business. Increased competitive pressures may adversely affect our ability to continue to attract customers or affect our ability to compete efficiently
3. 03We are subject to extensive laws, regulation and licensing, and gaming authorities have significant control over our operations, which could have an adverse effect on our business
4. 04We are subject to numerous laws that may expose us to liabilities or have a significant adverse impact on our operations. Changes to any such laws could have a material adverse effect on our operations and financial condition
5. 05Failure to comply with the terms of the Regulatory Agreement could result in a breach and could harm our business
6. 06We are subject to extensive environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities
7. 07We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our business and financial condition
8. 08We or certain third parties that we rely on may fail to establish and maintain effective and compliant anti-money laundering (“AML”), counter terrorism financing, safer gambling, fraud detection, risk management and other regulatory policies, procedures and controls
9. 09The regulatory framework which governs our business, and its interpretation, may be subject to change which we may fail to anticipate and/or respond to
10. 10New legislation governing the online gaming industry may be introduced in the UK which limits or restricts our operating model in that market
11. 11We derive meaningful revenues from players located in jurisdictions in which we do not hold a license
12. 12We are exposed to exchange rate risks
13. 13Our substantial activities in foreign jurisdictions may be affected by factors outside of our control
14. 14Our activities are affected by the General Data Protection Regulation, as implemented in each of the UK and the EU (collectively, “GDPR”)

Business Operational Risks

1. 15We will be reliant on effective payment processing services from a limited number of providers in each of the markets in which we operate
2. 16Our VLTs and table games hold percentages may fluctuate
3. 17Our profitability will be dependent, in part, on return to players
4. 18The success, including win or hold rates, of existing or future sports betting and iGaming products depends on a variety of factors and is not completely controlled by us
5. 19We extend credit to a portion of our customers, and we may not be able to collect gaming receivables from our credit customers
6. 20Declining popularity of games and changes in device preferences of players could have a negative effect on our business
7. 21The casino, hotel and hospitality industry is capital intensive and we may not be able to finance development, expansion and renovation projects, which could put us at a competitive disadvantage
8. 22We may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate acquired businesses into our company or otherwise manage the growth associated with multiple acquisitions
9. 23We face risks associated with growth and acquisitions
10. 24We may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures or new business strategies
11. 25Following the merger with Queen, there can be no assurance that Bally’s will be able to successfully integrate Queen or otherwise realize any expected benefits of the merger transactions
12. 26Our business depends, in part, on strategic relationships with third parties. Overreliance on certain third parties or our inability to extend existing relationships or agree to new relationships may cause unanticipated costs for us and impact our financial performance in the future
13. 27Our branded sites are heavily reliant on well-known brands owned by third parties
14. 28A portion of our casinos are located on leased property. If we default on one or more leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected casino
15. 29There will also be certain restrictions on our ability to assign our interest in the Chicago MLA without having to obtain GLPI’s prior consent, including requirements for the transferee (or its parent company) to satisfy certain financial metrics and have a certain level of experience in operating or managing casinos
16. 30We rely on other third-party sports data providers for real-time and accurate data for sporting events, and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition and results of operations could be adversely affected
17. 31Our management identified a material weakness in our internal control over financial reporting which could, if not remediated, result in material misstatements in our consolidated financial statements
18. 32We conduct our business in an industry that is subject to high taxes and may be subject to higher taxes in the future
19. 33New and future changes to US and non-US tax laws could adversely affect our business
20. 34If we fail to detect fraud, theft or cheating, including by our customers and employees, our reputation may suffer which could harm our brand and reputation and negatively impact our business, financial condition and results of operations and can subject us to investigations and litigation
21. 35We are largely dependent on the skill and experience of management and key personnel
22. 36We are subject to risks associated with labor relations, labor costs and labor disruptions
23. 37Our obligation to fund multi-employer defined benefit pension plans to which we are a party may adversely affect us
24. 38We may incur impairments to goodwill, indefinite-lived intangible assets or long-lived assets
25. 39Our operations have historically been subject to seasonal variations and quarterly fluctuations in operating results, and we can expect to experience such variations and fluctuations in the future
26. 40Our business is particularly sensitive to energy prices and a rise in energy prices could harm our operating results
27. 41Expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational harm and other unforeseen adverse effects on our business
28. 42Our insurance and self-insurance programs may not be adequate to cover future claims
29. 43Natural disasters, such as major hurricanes, typhoons, tornados, floods, fires and earthquakes, could adversely affect our business and operating results. Hurricanes are common in the areas in which our Mississippi and Louisiana properties are located, and the severity of such natural disasters is unpredictable
30. 44In addition, other events beyond our control, such as travel disruptions impacting the ability of people to travel to our casino properties, could impact our business. For example, the closure of Washington Bridge in Rhode Island has impacted foot traffic at our Rhode Island properties, particularly Bally’s Twin River

Cybersecurity and Technology Risks

1. 45We are reliant on the reliability and viability of internet infrastructure, which is out of our control, and the proper functioning of our own network systems
2. 46Our business may be harmed from cybersecurity incidents and we may be subject to legal claims if there is loss, disclosure or misappropriation of or access to our customers’, business partners’ or our own information or other breaches of information security
3. 47Our debt agreements and the Regulatory Agreement contain restrictive covenants that may limit our operating flexibility
4. 48Our existing and future indebtedness may limit our operating and financial flexibility
5. 49Servicing our indebtedness and funding our other obligations requires a significant amount of cash, and our ability to generate sufficient cash depends on many factors, some of which will be beyond our control
6. 50Borrowings under our Credit Facility are at variable rates of interest and expose us to interest rate volatility. If interest rates increase, our debt service obligations on certain of our variable rate indebtedness will increase even though the amount borrowed remains the same
7. 51A market downturn may negatively impact our access to financing

Risks Related to our Common Stock

1. 52The market price of our common stock could fluctuate significantly
2. 53Our largest shareholder owns a controlling percentage of our outstanding common stock, which could limit the ability of other shareholders to influence corporate matters
3. 54We are not paying dividends and any decision to do so in the future will be at the discretion of our Board
4. 55We are a holding company and will depend on our subsidiaries for dividends, distributions and other payments