Bally’s Corporation: Navigating Headwinds to Capture Global Gaming Dominance

Bally’s Corporation (BALY) delivered a mixed Q1 2025 earnings report, with total revenue declining 4.7% year-over-year to $589.2 million. However, beneath the top-line dip lies a compelling story of operational resilience and strategic repositioning. The company’s casino segment posted a 22% surge in EBITDAR, North America iGaming expanded by 24.4%, and its International Interactive division, now focused on regulated European markets, grew 24% year-over-year post-Asia divestiture. These metrics, coupled with the AUD $200M strategic investment in Star Entertainment and synergies from the Queen Casino integration, position bally’s as a buy for long-term investors. Let’s dissect why near-term challenges are temporary—and why Bally’s is primed for a valuation reset.

Casino Operations: A Margin Story

Bally’s Casinos & Resorts segment thrived in Q1, with EBITDAR up 22% despite modest revenue growth of 2.6%. This margin expansion reflects operational discipline:
- Queen Synergies: The integration of Queen Casino’s four properties (completed early 2025) brought best practices in cost management and regional gaming operations.
- Geographic Diversification: Bally’s now operates 19 U.S. casinos across 11 states, with projects in Chicago and State College, PA, expanding its footprint to 16 casinos. These moves reduce reliance on volatile markets like Atlantic City.

North America iGaming: Scaling in Prime Markets

Bally’s Bally Bet and Monopoly Casino platforms drove 24.4% revenue growth in North America iGaming. Key catalysts:
- Market Expansion: New licenses in Tennessee and New Jersey added ~$41.5M in Q1 revenue.
- Product Innovation: Bally Bet’s sportsbook and iCasino offerings are capturing share in high-growth U.S. markets.

International Repositioning: Europe’s Turn to Shine

After divesting its Asian operations in late 2024, Bally’s International Interactive segment now focuses on regulated European markets, where 24% revenue growth (excluding Asia) highlights its strategic shift:
- U.K. Dominance: The U.K. online division, a pillar of Bally’s Interactive International, grew 11.3% in Q4 2024 and likely sustained momentum in Q1.
- Star Entertainment Partnership: The AUD $200M investment in Star Entertainment (Australia’s largest gaming operator) unlocks synergies in regulated markets like Australia and Asia (via licensing), while shielding Bally’s from direct operational risks in volatile regions.

Why Near-Term Headwinds Fade

• Weather-Related Drag: Issues like Rhode Island’s bridge construction and Chicago’s underperforming temporary casino are temporary. The permanent Chicago site, once operational, could add $100M+ annual revenue.
• Macro Uncertainty: Bally’s exposure to regulated markets (low-risk, high-margin) insulates it from broader economic swings.

Margin Expansion and Buy Case

Bally’s adjusted EBITDAR margins are on track to hit 25%+ by 2026, up from 19% in 2024, fueled by:
- Cost Synergies: $57.6M in annual savings from Queen integration by 2026.
- Scale Advantages: Bally’s 17,700 slot machines and 3,950 hotel rooms create a moat in U.S. land-based gaming.

Verdict: Buy Bally’s for Long-Term Value

At a trailing P/E of 10.5x (vs. sector average of 14.2x), Bally’s is undervalued relative to its margin trajectory and secular growth in regulated markets. The $200M Star investment, synergies from Queen, and a pipeline of U.S. projects (e.g., Las Vegas development) justify a 20%+ upside in 12–18 months.

Risks: Regulatory delays in new markets, macro-driven U.S. leisure spending dips.

Action: Bally’s is a buy for investors seeking exposure to a gaming operator executing a disciplined turnaround. The headwinds are priced in—the upside is not.

Data sources: Bally’s Q1 2025 earnings report, company investor presentations, and analyst estimates.