Coming off a sequence of cash-generating actual property gross sales in 2022, Bally’s (NYSE: BALY) may discover associated transactions sooner or later as avenues for funding mergers and acquisitions and new initiatives.
Bally’s on the Atlantic Metropolis Boardwalk. The operator may promote extra actual property sooner or later. (Picture: Bloomberg)
Incoming CEO Robeson Reeves made feedback to that impact on the on line casino operator’s fourth-quarter earnings convention name on Thursday.
I imply, we are going to all the time view our land financial institution as a software to proceed to develop earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) for the enterprise. It simply needs to be the precise deal,” stated Reeves in response to an analyst query. “We’re snug with Chicago funding at this level. So we wouldn’t go and faucet a manner and make until it’s for one more challenge or M&A chance.”
Final 12 months, Bally’s engaged in sale-leaseback transactions with Gaming and Leisure Properties (NASDAQ:GLPI) on one in every of its Rhode Island casinos and the Arduous Rock Biloxi in Mississippi. The owner additionally has an possibility to amass the true property belongings of Bally’s Twin River Lincoln On line casino Resort in Lincoln, RI earlier than the tip of 2024 for $771 million and extra lease of $58.8 million.
Bally’s Has Actual Property Versatility
Even with the aforementioned transactions and others, Bally’s sits on a treasure trove of on line casino actual property throughout the US, giving it flexibility to lift capital with out issuing shares or heading to debt markets.
Whereas some regional on line casino operators favor to carry onto property, Bally’s may monetize a few of its present portfolio of on line casino actual property to fund additional enlargement in its land-based gaming enterprise or cut back debt.
“BALY retail casinos are set to develop +15% given M&A and natural builds. Past ’23, development ought to proceed and considerably step up when it opens the ~$1.7 billion CBD Chicago property in June 2026, which we presently assign as $2 of valuation, however could possibly be as excessive as $7 of worth if profitable,” wrote Macquarie analyst Chad Beynon in a word to purchasers.
A very priceless piece of actual property owned by Bally’s is the Tropicana on the Las Vegas Strip. Whereas that’s the operator’s solely venue within the US gaming hub, it is also the location of a brand new stadium for the Oakland Athletics. Ought to that occur, Bally’s would doubtless command a robust value for that actual property.
New York Plans
It’s additionally doable that Bally’s may have interaction in future sale-leaseback offers to fund a New York Metropolis on line casino challenge whether it is awarded one in every of three downstate gaming permits.
The operator just lately threw its hat into that ring, pitching a gaming venue on the Trump Golf Hyperlinks at Ferry Level within the Bronx. Bally’s has an settlement in place to sub-lease 17 acres there from the Trump Group.
There’s chatter that Bally’s want to ultimately purchase all the 192-acre website and use among the land not occupied by the on line casino for parks and inexperienced area for public consumption.
