Bally’s is facing growing financial pressure as it pursues an aggressive expansion strategy while the gambling industry increasingly shifts toward online betting, The Wall Street Journal reports.
The casino operator recently warned investors that, without securing new financing or completing planned transactions, it could violate liquidity and leverage requirements within a year, raising “substantial doubt” about its ability to continue as a going concern. The company, however, says the situation is manageable and expects planned financing and asset sales to meet its funding needs.
Lauren Westerfield, global vice president of public relations and social media for Bally’s, tells Daily Report the company’s financial challenges will not have any immediate impact on its Baton Rouge operations.
Bally’s financial challenges are particularly concerning because it is investing billions of dollars in major projects, including a $4 billion casino resort in New York’s Bronx, a $1.7 billion permanent casino in Chicago and a $1.2 billion hotel-casino development in Las Vegas. These investments come as online sports betting, online casinos and prediction markets grow much faster than traditional casinos.
Fitch Ratings has already warned that Bally’s debt levels are unsustainable at current levels, although analysts believe the company still has options to raise cash. Company chair Soo Kim remains confident in the long-term potential of Bally’s projects, especially in underserved markets such as New York. However, the company faces additional challenges in Chicago from expanded video gambling.
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