Bally's Corporation (BALY) 2024年10-K年度報告「NYSE」.pdf

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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

2、Commission file number:001-38850BALLYS CORPORATION(Exact name of registrant as specified in its charter)Delaware20-0904604(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)100 Westminster Street,Providence,RI 02903(Address of principal executive offices

3、)(Zip Code)(401)475-8474(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading SymbolName of each exchange on which registeredCommon Stock,par value of$0.01 per shareBALYNew York Stock ExchangeSecurities registered pursu

4、ant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate b

5、y check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 duringthe preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirem

6、ents for thepast 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant

7、was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or anemerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller repo

8、rting company,”and“emerging growth company”inRule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transiti

9、on period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal controlover finan

10、cial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued itsaudit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant inc

11、luded in the filingreflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received byany of the registrants executive officers during

12、 the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30,2024 based on the

13、closing price on the New YorkStock Exchange for such date,was approximately$285.4 million.Indicate the number of shares outstanding of each of the issuers classes of common stock,as of the latest practicable date.Class Outstanding as of February 28,2025Common stock,$0.01 par value 48,509,873For addi

14、tional information regarding the Companys shares outstanding,refer to Note 20“Stockholders Equity.”DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants definitive Proxy Statement for the Annual Meeting of Stockholders to be held on May 15,2025 are incorporated by reference into Part IIIof

15、this Annual Report on Form 10-K.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm1/1622025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm2/162BALLYS CORPORATIONANNUAL REPORT ON F

16、ORM 10-KTABLE OF CONTENTS Page No.PART I ITEM 1.Business4ITEM 1A.Risk Factors12ITEM 1B.Unresolved Staff Comments36ITEM 1C.Cybersecurity37ITEM 2.Properties39ITEM 3.Legal Proceedings39ITEM 4.Mine Safety Disclosures39 PART II ITEM 5.Market for Registrants Common Equity,Related Stockholder Matters and I

17、ssuer Purchases of EquitySecurities40ITEM 7.Managements Discussion and Analysis of Financial Condition and Results of Operations41ITEM 7A.Quantitative and Qualitative Disclosures About Market Risk54ITEM 8.Financial Statements and Supplementary Data55ITEM 9.Changes in and Disagreements with Accountan

18、ts on Accounting and Financial Disclosure111ITEM 9A.Controls and Procedures111ITEM 9B.Other Information116ITEM 9C.Disclosure Regarding Foreign Jurisdictions That Prevent Inspections116 PART III ITEM 10.Directors,Executive Officers and Corporate Governance117ITEM 11.Executive Compensation117ITEM 12.S

19、ecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters117ITEM 13.Certain Relationships and Related Transactions,and Director Independence117ITEM 14.Principal Accounting Fees and Services117 PART IV ITEM 15.Exhibits and Financial Statement Schedules118ITEM 16.Fo

20、rm 10-K Summary121 SIGNATURES12222025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm3/162Cautionary Note Regarding Forward-Looking StatementsThis Annual Report on Form 10-K includes forward-looking statements within the meaning of the feder

21、al securities laws.Forward-looking statements are statements as to matters that are not historical facts,and include statements about our plans,objectives,expectations and intentions.Forward-looking statements are not guarantees and are subject to risks and uncertainties.Forward-looking statements a

22、re based onour current expectations and assumptions.Although we believe that our expectations and assumptions are reasonable at this time,they should not be regarded as representations that our expectations will be achieved.Actual results may vary materially.Forward-looking statements speak only as

23、of the time of this Annual Report on Form 10-K and we do not undertake to update or revise themas more information becomes available,except as required by law.Important factors beyond those that apply to most businesses,some of which are beyond our control,that could cause actual resultsto differ ma

24、terially from our expectations and assumptions include,without limitation:unexpected costs and other events impacting our planned construction projects,including Ballys Chicago;unexpected costs,difficulties integrating and other events impacting our completed acquisitions and our ability to realizea

25、nticipated benefits;risks associated with our rapid growth,including those affecting customer and employee retention,integration andcontrols;risks associated with the impact of the digitalization of gaming on our casino operations,our expansion into online gaming(“iGaming”)and sports betting and the

26、 highly competitive and rapidly changing aspects of our interactive businessesgenerally;the very substantial regulatory restrictions applicable to us,including costs of compliance;global economic challenges,including the impact of public health crises,global and regional conflicts,rising inflation,r

27、ising interest rates and supply-chain disruptions,could cause economic uncertainty and volatility and impactdiscretionary consumer spending;restrictions and limitations in agreements to which we are subject,including our debt,could significantly affect our abilityto operate our business and our liqu

28、idity;andother risks identified in Part I.Item 1A.“Risk Factors”of this Annual Report on Form 10K.The foregoing list of important factors is not exclusive and does not include matters like changes in general economic conditionsthat affect substantially all gaming businesses.You should not place undu

29、e reliance on our forward-looking statements.32025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm4/162PART IITEM 1.BUSINESSBallys Corporation,a Delaware corporation,with global headquarters in Providence,Rhode Island,is referred to as the“C

30、ompany,”“Ballys,”“we,”“our”or“us.”Our common stock is traded on the New York Stock Exchange(the“NYSE”)underthe symbol“BALY.”Our CompanyWe are a global gaming,hospitality and entertainment company with a portfolio of casinos and resorts and a growing omni-channelpresence.We provide our customers with

31、 physical and interactive entertainment and gaming experiences,including traditionalcasino offerings,iGaming,online bingo,sportsbook and free-to-play(“F2P”)games.As of February 28,2025,we own and operate 19 casinos in 11 states across the United States(“US”),one golf course in New York,one horse rac

32、etrack in Colorado,and Aspers Casino in the United Kingdom(“UK”)(“Ballys Newcastle”),which was added to ourportfolio in the fourth quarter of 2024.In February 2025,we merged with The Queen Casino&Entertainment Inc.(“Queen”)adding four additional casinos to our portfolio.We also own Bally Bet Sportsb

33、ook&Casino,a first-in-class sports betting andiCasino platform,Ballys Interactive International division,a leading global interactive gaming operator concentrated in Europe,and a significant stake in Intralot S.A.(“Intralot”),a global lottery management and services business.Our revenues are primari

34、lygenerated by these gaming and entertainment offerings.Our proprietary software and technology stack is designed to allow us toprovide consumers with differentiated offerings and exclusive content.Our Strategy and Business DevelopmentsWe seek to continue to grow our business by actively pursuing th

35、e acquisition and development of new gaming opportunities andreinvesting in our existing operations.We believe that interactive gaming represents a significant strategic opportunity for thefuture growth of Ballys and we will continue to actively focus resources in markets that we believe will regula

36、te iGaming.We seekto increase revenues at our casinos and resorts through enhancing the guest experience by providing popular games,restaurants,hotel accommodations,entertainment and other amenities in attractive surroundings with high-quality guest service.We believethat our recent acquisitions hav

37、e expanded and diversified us from financial and market exposure perspectives,while continuing tomitigate our susceptibility to regional economic downturns,idiosyncratic regulatory changes and increases in regional competition.We continue to make progress on the integration of our acquired assets an

38、d deploying capital on our strategic growth projects.Notable efforts in the current year include:We secured a critical$940 million construction and financing arrangement with Gaming&Leisure Properties(“GLPI”),which positions us to move forward with the construction of our flagship permanent casino i

39、n the heart of downtownChicago.With the demolition of the former Tribune buildings and the Citys final approval of our re-imagined permanentBallys Chicago Casino master plan,we look to begin construction in early 2025.Our existing Chicago Temporary Casinois allowing us to build relationships with pl

40、ayers in Chicago and establish our long-term presence in a market withfavorable adult population and demographics.Early in the fourth quarter of 2024,we completed the controlled demolition of the Tropicana hotel towers in Las Vegas,moving the As one step closer to the start of stadium construction a

41、nd allowing Ballys to plan for the broaderredevelopment of the site.In December 2024,we completed the sale lease-back of certain real property interests underlying our Ballys Kansas Cityand Ballys Shreveport casino properties to GLPI in a transaction valued at$395 million.We launched our Bally Bet C

42、asino iGaming app in Rhode Island,joining New Jersey,Pennsylvania,and Ontario,Canada,offering popular live casino games such as blackjack,roulette and baccarat.Additionally,we continued to expand ourNorth America Interactive presence with our Bally Bet sportsbook app,with our partners,Kambi and Whit

43、e Hat Gaming,further increasing our customer engagement with the Bally brand with a combined presence in 13 US states and Ontario,Canada.During the fourth quarter of 2024,we disposed of portions of our international interactive business in Asian and certainother international markets,transferring co

44、mponents of this business to an independent company led by the existingmanagement team for those operations(the“Carved-Out Business”).In addition,we transferred ownership of certainintellectual property used in the business into an independent trust,which began receiving license fees under a newcomm

45、ercial license arrangement.We also purchased a warrant representing a 19.99%fully diluted equity interest in theCarved-Out Business.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm5/16242025/5/19 13:47baly-20241231https:/www.sec.gov/Arch

46、ives/edgar/data/1747079/000174707925000039/baly-20241231.htm6/162On February 7,2025,the Company completed its transactions with Standard General L.P.(“Standard General”)and itsaffiliates,including Queen adding four new properties to our portfolio.For further information,refer to Note 1“GeneralInform

47、ation”to our consolidated financial statements presented in Part II,Item 8 of this Annual Report on Form 10-K.These steps have continued to position us as a prominent,full-service,vertically integrated iGaming company,with physicalcasinos and online gaming solutions united under a single,leading bra

48、nd.For further information on our recent acquisitions,refer to Note 7“Business Combinations”to our consolidated financialstatements presented in Part II,Item 8 of this Annual Report on Form 10-K.Our Operating StructureOur business is organized into three reportable segments:(i)Casinos&Resorts,(ii)In

49、ternational Interactive,and(iii)NorthAmerica Interactive.Casinos&Resorts-includes 19 land-based casino properties,one horse racetrack and one golf course as of February 28,2025:Property NameLocationBallys Atlantic City Casino Resort(“Ballys Atlantic City”)Atlantic City,New JerseyBallys Black Hawk(“B

50、allys Black Hawk”)Black Hawk,ColoradoBallys Chicago Casino(“Ballys Chicago”)Chicago,IllinoisBallys Dover Casino Resort(“Ballys Dover”)Dover,DelawareBallys Evansville Casino&Hotel(“Ballys Evansville”)Evansville,IndianaBallys Kansas City Casino(“Ballys Kansas City”)Kansas City,MissouriBallys Lake Taho

51、e Casino Resort(“Ballys Lake Tahoe”)Lake Tahoe,NevadaBallys Quad Cities Casino&Hotel(“Ballys Quad Cities”)Rock Island,IllinoisBallys Shreveport Casino&Hotel(“Ballys Shreveport”)Shreveport,LouisianaBallys Tiverton Casino&Hotel(“Ballys Tiverton”)Tiverton,Rhode IslandBallys Twin River Lincoln Casino Re

52、sort(“Ballys Twin River”)Lincoln,Rhode IslandBallys Vicksburg Casino(“Ballys Vicksburg”)Vicksburg,MississippiHard Rock Hotel&Casino Biloxi(“Hard Rock Biloxi”)Biloxi,MississippiBallys Arapahoe ParkAurora,ColoradoBallys Golf Links at Ferry Point(“Ballys Golf Links”)Bronx,New YorkCasino Queen Marquette

53、Marquette,IowaDraftKings at Casino QueenEast St.Louis,IllinoisThe Belle of Baton RougeBaton Rouge,LouisianaThe Queen Baton RougeBaton Rouge,Louisiana_(1)Consists of three casino properties:Ballys Black Hawk North Casino,Ballys Black Hawk West Casino and Ballys Black Hawk East Casino.(2)Properties le

54、ased from GLPI.Refer to Note 18“Leases”for further information.(3)Temporary casino facility,as a permanent casino resort is being constructed.(4)Properties acquired on February 7,2025,in connection with the transaction with Standard General and certain of its affiliates.International Interactive-inc

55、ludes Gamesys European operations and global licensing business,as well as one casino property,Ballys Newcastle,in the UK.North America Interactive-includes the North American operations of Gamesys,Ballys Interactive,primarily a B2C onlineiGaming and online sportsbook operator;and consumer facing se

56、rvice and marketing engines,including SportCaller,a business-to-business(“B2B”)and F2P game provider for sports betting companies.Refer to Note 23“Segment Reporting”to our consolidated financial statements presented in Part II,Item 8 of this Annual Reporton Form 10-K for additional information on ou

57、r segment reporting structure.(1)(2)(3)(2)(2)(2)(2)(2)(2)(2)(4)(4)(4)(4)52025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm7/162Our BrandsBallys BrandBallys is an iconic brand.We performed extensive market research in which active gamers i

58、ndicated an acute awareness of thebrand,but not necessarily a high usage of brand products and gaming offerings.We have rebranded every casino and resort in ourportfolio,except Hard Rock Biloxi,to build upon the deep legacy of the Ballys brand.Additionally,our research told us that gamers across the

59、 demographic age spectrum knew of Ballys brand and identified with thegaming entertainment aspect of slot machines,pinball machines,video machines and casinos.We believe in the industrial logic andvision of Ballys becoming a premier,truly integrated,omni-channel gaming company for both retail and on

60、line gamers.Theseinsights form the key tenets of our integrated Bally Rewards program specifically to enable customers to utilize compellingrewards universally in our interactive and casino and resort environments.We believe that our phased approach to the transformation of Ballys brand was thoughtf

61、ul and deliberate.There are exceptions toour rebranding initiative.For example,in the case of Hard Rock Biloxi,we decided to maintain the current“Hard Rock”namingrights arrangement.Nonetheless,Ballys remains at the center of our strategy.In summary,we remain focused in our continuing effort to rebir

62、th Ballys brand as a legendary,integrated brand,leveraging ourcasino and resort,interactive and media environments with a compelling rewards program to rival our competition.Interactive BrandsWe operate a suite of award-winning brands and are focused on building a diverse portfolio of distinctive an

63、d recognizable brandsthat deliver platforms,player experiences and gaming content globally.Our brands are generally as follows,which include certainlicensed brands:iGaming brands:Bally Casino,Rainbow Riches Casino,Virgin Casino,Virgin Games,Monopoly Casino;Online bingo:Jackpotjoy,Double Bubble Bingo

64、 and Botemania;Sportsbook:Bally Bet and Sportsbook;F2P:Bally Play,Bally Live and SportCaller;Gamesys,an iGaming and online bingo platform provider and operator;andTelescope,a provider of real-time audience engagement solutions for live events,gamified second screen experiences andinteractive livestr

65、eams.Our Technology and Product DevelopmentAt Ballys,weve brought together a blend of real money technology platforms and know-how that together deliver a portfolio ofexciting,diverse,and localized gaming products.At its heart,we combine more than 20 years of experience from competitive European onl

66、ine gaming markets,Ballys iGamingproducts and entrepreneurial spirit,and strong partnerships with third-party iGaming&Sports providers.Our talented technologyand product development teams continue to demonstrate a capability to relentlessly develop our products and launch into newmarkets.Our teams a

67、re highly skilled,ambitious and experienced.We have implemented a cutting-edge marketing platform that leverages real-time data,artificial intelligence,and machine learning.This platform facilitates real-time data analytics,predictive modeling,and responsible gaming capabilities.It also enables thec

68、reation of highly customizable and personalized marketing campaigns,supported by algorithms that enhance player acquisition,retention,engagement,and content personalization.Together with our established gaming platforms,we are optimally positioned todrive growth by optimizing existing markets and pr

69、eparing to launch in new markets in 2025 and beyond.In 2024,we significantly expanded and deepened our market presence in North America.In March,we launched an iGamingproduct in Rhode Island,becoming the exclusive provider for the state for the next 20 years.This offering features live table gamesst

70、reamed from a state-of-the-art live dealer studio at our Ballys Twin River property,in partnership with the live casino softwareprovider Stakelogic B.V.Later that year,we broadened our Sports and iGaming product footprint across North America and unifiedour platforms,creating a seamless traveling wa

71、llet for online players throughout the US.By the end of 2024,we were operationalin 13 US states and Ontario,Canada.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm8/16262025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1

72、747079/000174707925000039/baly-20241231.htm9/162Our International Interactive reporting segment has successfully maintained our thriving B2C business in the UK and Spain,whilerecently expanding into the Republic of Ireland.In 2024,we enhanced JackpotJoy and Bally Casino by adding a Sports productthr

73、ough our partnership with Kambi and updated our Native iOS and Android platforms.We continue to experience robust businessgrowth,driven by ongoing product development innovations and the introduction of new iGaming content from a diverse range ofthird-party game providers and partners.Our technology

74、 platforms integrate varying levels of proprietary and third-party software.We strategically invest in internallydeveloped technology where we believe it offers a competitive advantage in the market.Our platforms deliver core player accountmanagement functionality,including responsible gaming measur

75、es,critical compliance components,and high-performanceelectronic wallets.Our data and analytics platform supports core marketing processes and provides the basis for a global,customer-focused gaming platform across our portfolio of casinos and resorts and online gaming businesses.We are committed to

76、 investing in technology that drives business performance and provides a competitive edge.Our goal is tocontinuing to integrate our products across our entire portfolio into a unified and seamless customer experience.We plan tocontinually expand and optimize our data analytics platform to improve th

77、e identification of and manage signs of problemgambling,while also delivering entertaining gaming experiences worldwide.MarketingThe marketing efforts under the Ballys brand are primarily executed through six funnels:advertising,direct marketing,playerdevelopment,special events and promotions,entert

78、ainment and the Bally Rewards loyalty program.Our Casino Operations team plays a significant role in attracting and retaining our customers.Every customer who interacts with aprocess,such as an automated teller machine(ATM)or kiosk,or an employee is met with an attempt to garner a return visit andth

79、en,in turn,make a recommendation to family and friends.Hence“R2,”an abbreviation for“Return and Recommend,”is Ballysmarketing and casino operations mantra.The funnels are as follows:AdvertisingBallys targets its demographics throughout the nation via radio,television,billboards,print,direct mail,ema

80、il,digital and socialmedia campaigns.We seek to target the right customer at the right time with the right message to increase brand awareness anddrive business.We do modest image advertising,but more predominantly lean towards call-to-action messaging.Direct MarketingWe use direct marketing to esta

81、blish a personal relationship with customers.This form of marketing typically involves an offer anda call to action to incentivize an initial or additional casino visit or engagement with our iGaming products.Our focus on individualbehavior,rather than broad segments(which have been the traditional

82、industry approach),is designed to allow us to execute a“Precision Marketing Model.”We believe that we understand the influential attributes that attract players and,as a result,we canmarket to the point of diminishing returns while avoiding low-return spending.Player DevelopmentPlayer development is

83、 our link to our premium customers.We utilize a process under the Precision Marketing Model that isdesigned to enable our team to efficiently manage sales efforts to attract customers.We believe the potential exists to engageincreasingly more with our customers as they move throughout our brands.Spe

84、cial Events and PromotionsThis category refers to the mass public promotions that are weaved into the marketing calendar in concert with direct marketing.Our casino marketing team seeks to leverage tried-and-true promotions that attract and entertain players in an effort to retain themfor the long t

85、erm.Entertainment2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm10/162The mission to attract and retain gamers is evident in our entertainment strategy.Ballys headliner strategy is to entertain ourcustomers while recovering the cost of

86、the act through cash sales.Additional entertainment is offered at Ballys lounges and barsand designed to support our branding mission which is based on offering an engaging and entertaining experience.72025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly

87、-20241231.htm11/162Bally RewardsBally Rewards is our core loyalty program and was devised to establish consistency throughout Ballys brand.Players earn tierpoints to achieve a tier status of Pro,Star,Superstar and ultimately Legend.We are developing the connectivity of this program byour“one card”li

88、nking systems,which universally link to all Ballys Casinos&Resorts properties and our interactive businessunits.We are also planning to provide benefits outside of what is offered in our casinos and resorts to add value to the membership.Interactive Cross MarketingOur strategic approach involves cra

89、fting collaborative,cross-marketing campaigns that seamlessly integrate direct mail,on-property marketing,and VIP initiatives.These efforts aim to boost interactive sign-ups and attract interactive players to our Casinos&Resorts properties.This innovative cross-marketing strategy is currently being

90、implemented across several of our properties.CompetitionThe gaming industry is highly competitive,with numerous operators,including land-based,riverboat,and dockside casinos,videolotteries,traditional lotteries,video gaming terminals,sweepstakes,poker machines,Native American gaming,and emergingvari

91、eties of iGaming,daily fantasy sports and sports betting.In a broader sense,our gaming operations compete with variousleisure and entertainment activities such as shopping,sports events,television,movies,concerts,and travel.Legalized gaming isavailable in various forms across the US,several Canadian

92、 provinces,and lands held in trust for Native American Tribes and FirstNations.In the UK and other international markets,we face similar competitive pressures from both traditional and online gamingoperators.We face significant competition in each of the jurisdictions in which we operate,which may i

93、ntensify with new marketentrants or expansions by existing competitors.Our properties compete directly with other gaming properties in each state in whichwe operate,except for Rhode Island,as well as in adjacent states.Some competitors,especially Native American casinos,benefitfrom lower or no taxes

94、,further intensifying competition.We believe that increased legalized gaming in other jurisdictions,particularly in areas close to our existing gaming properties and the development or expansion of Native American gaming in ornear the states in which we operate,could create additional competition fo

95、r us and could adversely affect our operations or futuredevelopment projects.See“Item 1A.Risk Factors”of this Annual Report on Form 10-K for more information on competition.SeasonalityCasino,hotel and racing operations in our markets are subject to seasonal variation.Seasonal weather conditions can

96、frequentlyadversely affect transportation routes to each of our properties and may cause flooding and other effects that result in the closure ofour properties.As a result,unfavorable seasonal conditions could have a material adverse effect on our operations.Our sportsbetting business may experience

97、 seasonality based on the relative popularity of certain sports at different times of the year.Human Capital ResourcesEngaging and Investing in the CommunityThe Company believes that in order to flourish in a competitive environment and global economy,all ideas must be on the table,and an environmen

98、t that welcomes and encourages diverse perspectives leads to success in business.A driving factor of our successis ensuring that our team members are player-centric and proactive in finding ways to entertain and deliver custom experiences forour broad and diverse global players and guests.We believe

99、 that by providing our employees with competitive pay and benefits,as well as opportunities for professionaldevelopment,we can achieve our goals of attracting and retaining a creative and engaged workforce reflective of our players,guests and customers.Our professional development efforts include ro

100、bust training programs,at no cost to the employee,scholarships,and tuition reimbursement opportunities.In addition,we recently implemented a Management Development Program,which is designed to allow us to identify and promote high performing talent within our workforce.We also engage with ouremploye

101、es through a number of health and wellness programs which include,an annual wellness fair,annual flu shots,weight lossprograms,quarterly fitness challenges,employee assistance program,student loan assistance,and weekly wellness communicationsproviding helpful information on health initiatives.82025/

102、5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm12/162We also believe in the importance of giving back to our communities and have several community impact initiatives,includingfundraising events to support local organizations and community s

103、ervice events.We encourage our employees to participate inthese events and recognize their efforts and contributions in their respective communities.Labor RelationsAs of December 31,2024,we had approximately 10,000 employees.A large number of our employees at our Casinos&Resortsproperties within sev

104、eral US states are represented by a labor union and are subject to collective bargaining agreements with us.Asof December 31,2024,we had 32 collective bargaining agreements covering 3,442 employees.Our collective bargainingagreements generally have three-or-five-year terms.Environmental,Social and C

105、orporate GovernanceBallys is committed to engaging and investing in the communities in which we operate and promoting a diverse and inclusiveworkplace for our valued team members.We strive to make a positive impact and embrace our commitment to responsible gamingand business practices.Across all jur

106、isdictions where we are located,we are dedicated to building stronger communities by becoming an integral part ofthe local community by hosting fundraisers,building relationships,growing tourism,and supporting local non-profits.TheCompany made a landmark$5 million commitment over five years to the C

107、ommunity College of Rhode Island Foundation as partof a strategic workforce and economic development partnership in the State of Rhode Island.This investment has led to thedevelopment and launch of a comprehensive Table Games Dealer Training Academy at the college campus near one of our largestcasin

108、os.The programs inaugural class achieved a 100%graduation rate,with all graduates receiving job offers from Ballys;90%of those graduates remain active team members today.Building on this success,the Company has initiated two additional workforce development programs in Hospitality&Tourism,Networking

109、 Technology,IT,and Cybersecurity.The first new course,Orientation to Hospitality Management,commenced onOctober 31,2024,with additional courses planned for Spring 2025.Certificate programs in Food&Beverage,Casino Marketing,Casino Accounting,Gaming Management,and Sustainable Tourism are scheduled to

110、follow.In addition,we are committed to ensuring responsible play and guest safety.All our employees participate in training to betterequip them to identify and mitigate problem play.The Company is a member of the U.S.Responsible Online Gaming Associationand the corporate Leadership Circle for the Na

111、tional Council on Problem Gambling,adopted American Gaming AssociationsResponsible Marketing Code of Conduct and supported its annual Have a Game Plan Campaign,and received RG Checkresponsible gaming accreditation for online operations BallyC and VirginC(since rebranded toMONOPOLYCasinoUS.com).We ar

112、e also committed to supporting responsible gaming research and donated over$1 million tothe International Center of Responsible Gaming for expanded research for underage play prevention and the usage of responsiblegaming tools since 2022.Governmental Gaming RegulationGeneralThe casino and iGaming in

113、dustries are highly regulated,and we must maintain licenses and pay gaming taxes in each jurisdictionin which we operate.Our casino and iGaming businesses are subject to extensive regulation under the laws,rules and regulationsof the jurisdiction in which we operate.These laws,rules and regulations

114、generally concern the responsibility,financial stability,integrity and character of the owners,managers,officers and certain employees of our gaming operations.Violations of laws orregulations in one jurisdiction could result in disciplinary action in that and other jurisdictions.Some jurisdictions,

115、including those in which we are licensed,empower their regulators to investigate participation by licensees ingaming outside their jurisdiction and require access to periodic reports reflecting those gaming activities.Pursuant to the gaming laws in the jurisdictions where we have operations,and unde

116、r our organizational documents,certain of oursecurities are subject to restrictions on ownership which may be imposed by specified governmental authorities.These restrictionsmay require a holder of our securities to dispose of the securities,or,if the holder refuses or is unable to dispose of the se

117、curities,we may be required to repurchase the securities.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm13/162For a more detailed description of regulations to which we are subject,see Exhibit 99.1,to this Annual Report on Form 10-K,whi

118、ch is incorporated herein by reference.92025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm14/162Our Regulatory AgreementWe are party to an Amended and Restated Regulatory Agreement(the“Regulatory Agreement”),with the Rhode Island Departmen

119、tof Business Regulation(“DBR”)and the State Lottery Division of the Rhode Island Department of Revenue(“DoL”).TheRegulatory Agreement contains financial and other covenants that,among other things,(i)restrict the acquisition of stock and otherfinancial interests in us,(ii)relate to the licensing and

120、 composition of members of our management and Board of Directors(the“Board”),(iii)prohibit certain competitive activities and related-party transactions and(iv)restrict our ability to declare or makerestricted payments(including dividends),incur additional indebtedness or take certain other actions,

121、if our leverage ratio exceeds5.50 to 1.00(in general being gross debt divided by Adjusted EBITDA,each as defined in the Regulatory Agreement).The Regulatory Agreement also provides affirmative obligations,including setting a minimum number of employees that we mustemploy in Rhode Island and providin

122、g the DBR and DoL with periodic information updates about us.Among other things,theRegulatory Agreement prohibits us and our subsidiaries from owning,operating,managing or providing gaming specific goods andservices to any properties in Rhode Island(other than Ballys Twin River and Ballys Tiverton),

123、Massachusetts,Connecticut orNew Hampshire.A failure to comply with the Regulatory Agreement could subject us to injunctive and monetary relief,andultimately the revocation or suspension of our licenses to operate in Rhode Island.The DoL also has regulatory authority over Ballys under our VLT master

124、contracts with the DoL.Our master contracts with RhodeIsland extended through June 30,2043,and allow for consolidation of promotional points between Ballys Twin River and BallysTiverton,obligate Ballys Twin River to build a 50,000 square foot expansion,obligate Ballys to lease at least 20,000 square

125、 feetof commercial space in Providence,and commit us to invest$100 million in Rhode Island over the term,including an expansionand the addition of new amenities at Ballys Twin River.As a licensed Technology Provider since July 1,2021,Ballys Twin Riveris entitled to an additional share of net termina

126、l income on Video Lottery Terminals(“VLTs”)which they owned or leased.June2021 legislation in Rhode Island also authorized a joint venture between Ballys and IGT Global Solutions Corporation(“IGT”)tobecome a licensed technology provider and supply the State of Rhode Island with all VLTs at both Ball

127、ys Twin River and BallysTiverton for a 20.5-year period starting January 1,2023.The joint venture was organized as the Rhode Island VLT Company,LLC,with IGT owning 60%of the membership interests and Ballys or its affiliates owning 40%of the membership interests(“RI JointVenture”).On December 30,2022

128、,Ballys Twin River and Ballys Tiverton purchased additional machines directly from IGT toeffectively own 40%of the machines.On January 1,2023,Ballys Twin River and Ballys Tiverton contributed all of theirmachines to the RI Joint Venture in return for an aggregate 40%membership interest,and IGT contr

129、ibuted all of their machines atBallys Twin River and Ballys Tiverton to the RI Joint Venture in return for a 60%membership interest.Other Laws and RegulationsOur businesses are subject to various laws and regulations in addition to gaming regulations.These laws and regulations includerestrictions an

130、d conditions concerning alcoholic beverages,food service,smoking,environmental matters,employees andemployment practices,currency transactions,taxation,zoning and building codes,marketing and advertising and data privacy.Such laws and regulations could change or could be interpreted differently in t

131、he future,or new laws and regulations could beenacted.Material changes to any of the laws,rules,regulations.or ordinances to which we are subject,new laws or regulations ormaterial differences in interpretations by courts or governmental authorities could adversely affect our operating results.The s

132、ale of alcoholic beverages is subject to licensing,control,and regulation by applicable local regulatory agencies.All licensesare revocable and are not transferable.The agencies involved have full power to limit,condition,suspend or revoke any license,and any disciplinary action could,and revocation

133、 would,have a material adverse effect upon our operations.Intellectual PropertyWe develop intellectual property to differentiate our retail casinos and interactive products from our competitors.Our brands andtechnology constitute key business assets.In order to protect our brands,technology and othe

134、r creative output,we rely on acombination of trademarks,copyright,patents,trade secrets and contract law to establish and protect our proprietary rights.102025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm15/162Our core brand in the United

135、 States is Ballys and Bally.We use“Ballys”in connection with a majority of our land-basedproperties.We use variations of“Bally”in connection with our interactive products,including Bally Bet,Bally Live and BallyPlay.The Ballys and Bally brand is protected by approximately 170 trademark registrations

136、 and applications in the U.S.andforeign jurisdictions.In line with our multi-brand strategy,we register trademarks for brands either directly exploited by us in theprovision of gaming services or for the purpose of licensing to third parties.Following the sale of the Carved-Out Business in thefourth

137、 quarter of 2024,our in-house brands in foreign jurisdictions include Jackpotjoy,Botemania,Vera&John(in Sweden only)and Bally Casino.We also operate interactive sites under brand license agreements with third parties,including the Virgin,Rainbow Riches,Double Bubble Bingo and Monopoly brands.In addi

138、tion,we hold an exclusive trademark license for Hard Rockin relation to our Hard Rock Biloxi casino.The Hard Rock license expires in 2027 with an option to renew for two successive ten-year terms.We create original software code and designs for our interactive gaming and betting services.Our softwar

139、e code is primarilyprotected by copyright and,to a lesser extent,patents.Although our business is not dependent on any one of our patents orcombination of our patents,we file patent applications where we believe it is appropriate to do so.We also license in patentedtechnology where required for the

140、operation of our business.We protect our trade secrets and confidential information bynondisclosure agreements and confidentiality clauses.While we take action to protect our intellectual property rights,there is always a risk that(i)our proprietary rights becomeinvalidated or unenforceable,(ii)we a

141、re unsuccessful in obtaining trademark or patent registrations and(iii)we are unsuccessful inour enforcement efforts and therefore unable to prevent what we consider to be misuse of our intellectual property assets.The lawsof some foreign countries do not protect intellectual property rights to the

142、same extent as the laws of the United States.Further,third parties may independently develop similar brands and technologies which would negatively impact the value of ourintellectual property.Corporate InformationWe were incorporated in Delaware on March 1,2004.Our principal executive offices are l

143、ocated at 100 Westminster Street,Providence,Rhode Island 02903,and our telephone number is(401)475-8474.Our website address is www.B.Theinformation that is contained in,or that is accessible through,our website is not part of this filing.Available InformationWe are required to file annual,quarterly

144、and current reports,proxy statements and other information with the Securities andExchange Commission(the“SEC”).These filings are available on the SECs website at www.sec.gov.We also make our AnnualReports on Form 10-K,our Quarterly Reports on Form 10-Q,our Current Reports on Form 8-K and all amendm

145、ents to thesereports available free of charge through our corporate website as soon as reasonably practicable after such reports are filed with,orfurnished to,the SEC.In addition,our Code of Business Conduct,Corporate Governance Guidelines and charters of the AuditCommittee,the Compensation Committe

146、e and the Nominating and Governance Committee are available on our website,www.B.The information that is contained in,or that is accessed through,our website is not part of this filing.112025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm16

147、/162ITEM 1A.RISK FACTORSIn addition to the other information contained in this Annual Report on Form 10-K,the following risk factors should be consideredcarefully in evaluating our business.If any of the following risks actually occur,our business,financial condition and results ofoperations could b

148、e adversely affected.If this were to happen,the value of our securities,including our common stock,coulddecline significantly,and investors could lose all or part of their investment.Risk Factor SummaryOur business is subject to a number of risks and uncertainties,including those highlighted in this

149、 item in this Annual Report onForm 10-K.Some of these principal risks include the following:General Economic ConditionsOur business is particularly sensitive to reductions in discretionary consumer spending.CompetitionThe gaming industry,including retail casinos and iGaming,is very competitive and i

150、ncreased competition,includingthrough legislative legalization or expansion of gaming by states in or near where we own facilities or through NativeAmerican gaming facilities,could adversely affect our financial results.Compliance,Regulatory and Legal RisksWe are subject to extensive laws,regulation

151、 and licensing,and gaming authorities have significant control over ouroperations,which could have an adverse effect on our business.Failure to comply with the terms of the Regulatory Agreement could result in a breach and could harm our business.We are subject to extensive environmental regulation,

152、which creates uncertainty regarding future environmentalexpenditures and liabilities.We or certain third parties that we rely on may fail to establish and maintain effective and compliant antimoneylaundering,counter terrorism financing,safer gambling,fraud detection,risk management and other regulat

153、ory policies,procedures and controls.Our business is subject to a variety of US and foreign laws,many of which are unsettled and still developing,and whichcould subject us to claims or otherwise harm our business across jurisdictions which could have a material adverse effecton our financial conditi

154、on and results of operations.Our growth prospects depend on the legal status of real money gaming in various jurisdictions and legalization may notoccur in as many jurisdictions as we expect or may occur at a slower pace than we anticipate which could adversely affectour future results of operations

155、.Business Operational RisksWe are reliant on effective payment processing services from a limited number of providers in each of the markets inwhich we operate.Our profitability will be dependent,in part,on return to players.We extend credit to a portion of our customers,and we may not be able to co

156、llect gaming receivables from our creditcustomers.Declining popularity of games and changes in device preferences of players could have a negative effect on our business.The casino,hotel and hospitality industry is capital intensive and we may not be able to finance development,expansionand renovati

157、on projects,which could put us at a competitive disadvantage.We may invest in or acquire other businesses,and our business may suffer if we are unable to successfully integrateacquired businesses into our company or otherwise manage the growth associated with multiple acquisitions.We face risks asso

158、ciated with growth and acquisitions.Our management identified material weaknesses in our internal control over financial reporting which could,if notremediated,result in material misstatements in our consolidated financial statements.Our results of operations and financial condition could be adverse

159、ly affected by the occurrence of natural disasters,suchas hurricanes,or other catastrophic events,including war,terrorism and public health crises such as the COVID-19pandemic.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm17/162122025/

160、5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm18/162Cybersecurity,Data Privacy and Technology RisksWe rely on information technology,Internet infrastructure and other systems and platforms,and any failures,errors,defects or disruptions in o

161、ur systems or platforms could diminish our brand and reputation,subject us to liability,disruptour business,affect our ability to scale our technical infrastructure and adversely affect our operating results and growthprospects.Our business may be harmed by cybersecurity and data privacy incidents.F

162、inancing RisksOur debt agreements,the Regulatory Agreement and other future indebtedness contain or may contain restrictivecovenants that may limit our operating flexibility.Servicing our indebtedness and funding our other obligations requires a significant amount of cash,and our ability togenerate

163、sufficient cash depends on many factors,some of which will be beyond our control.Risks Related to our Common StockThe market price of our common stock could fluctuate significantly.Our largest shareholder owns a meaningful percentage of our outstanding common stock,which could limit the ability ofot

164、her shareholders to influence corporate matters.We are not paying dividends and any decision to do so in the future will be at the discretion of our Board.General Economic ConditionsOur business is particularly sensitive to reductions in discretionary consumer spending.Our business is particularly s

165、ensitive to reductions from time to time in discretionary consumer spending.Demand forentertainment and leisure activities,including gaming,can be affected by changes in the economy and consumer tastes,both ofwhich are difficult to predict and beyond our control.Unfavorable changes in general econom

166、ic conditions,including recessions,economic slowdowns,sustained high levels of unemployment and rising prices or the perception by consumers of weak orweakening economic conditions,may reduce our users disposable income or result in fewer individuals engaging in entertainmentand leisure activities,s

167、uch as visiting casinos and casino hotel properties,F2P,sports betting,iCasino and online bingo.A period ofsustained inflation,particularly in the US and UK,could materially impact our business.The effects of inflation on discretionaryconsumer spending could result in the reduction of the demand for

168、 entertainment and leisure activities.Moreover,we rely on thestrength of regional and local economies in the US for the performance of each of our properties.As a result,we cannot ensure thatdemand for our offerings will remain constant.Adverse developments affecting economies throughout the world i

169、ncluding ageneral tightening of the availability of credit,increasing energy costs,rising prices,inflation,acts of war or terrorism,naturaldisasters,declining consumer confidence,significant declines in the stock market or epidemics,pandemics or other health-relatedevents or widespread illnesses,lik

170、e the COVID-19 pandemic,could lead to a reduction in visitors to our properties,including thosethat stay in our hotels,or discretionary spending by our customers on entertainment and leisure activities,which could adverselyaffect our business,financial condition and results of operations.Competition

171、The gaming industry,including retail casinos and iGaming,is very competitive and increased competition,including throughlegislative legalization or expansion of gaming by states in or near where we own facilities or through Native American gamingfacilities,could adversely affect our financial result

172、s.We face significant competition in all areas in which we conduct our business.Increased competitive pressures may adverselyaffect our ability to continue to attract customers or affect our ability to compete efficiently.Several of our casinos and resorts are in jurisdictions that restrict gaming t

173、o certain areas and/or may be affected by state laws thatcurrently prohibit or restrict gaming operations.We also face the risk that existing casino licensees will expand their operations andthe risk that Native American gaming will continue to grow.Budgetary and other political pressures faced by s

174、tate governmentscould lead to intensified efforts directed at the legalization of gaming in jurisdictions where it is currently prohibited.Thelegalization of gaming in such jurisdictions could be an expansion opportunity for our business,or create competitive pressures,depending on where the legaliz

175、ation occurs and our ability to capitalize on it.Our ability to attract customers to the existing casinoswhich we own could be significantly and adversely affected by the legalization or expansion of gaming in certain jurisdictions andby the development or expansion of Native American casinos in are

176、as where our customers may visit.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm19/162132025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm20/162In addition,our competitors may

177、 refurbish,rebrand,or expand their casino offerings,which could result in increased competition.Furthermore,changes in ownership may result in improved quality of our competitors facilities,which may make such facilitiesmore competitive.Certain of our competitors are large gaming companies with grea

178、ter name recognition,marketing efforts andfinancial resources.In some instances,particularly in the case of Native American casinos,our competitors pay lower taxes or notaxes.These factors create additional challenges for us in competing for customers and accessing cash flow or financing to fundimpr

179、ovements for our casino and entertainment products that enable us to remain competitive.We also compete with other forms of legalized gaming and entertainment such as bingo,pull-tab games,card parlors,sportsbooks,pari-mutuel or simulcast betting on horse and dog racing,state-sponsored lotteries,inst

180、ant racing machines,VLTs(includingracetracks that offer VLTs)and video poker terminals and,in the future,we may compete with gaming or entertainment at othervenues.Further competition from online lotteries and other online wagering gaming services,which allow their customers to wageron a wide variet

181、y of sporting events and play Las Vegas-style casino games from home,could divert customers from the facilitieswe own and thus adversely affect our business.Such online wagering services are likely to expand in future years and becomemore accessible to domestic gamblers as a result of US Department

182、of Justice positions related to the application of federal laws tointrastate online gaming and initiatives in some states to consider legislation to legalize intrastate online wagering.The law in thisarea has been rapidly evolving,and additional legislative developments may occur at the federal and

183、state levels that wouldaccelerate the proliferation of certain forms of online gaming in the US.We may also face competition from other gaming facilities which are able to offer sports wagering services(including mobilesports wagering)following the enactment of applicable legislation.Numerous states

184、 that border the states in which we operate havepending or proposed legislation which would allow for sports betting,each of which could have an adverse effect on our financialresults.The online gambling industry is highly competitive and we expect more competitors to enter the sector.With several t

185、housandonline gambling sites accessible to potential customers around the world with little product differentiation,there is arguably anexcess of suppliers.Online and offline advertising is widespread,with operators competing for affiliates and customers who areattracted by sign-up bonuses and other

186、 incentives.Existing and new competitors may also increase marketing spending,including to unprofitable levels,in an attempt to distort theonline gambling market to build market share quickly.Some of our competitors have or will have significantly greater financial,technical,marketing and sales reso

187、urces and may be able to respond more quickly to changes in customer needs.Additionally,these competitors may be able to devote a greater number of resources to the enhancement,promotion and sale of their games andgaming systems.Our future success is or will be dependent upon our ability to retain o

188、ur current customers and to acquire newcustomers.Failure to do so could result in a material adverse effect on our business,financial condition and results of operations.Compliance,Regulatory and Legal RisksWe are subject to extensive laws,regulation and licensing,and gaming authorities have signifi

189、cant control over our operations,which could have an adverse effect on our business.Our ownership and operation of casino gaming,horse racing facilities,sports betting,VLTs and online offerings are subject toextensive regulation,and regulatory authorities have broad powers with respect to the licens

190、ing of these businesses,and mayrevoke,suspend,condition,fail to renew or limit our gaming or other licenses,impose substantial fines and take other actions,eachof which poses a significant risk to our business,results of operations and financial condition.We currently hold all licenses andrelated ap

191、provals necessary to conduct our present operations but must periodically apply to renew many of these licenses andregistrations and have the suitability of certain of our directors,officers and employees renewed.There can be no assurance that wewill be able to obtain such renewals or that we will b

192、e able to obtain future approvals that would allow us to expand our gamingoperations.Any failure to maintain or renew existing licenses,registrations,permits or approvals would have a material adverseeffect on us.As we expand our gaming operations in our existing jurisdictions or to new areas,we may

193、 have to meet additionalsuitability requirements and obtain additional licenses,registrations,permits and approvals from gaming authorities in thesejurisdictions.The approval process can be time-consuming and costly and we cannot be sure that we will be successful.In addition,the loss of a license i

194、n one jurisdiction could trigger the loss of a license or affect our eligibility for a license in another jurisdiction.Furthermore,if additional gaming laws or regulations are adopted in jurisdictions where we operate,these regulations could imposeadditional restrictions or costs that could have a s

195、ignificant adverse effect on us.142025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm21/162Gaming authorities can generally require that any beneficial owner of our securities file an application for a finding of suitability.Ifa gaming auth

196、ority requires a record or beneficial owner of our securities to file a suitability application,the owner must generallyapply for a finding of suitability within 30 days or at an earlier time prescribed by the gaming authority.The gaming authority hasthe power to investigate such an owners suitabili

197、ty and the owner must pay all costs of the investigation.If the owner is foundunsuitable,then the owner may be required by law to dispose of our securities.Our officers,directors and key employees are also subject to a variety of regulatory requirements and various licensing and relatedapproval proc

198、edures in the various jurisdictions in which we operate.If any applicable gaming authority were to find any of ourofficers,directors or key employees unsuitable for licensing or unsuitable to continue having a relationship with us,we would haveto sever all relationships with that person.Furthermore,

199、the applicable gaming authority may require us to terminate theemployment of any person who refuses to file appropriate applications.Either result could adversely affect our gaming operations.Applicable gaming laws and regulations may restrict our ability to issue certain securities,incur debt and u

200、ndertake other financingactivities.Such transactions would generally require notice and/or approval of applicable gaming authorities,and our financingcounterparties,including lenders,might be subject to various licensing and related approval procedures in the various jurisdictionsin which we conduct

201、 gaming operations.Applicable gaming laws further limit our ability to engage in certain competitive activitiesand impose requirements relating to the composition of our Board and senior management personnel.If gaming regulatoryauthorities were to find any person unsuitable with regard to their rela

202、tionship to us or any of our subsidiaries,we would berequired to sever our relationship with that person,which could materially adversely affect our business.We are subject to numerous laws that may expose us to liabilities or have a significant adverse impact on our operations.Changes to any such l

203、aws could have a material adverse effect on our operations and financial condition.Our business is subject to a variety of laws,rules,regulations,and ordinances.These laws and regulations include,but are notlimited to,restrictions and conditions concerning alcoholic beverages,environmental matters,e

204、mployees,currency transactions,taxation,anti-money laundering measures,vulnerable customer protections,data privacy,zoning and building codes and marketingand advertising and game design.Such laws and regulations could change or could be interpreted differently in the future,or newlaws and regulatio

205、ns could be enacted.Material changes to any of the laws,rules,regulations or ordinances to which we aresubject,new laws or regulations or material differences in interpretations by courts or governmental authorities could have anadverse effect on our business,financial condition and results of opera

206、tions.Many of our employees,especially those that interact with our customers,receive a base salary or wage that is established byapplicable laws that establish a minimum hourly wage that is,in turn,supplemented through tips and gratuities from customers.From time to time,lawmakers have increased th

207、e minimum wage.It is difficult to predict when such increases may take place.Anysuch change to the minimum wage could have a material adverse effect on our business,financial condition and results ofoperations.The sale of alcoholic beverages is a highly regulated and taxed business.In the US,federal

208、,state and local laws and regulationsgovern the production and distribution of alcoholic beverages,including permitting,licensing,trade practices,labeling,advertising,marketing,distributor relationships and related matters.Federal,state and local governmental entities also levy various taxes,license

209、 fees and other similar charges and may require bonds to ensure compliance with applicable laws and regulations.Failure tocomply with applicable federal,state or local laws and regulations could result in higher taxes,penalties,fees and suspension orrevocation of permits,licenses or approvals and co

210、uld have a material adverse effect on our business,financial condition andresults of operations.From time to time,local and state lawmakers,as well as special interest groups,have proposed legislation thatwould increase the federal and/or state excise tax on alcoholic beverages or certain types of a

211、lcoholic beverages.If federal or stateexcise taxes are increased,we may have to raise prices to maintain our current profit margins.Higher taxes may reduce overalldemand for alcoholic beverages,thus negatively impacting sales of our alcoholic beverages at our properties.Further federal orstate regul

212、ation may be forthcoming that could further restrict the distribution and sale of alcohol products.Any material increasesin taxes or fees or the adoption of additional taxes,fees or regulations could have a material adverse effect on our business,financial condition and results of operations.Legisla

213、tion in various forms to ban or substantially curtail indoor tobacco smoking in public places have been enacted orintroduced in many jurisdictions,including some of the jurisdictions in which we operate.We believe these smoking restrictionscan significantly impact business volumes.If additional smok

214、ing restrictions are enacted within jurisdictions where we operate orseek to do business,our financial condition,results of operations and cash flows could be adversely affected.In addition,each restaurant we operate must obtain a food service license from local authorities.Failure to comply with su

215、chregulations could cause our licenses to be revoked or our related restaurant business or businesses to be forced to cease operations.Moreover,state liquor laws may prevent the expansion of restaurant operations into certain markets.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data

216、/1747079/000174707925000039/baly-20241231.htm22/162152025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm23/162Failure to comply with the terms of the Regulatory Agreement could result in a breach and could harm our business.We are currently

217、 a party to the Regulatory Agreement with Rhode Island regulatory agencies.The Regulatory Agreement imposescertain affirmative and negative covenants on us.For more detail on the Regulatory Agreement see the section entitled“Governmental Gaming Regulation”in“Item I.Business”of this Annual Report on

218、Form 10-K.A failure to comply with theprovisions in the Regulatory Agreement could subject us to injunctive or monetary relief,payments to the Rhode Island regulatoryagencies and ultimately the revocation or suspension of our licenses to operate in Rhode Island.Any such remedy could adverselyaffect

219、our business,financial condition and results of operations.Among other things,the Regulatory Agreement prohibits us andour subsidiaries from owning,operating,managing or providing gaming specific goods and services to any gaming facilities inRhode Island(other than Ballys Twin River and Ballys Tiver

220、ton),Massachusetts,Connecticut or New Hampshire,which mayadversely affect our growth and market opportunity in those states.We are subject to extensive environmental regulation,which creates uncertainty regarding future environmental expendituresand liabilities.We are subject to various environmenta

221、l laws and regulations that govern activities that may have adverse environmental effects,such as discharges to air and water,as well as the management and disposal of solid,animal and hazardous wastes and exposure tohazardous materials.These laws and regulations,which are complex and subject to cha

222、nge,include US Environmental ProtectionAgency regulations.In addition,our horse racing facility in Colorado is subject to state laws and regulations that address theimpacts of manure and wastewater generated by concentrated animal feeding operations(“CAFO”)on water quality,includingstorm water disch

223、arges.CAFO regulations include permit requirements and water quality discharge standards.Enforcement ofCAFO regulations has been receiving increased governmental attention.Compliance with these and other environmental laws can,in some circumstances,require significant capital expenditures.For exampl

224、e,we may incur future costs under existing and newlaws and regulations pertaining to storm water and wastewater management at our racetracks.Moreover,violations can result insignificant penalties and,in some instances,interruption or cessation of operations.We are also subject to laws and regulation

225、s that create liability and cleanup responsibility for releases of regulated materials intothe environment.Certain of these laws and regulations impose strict,and under certain circumstances joint and several,liability onthe current or previous owner or operator of property for the costs of remediat

226、ing regulated materials on or emanating from ourproperty.The costs of investigation,remediation or removal of those substances may be substantial.The presence of,or failure toremediate properly,such materials may adversely affect the ability to sell or rent such property or to borrow funds using suc

227、hproperty as collateral.Additionally,as an owner or manager of real property,we could be subject to claims by third parties based ondamages and costs resulting from environmental contamination at or emanating from third-party sites.These laws typically imposeclean-up responsibility and liability wit

228、hout regard to whether the owner or manager knew of or caused the presence of thecontaminants and the liability under those laws has been interpreted to be joint and several unless the harm is divisible and there isa reasonable basis for allocation of the responsibility.In addition,environmental req

229、uirements address the impacts of developmenton wetlands.The possibility exists that contamination,as yet unknown,may exist on our properties.There can be no assurance that we will notincur expenditures for environmental investigations or remediation in the future.We are or may become involved in leg

230、al proceedings that,if adversely adjudicated or settled,could impact our business andfinancial condition.From time to time,we are named in lawsuits or other legal proceedings relating to our businesses.In particular,the nature of ourbusiness subjects us to the risk of lawsuits filed by customers,pas

231、t and present employees,shareholders,competitors,businesspartners and others in the ordinary course of business.As with all legal proceedings,no assurances can be given as to the outcomeof these matters.Moreover,legal proceedings can be expensive and time consuming,and we may not be successful in de

232、fending orprosecuting these lawsuits,which could result in settlements or damages that could adversely affect our business,financialcondition and results of operations.162025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm24/162We or certain

233、 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.We handle significant amounts of cash in our operati

234、ons and are subject to various reporting and AML laws and regulations.Recently,US governmental authorities and the British gambling regulator,the Great Britain Gambling Commission(the“GBGC”),have evidenced an increased focus on compliance with AML laws and regulations in the gaming industry.Any viol

235、ation of AMLlaws or regulations could have a material adverse effect on our business,financial condition and results of operations.Internalcontrol policies and procedures and employee training and compliance programs that we have implemented to deter prohibitedpractices may not be effective in prohi

236、biting our customers,employees,contractors or agents from violating or circumventing ourpolicies and the law.If we or our employees or agents fail to comply with applicable laws or our policies governing our operations,we may face investigations,prosecutions and other legal proceedings and actions w

237、hich could result in civil penalties,administrative remedies and criminal sanctions.Any such government investigations,prosecutions or other legal proceedings oractions could have a material adverse effect on our business,financial condition and results of operations.The regulatory framework which g

238、overns our business,and its interpretation,may be subject to change which we may fail toanticipate and/or respond to.Online and land-based gambling operators licensed in the UK and other jurisdictions are obliged to establish and maintaincompliant AML,anti-terrorism,safer gambling,fraud detection,ri

239、sk management and other regulatory policies,procedures andcontrols to mitigate and effectively manage these risks.In the event that they fail to do so,they may be subject to enforcementaction by gambling regulators or other governmental agencies or private action by affected third parties.In the eve

240、nt of a breach,arange of sanctions may be imposed,including financial penalties or regulatory settlements,public warnings,the imposition ofspecial operating conditions or license conditions and the suspension or revocation of gambling licenses.In addition,there is a risk that increased AML regulator

241、y and safer gambling measures in the UK will prove to be challenging forus.If we are required to conduct t new financial risk checks on our highest value customers,some may be unwilling to provide theadditional information and/or documentation required by us in the UK to ascertain their sources of w

242、ealth,the affordability of theirleisure spending with us or their risk of gambling related harm or vulnerability,and to continue to verify such information.We hold licenses issued by the GBGC.The holders of such licenses are bound to meet stringent compliance requirements relatingto matters such as

243、AML,safer gambling,data protection,advertising and consumer rights issues.Compliance with suchrequirements is incorporated into the relevant licenses as a licensing condition(or similar)with a corresponding requirement for usto comply with various requirements.In September 2022,the GBGC began the im

244、plementation of updated social responsibilitylicensing conditions.All licensees must now have in place effective systems and processes to monitor customer activity to identifyharm or potential harm associated with gambling,from the point when an account is opened.The indicators licensees must use to

245、identify harm or potential harm associated with gambling include customer spend,patterns of spend,time spent gambling,gambling behavior indicators,customer-led contact,use of gambling management tools and account indicators.These requirementsmay significantly impact our business if we are unable to

246、establish the affordability of customers on the basis of available evidenceand/or because customers are unwilling to provide the information requested.The failure by any third-party providers or any relevant entity within the Company to establish and maintain effective andcompliant AML,counter terro

247、rism,anti-bribery,fraud detection,regulatory compliance and risk management processes may have amaterial adverse effect on our business,financial condition and results of operations.In carrying out its functions,the GBGC is under a statutory duty to ensure that license holders are operating their bu

248、sinesses inways that are reasonably consistent with the licensing objectives set out in the Gambling Act 2005(currently the primarylegislation governing the licensing and regulation of gambling in Great Britain)(the“Gambling Act”),which are:(1)preventinggambling from being a source of(or associated

249、with)crime or disorder,or being used to support crime;(2)ensuring that gamblingis conducted in a fair and open way;and(3)protecting children and other vulnerable people from being harmed or exploited bygambling.While the objectives of regulation may remain largely stable,the methods that operators a

250、re required to employ to meet thoseobjectives,and the interpretation of those objections by the regulator,are in a state of constant evolution and development.Wemust respond adequately to the challenges this presents.If we are found to be in breach of our obligation to comply with suchlicensing requ

251、irements,then the GBGC may impose a financial penalty on us or impose other sanctions,including removing orimposing conditions on the relevant gambling licenses.Such action could have a material adverse effect on our financialperformance.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/

252、data/1747079/000174707925000039/baly-20241231.htm25/162172025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm26/162New legislation governing the online gaming industry may be introduced in the UK which limits or restricts our operatingmodel

253、in that market.In December 2020,the UK government commenced a review of the Gambling Act.As a result of this review,in April 2023 the UKgovernment issued proposals to amend the Gambling Act,and these proposals are subject to a series of public consultations.TheUK government proposals are structured

254、around six main themes:(1)online player protections regarding players and products;(2)marketing and advertising;(3)the powers of the GBGC;(4)dispute resolution and consumer redress;(5)children and youngadults;and(6)land-based gambling.There is a risk that the introduction of more stringent,safer gam

255、bling and/or AML regulatorymeasures in the UK may prove operationally onerous for us.Moreover,the potential for the introduction of stake,speed and prizelimits and the introduction of deposit,loss and spend limits may operate to impact our financial performance and reduce the long-term growth opport

256、unities for us in the UK.Our business is subject to a variety of US and foreign laws,many of which are unsettled and still developing,and which couldsubject us to claims or otherwise harm our business across jurisdictions.Any change in existing regulations or theirinterpretation,or the regulatory or

257、 prosecutorial climate applicable to our products and services,or changes in tax rules andregulations or interpretation thereof related to our products and services,could adversely impact our ability to operate ourbusiness as currently conducted or as we seek to operate in the future,which could hav

258、e a material adverse effect on ourfinancial condition and results of operations.We are generally subject to laws and regulations relating to iGaming in the jurisdictions in which we conduct business,as well asthe general laws and regulations that apply to all e-commerce businesses,such as those rela

259、ted to privacy and personal information,tax and consumer protection.These laws and regulations vary by jurisdiction,and future legislative and regulatory action,courtdecisions or other governmental action,which may be affected by,among other things,political pressures,attitudes and climates,as well

260、as personal biases,may have a material impact on our operations and financial results.Some jurisdictions have introducedregulations attempting to restrict or prohibit online gaming,while others have taken the position that online gaming should belicensed and regulated and have adopted or are in the

261、process of considering legislation and regulations to enable that to happen.The regulatory environment in any particular jurisdiction may change in the future and any such change could have a materialadverse effect on our results of operations.Future legislative and regulatory action,and court decis

262、ions or other governmental action,may have a material impact on ouroperations and financial results.Governmental authorities could view us as having violated local laws,despite our efforts to obtainall applicable licenses or approvals.There is also risk that civil and criminal proceedings,including

263、class actions brought by or onbehalf of prosecutors or public entities or incumbent monopoly providers,or private individuals,could be initiated against us,Internet service providers,credit card and other payment processors in the iGaming industry.Such potential proceedings couldinvolve substantial

264、litigation expense,penalties,fines,seizure of assets,injunctions or other restrictions being imposed upon ourlicensees or other business partners,while diverting the attention of key executives.Such proceedings could have a materialadverse effect on our business,financial condition and results of op

265、erations,as well as impact our reputation.Our growth prospects depend on the legal status of real money gaming in various jurisdictions and legalization may not occurin as many jurisdictions as we expect,or may occur at a slower pace than we anticipate.Additionally,even if jurisdictionslegalize real

266、 money gaming,this may be accompanied by legislative or regulatory restrictions and/or taxes that make itimpracticable or less attractive to operate in those jurisdictions,or the process of implementing regulations or securing thenecessary licenses to operate in a particular jurisdiction may take lo

267、nger than we anticipate,which could adversely affect ourfuture results of operations and make it more difficult to meet our expectations for financial performance.Several jurisdictions have legalized or are currently evaluating the legalization of real money gaming,and our business,financialconditio

268、n,results of operations and business prospects are significantly dependent upon the status of legalization in thesejurisdictions.Our business plan is partially based upon the legalization of real money gaming in additional jurisdictions and thelegalization may not occur as anticipated.Additionally,i

269、f a large number of additional jurisdictions enact real money gaminglegislation and we are unable to obtain,or are otherwise delayed in obtaining,the necessary licenses to operate iGaming websitesin jurisdictions where such games are legalized,our future growth in iGaming could be materially impaire

270、d.As we enter new jurisdictions,governments may legalize real money gaming in a manner that is unfavorable to us.As a result,wemay encounter legal,regulatory and political challenges that are difficult or impossible to foresee and which could result in anunforeseen adverse impact on planned revenues

271、 or costs associated with the new opportunity.Jurisdictions also impose substantialtax rates on iGaming revenue.Tax rates,whether federal-or state-based,that are higher than we expect will make it more costlyand less desirable for us to launch in a given jurisdiction,while tax increases in any of ou

272、r existing jurisdictions may adverselyimpact profitability.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm27/162182025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm28/162There

273、fore,even in cases in which a jurisdiction purports to license and regulate iGaming,the licensing and regulatory regimes canvary considerably in terms of business-friendliness,and at times may be intended to provide incumbent operators with advantagesover new licensees.Therefore,some“liberalized”reg

274、ulatory regimes are considerably more economically viable than others.We derive meaningful revenues from players located in jurisdictions in which we do not hold a license.In certain jurisdictions,online gambling is either not regulated at all,is subject to very limited regulation or its legality is

275、 unclear.These jurisdictions are commonly referred to in the gaming industry as“unregulated jurisdictions.”Certain of our products aremade available to players in unregulated jurisdictions,on either a B2B or B2C basis.The relevant transactions in such unregulatedjurisdictions and the associated play

276、er relationships that underpin them are generally regulated in either Malta or Gibraltar whichuse“point of supply”gambling regimes.We and our commercial partners hold point-of-supply licenses in Malta and Gibraltar.Therefore,such transactions are in fact heavily regulated but are not themselves regu

277、lated in the jurisdiction within which theplayer is ultimately located.Operators within the online gambling industry,including Ballys,have commonly taken a risk-based approach when supplyingtheir online gambling services into jurisdictions in which it is not possible to obtain a gambling license.In

278、these circumstances,online gambling operators may justify their remote supply of gambling services for a number of reasons,including a“country oforigin”basis which asserts that it is lawful to supply online gambling services remotely from a jurisdiction in which a gamblinglicense is held in another

279、jurisdiction,unless there is something within the laws of that second jurisdiction that explicitly outlawssuch provision and explicitly applies to such inward supply emanating from outside its borders.There is a risk that such jurisdictions may enact regulations relating to online real money gaming

280、and that we may be required toregister our activities or obtain licenses(or obtain further registrations or licenses,as applicable),pay taxes,royalties or fees or thatthe operation of online gambling businesses in such jurisdictions may be prohibited entirely.The implementation of additionallicensin

281、g or regulatory requirements,prohibitions or payments in such jurisdictions could have an adverse effect on the viability ofour revenue,operations,business or financial performance.Where we or our partners fail to obtain the necessary registrations orlicenses,make the necessary payments or operate i

282、n a jurisdiction where online gambling is deemed to be or becomes prohibited,we or our partners may be subject to investigation,penalties or sanctions or forced to discontinue operations entirely in relation tothat jurisdiction.Any such actions may also have an adverse impact on the way our regulato

283、rs regulate us in the jurisdictions inwhich we hold licenses.Certain of our technology providers,payment processing partners or other suppliers of content or services(collectively,“Infrastructure Services”)may cease to provide,or limit the availability of,such Infrastructure Services to the extent w

284、e deriverevenue from,or makes such Infrastructure Services available to customers in,unregulated jurisdictions.There is no assurance thatwe would be able to identify suitable or economical replacements if such Infrastructure Services become unavailable.There is also a risk that civil and criminal pr

285、oceedings,including class actions brought by or on behalf of prosecutors or publicentities,incumbent monopoly providers or private individuals,could be initiated against us or providers of our InfrastructureServices in unregulated jurisdictions.Such potential proceedings could assert that online gam

286、bling services have not been lawfullysupplied into the domestic market and could involve substantial litigation expense,penalties,fines,seizure of assets,injunctions orother restrictions being imposed on us or our business partners and may divert the attention of our key executives.If we becomesubje

287、ct to any such investigations,proceedings and/or penalties in one jurisdiction,this may lead to investigations,proceedingsand/or penalties arising in other jurisdictions in which we operate and/or hold a license.Such investigations,proceedings and/orpenalties could have a material adverse effect on

288、our business,financial condition and results of operations,as well as ourreputation.We derive meaningful revenues from players located in jurisdictions in which a license from that jurisdiction is notavailable.We are exposed to exchange rate risks.Foreign exchange risk arises when individual group e

289、ntities enter into transactions denominated in a currency other than theirfunctional currency.Our policy is,where possible,to allow our entities to settle liabilities denominated in their functional currencywith the cash generated from their own operations in that currency.Where our entities have li

290、abilities denominated in a currencyother than their functional currency(and have insufficient reserves of that currency to settle them),cash already denominated inthat currency will,where possible,be transferred from elsewhere within Ballys.Apart from these particular cash flows,we aim tofund expens

291、es and investments in the respective currency and to manage foreign exchange risk at a local level by matching thecurrency in which revenue is generated and expenses are incurred,as well as by matching the currency of our debt structure withthe currency that cash is generated in.However,no assurance

292、 can be given that these policies will deliver all,or substantially all,ofthe expected benefits.2025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm29/162192025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/0001747079

293、25000039/baly-20241231.htm30/162A vast majority of the revenues currently generated by Gamesys,our wholly owned subsidiary,are from the UK and are conductedin British Pound Sterling(“GBP”)and are therefore susceptible to any movements in exchange rates between GBP and US Dollars(“USD”).Any exchange

294、rate risk may materially adversely affect our business,financial condition and results of operations.Our substantial activities in foreign jurisdictions may be affected by factors outside of our control.A portion of our operations are conducted in non-US jurisdictions.As such,our operations may be a

295、dversely affected by changes inforeign government policies and legislation(including gambling legislation)or social instability and other factors that are notwithin our control,including renegotiation or nullification of existing contracts or licenses,changes in gambling policies,regulatory requirem

296、ents or the personnel administering them,currency fluctuations and devaluations,exchange controls,economicsanctions,tax increases,retroactive tax claims,changes in taxation policies,risk of terrorist activities,revolution,border disputes,implementation of tariffs and other trade barriers and protect

297、ionist practices,volatility of financial markets and fluctuations inforeign exchange rates,difficulties in the protection of intellectual property,labor disputes and other risks arising out of foreigngovernmental sovereignty over the areas in which operations are conducted.Our operations may also be

298、 adversely affected by lawsand policies of such foreign jurisdictions affecting foreign trade,taxation and investment.Accordingly,our activities in foreignjurisdictions could be substantially affected by factors beyond our control,any of which could have a material adverse effect on ourbusiness,fina

299、ncial condition and results of operations.In the event of a dispute arising in connection with operations in a foreign jurisdiction where we conduct business,we may besubject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions o

300、fthe courts of the US or enforcing US judgments in such other jurisdictions.We may also be hindered or prevented from enforcingtheir rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity.We may also enter into agreements and conduct activities outside of

301、 the jurisdictions in which we currently carry on business,which expansion may present challenges and risks as a result of the factors described above that we have not faced in the past,anyof which could have a material adverse effect on our business,financial condition and results of operations.Our

302、 activities are affected by the General Data Protection Regulation,as implemented in each of the UK and the EU(collectively,“GDPR”).We are required to comply with the GDPR to the extent that we either:(1)have customers located in the UK and the EU or(2)conduct the processing of personal data in the

303、UK and the EU.The impact of the GDPR is of particular relevance to our marketingactivities and information technology security systems and procedures.The GDPR and associated e-privacy laws imposeconstraints on the ability of a data controller to profile and market to customers.Data subjects have the

304、 right to object to acontroller processing their data in certain circumstances,including the right to object to their data being processed for the purposesof direct marketing.Controllers of personal data are required to maintain written records as to how they comply with the GDPRand provide more det

305、ailed information to data subjects in relation to how their data is being processed.In addition,updated e-privacy laws are under consideration in the UK and the EU to update the legislative rules applicable to digital and online dataprocessing and to align e-privacy laws to the GDPR.The GBGC has sep

306、arately introduced limitations on the use of personal databy holders of operating licenses,particularly in relation to direct marketing.The GDPR also increased the level of fines which may be imposed for a breach of data protection laws,with the maximum fine(inthe most serious cases of a breach of t

307、he GDPR)being the higher of 20 million(17.5 million for the UK)or four percent ofannual worldwide turnover.In certain instances,we could be held jointly responsible for breaches committed by the third-partyservice providers which we use or by other third parties with whom we share personal data.Many

308、 of the obligations imposed on controllers by the GDPR are expressed as high-level principles,such as the obligation to actfairly with respect to the processing of personal data.The manner in which the data regulators and courts will interpret and applythe GDPR is and will continue to evolve over ti

309、me.In addition,as a result of Brexit,the application of the GDPR in the UK and theEU will increasingly diverge,posing even greater compliance challenges for businesses operating in these jurisdictions.Theseprocedures and policies may adversely affect our business by constraining our data processing

310、activities or by increasing ouroperational and compliance costs.Additional updates to these policies and procedures and associated operational changes may berequired and costs incurred to comply with updates to e-privacy laws.If our or any third-party service providers data processing activities bre

311、ach the GDPR(or associated e-privacy laws),then wecould,whether as a result of a failure to implement adequate policies and procedures or otherwise,face significant fines and/or therevocation of existing licenses and/or the refusal of new applications for licenses,as well as claims by customers and

312、reputationaldamage.The resultant losses suffered could materially adversely affect our business,financial condition and results of operations.There can be no assurances that we would be able to recoup such losses,whether in whole or in part,from our third-party serviceproviders or insurers.2025/5/19

313、 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm31/162202025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm32/162Business Operational RisksWe will be reliant on effective payment process

314、ing services from a limited number of providers in each of the markets in whichwe operate.The provision of convenient,trusted,fast and effective payment processing services to our customers and potential customers iscritical to our business.If there is any deterioration in the quality of the payment

315、 processing services provided to these customers orany interruption to those services(including with respect to system intrusions,unauthorized access or manipulation),or if suchservices are only available at an increased cost to us or our customers or are terminated and no timely and comparable repl

316、acementservices are found,our customers and potential customers may be deterred from using our products.In addition,our inability tosecure payment processing services in markets into which we intend to expand may seriously impair our growth opportunities andstrategies.Any of these occurrences may ha

317、ve a material adverse effect on our business,financial condition and results ofoperations.Furthermore,a limited number of banks and credit card companies process online gambling related payments as a matter ofinternal policy and any capacity to accept such payments may be limited by the regulatory r

318、egime of a given jurisdiction.Theintroduction of legislation or regulations restricting financial transactions with online gambling operators,other prohibitions orrestrictions on the use of credit cards and other banking instruments for online gambling transactions may restrict our ability toaccept

319、payments from our customers.These restrictions may be imposed as a result of concerns related to fraud,paymentprocessing,AML or other issues related to the provision of online gambling services.A number of issuing banks or credit cardcompanies may from time to time reject payments to us that are att

320、empted to be made by our customers.Should such restrictionsand rejections become more prevalent,or any other restriction on payment processing be introduced,gambling activity by ourcustomers could be adversely affected,which in turn could have a material adverse effect on our business,financial cond

321、ition andresults of operations.In addition,we are subject to the risk of credit card chargebacks,which may also result in possible penalties.A chargeback is acredit card originated deposit transaction to a player account with an operator that is later reversed or repudiated.The risk of suchchargebac

322、k transactions is greater in respect of certain markets and certain payment methods.We recognize revenue upon the firstloss of the player on amounts tendered,and any credit card chargebacks are then deducted from their revenues.Even thoughsecurity measures are in place,high rates of credit card char

323、gebacks could result in credit card associations levying additional costsand fines or withdrawing their service and could have a material adverse effect on our business,financial condition and results ofoperations.Our VLTs and table games hold percentages may fluctuate.The gaming industry is charact

324、erized by an element of chance and our casino guests winnings depend on a variety of factors,someof which are beyond our control.In addition to the element of chance,hold percentages(the ratio of net win to total amountwagered)are affected by other factors,including players skill and experience,the

325、mix of games played,the financial resources ofplayers,the volume of bets placed and the amount of time played.The variability of our hold percentages has the potential toadversely affect our business,financial condition and results of operations.Our profitability will be dependent,in part,on return

326、to players.The revenue from certain of our gaming products depends on the outcome of random number generators built into the gamingsoftware running the games made available to customers.Return to player is measured by dividing the amount of real money wonby players on a particular game by the total

327、real money wagers over a particular period on that game.An increasing return to playermay negatively affect revenue as it represents a larger amount of money being won by players.Return to player is driven by theoverall random number generator outcome,the mechanics of different games and jackpot win

328、nings.Each game utilizes a randomnumber generating engine;however,generally the return to player fluctuates in the short-term based on large wins or jackpots or alarge share of wagers made for higher-payout games.To the extent we are unable to set,or fail to obtain,a favorable return toplayer in our

329、(or a third-party suppliers)gambling software which maximizes revenue,it could have a material adverse effect onour business,financial condition and results of operations.The success,including win or hold rates,of existing or future sports betting and iGaming products depends on a variety offactors

330、and is not completely controlled by us.212025/5/19 13:47baly-20241231https:/www.sec.gov/Archives/edgar/data/1747079/000174707925000039/baly-20241231.htm33/162The sports betting and iGaming industries are characterized by an element of chance.Accordingly,we employ theoretical win ratesto estimate wha

331、t a certain type of sports bet or iGame,on average,will win or lose in the long run.Net win is impacted byvariations in the hold percentages,or actual outcomes,on our iGames and sports betting we offer to our users.We use the holdpercentages as an indicator of an iGames or sports bets performance ag

332、ainst its expected outcome.Although each iGame or sportsbet generally performs within a defined statistical range of outcomes,actual outcomes may vary for any given period.In addition tothe element of chance,win rates(hold percentages)may also(depending on the game involved)be affected by the spread

333、 of limitsand factors that are beyond our control,such as a users skill,experience and behavior,the mix of games played,the financialresources of users,the volume of bets placed and the amount of time spent gambling.As a result of the variability in these factors,the actual win rates on our online iGames and sports bets may differ from the theoretical win rates we have estimated and couldresult in