Bally's Chicago Inc.
09/26/2025 | Press release | Distributed by Public on 09/26/2025 14:21
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the 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 are based on our 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 of the time of this report and we do not undertake to update or revise them as 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 results to differ materially from our expectations and assumptions include:
•various construction and development risks in connection with our Permanent Facility;
•risks associated with any delay between the closing of our temporary casino and the opening of our Permanent Facility;
•our ability to finance development, expansion and renovation projects;
•risks associated with leased properties;
•risks associated with reductions in discretionary consumer spending;
•our ability to compete with companies that are currently in, or may in the future enter, the gaming industry in which we operate;
•the substantial regulatory restrictions applicable to us, including costs of compliance;
•our reliance on effective payment processing services from a limited number of providers;
•the dependence of our profitability on return to players;
•our ability to collect gaming receivables from our credit customers;
•risks associated with any decline in the popularity of games and changes in device preferences of players;
•our ability to invest in or acquire other businesses and to successfully integrate acquired businesses into the Company or otherwise manage the growth associated with multiple acquisitions;
•risks associated with natural disasters or other catastrophic events, including war, terrorism and public health crises such as the COVID-19 pandemic;
•our ability to comply with the Host Community Agreement;
•risks associated with any failures, errors, defects or disruptions in our systems or platforms;
•risks associated with any cybersecurity incidents;
•our ability to service our indebtedness and fund our other obligations; and
•other risks identified in the section titled "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q and in other filings we make with the SEC from time to time.
The foregoing list of important factors is not exclusive and does not include matters like changes in general economic conditions that affect substantially all gaming businesses. You should not place undue reliance on our forward-looking statements.
Overview
Our Company formed on May 24, 2022 and is a majority owned subsidiary of Bally's Chicago Holding Company, LLC (the "Holding Company"), a wholly owned subsidiary of Bally's Corporation ("Bally's" or the "Parent"). We are a gaming, hospitality and entertainment company with the singular focus of building and operating a world-class entertainment destination resort in Chicago, Illinois. We provide both Chicago residents and businesses and business travelers visiting Chicago with physical and interactive entertaining and gaming experiences.
Strategy and Business Developments
We are building a destination casino, hotel and entertainment venue that showcases "The Best of Chicago" arts and culture, foot and sports, and curated dining and entertainment experiences. Our permanent casino and resort (the "Permanent Facility") in Chicago will be located on the 30-acre property which previously hosted the Chicago Tribune Publishing Center, at the intersection of Chicago Avenue and Halsted Street in downtown Chicago, and will look to transform this currently underutilized site into a major economic driver for the city. Our Permanent Facility will be in close proximity to a wide range of hotels, theaters, bars, restaurants, major shopping districts and the McCormick Place Convention Center, the proximity to which will help drive traffic to our Permanent Facility, primarily due to our differentiated gaming attractions in comparison to other offerings in this geographic location.
In developing the entertainment destination resort, we will adhere to the community-first policy of Bally's, which is a fundamental and defining element of who we are as a company. We believe that in every community in which Bally's operates, it has built strong, lasting partnerships with local residents and businesses. Chicago will be no different. With this project, we are committed to ensuring that our Permanent Facility generates significant economic stimulus and creates a wealth of employment opportunities for the greater Chicago community.
The Merger & Pushdown Accounting
The Bally's Corporation Merger, as defined and described in Note 1 "General Information" in Part I, Item 1 of this Quarterly Report on Form 10-Q, was completed on February 7, 2025 and resulted in a change in control, which was accounted for as a transaction between entities under common control.
Bally's Corporation elected to push down their parent's basis in its net assets into its financial statements. To better align the accounting and presentation with our public company parent, the Company has also determined that it will elect to apply pushdown accounting in these standalone financial statements. As a result of the application of pushdown accounting, these financial statements reflect the Company's basis in the assets and liabilities of Bally's Corporation, which were remeasured to fair value as of February 7, 2025. The purchase consideration in the Merger has been allocated to the Company's tangible and identifiable intangible assets and liabilities based upon their estimated fair values as of February 7, 2025, with the excess of the purchase consideration over the aggregate net fair values recorded as goodwill. Refer to Note 6 "Business Combinations" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.
Initial Public Offering and Concurrent Private Placement
On August 14, 2025, we completed our initial public offering (the "IPO") and simultaneous private offering (the "Concurrent Private Placement"). In connection with the consummation of these transactions, we amended our Certificate of Incorporation to increase Class A Interests of the Company's common stock, and authorize the issuance of up to an additional 8,200 shares of Class A Interests in the Company.
Through our IPO and Concurrent Private Placement we sold a total of 3,685 additional Class A Interests to certain investors for an aggregate purchase price of $31.1 million consisting of the following share classes and price per share:
| Share Class | Number of Shares | Price Per Share | ||||||||||||
| Class A-1 | 2,154 | $ | 250 | |||||||||||
| Class A-2 | 208 | $ | 2,500 | |||||||||||
| Class A-3 | 151 | $ | 5,000 | |||||||||||
| Class A-4 | 1,172 | $ | 25,000 | |||||||||||
In connection with the IPO and Concurrent Private Placement, we amended and restated the subordinated loan agreement with the Holding Company, pursuant to which the Holding Company made additional subordinated term loans to the Company totaling $61.0 million at an annual interest rate of 11%, compounded quarterly, with no maturity date.
Additionally, on August 14, 2025, we entered into an LLC interests subscription agreement with the Operating Company, purchasing 3,685 additional LLC interests of the Operating Company for total purchase price of $92.1 million, reducing the Holding Company's economic interest in the Operating Company to 81%. We will continue to consolidate Operating Company as the sole managing member in accordance with Accounting Standards Codification ("ASC") 810, Consolidation, and consequently, the Holding Company's ownership interest in the Operating Company will continue to be represented as non-controlling interest in our consolidated financial statements. Refer to Note 2 "Summary of Significant Accounting Policies" and Note 16 "Subsequent Events" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.
Operating Structure
Our business is organized into two reportable segments: (i) Temporary Casino and (ii) Permanent Casino. The ''Other adjustments" include certain unallocated corporate operating expenses and other adjustments to reconcile to the Company's consolidated results including, among other expenses, compensation for certain executives and other transaction costs. Refer to Note 13 "Segment Reporting" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our segment reporting structure.
Key Performance Indicators
The key performance indicators used in managing our business is Income (loss) from operations for our Permanent Casino reportable segment and Adjusted EBITDAR for our Temporary Casino reportable segment. Temporary Casino Adjusted EBITDAR is a measure of the Company's segment profitability disclosed in accordance with the requirements of ASC 280, Segment Reporting, and it does not represent a non-GAAP measure. Temporary Casino Adjusted EBITDAR is defined as earnings, or loss, for the temporary casino before interest expense, net of interest income, provision (benefit) for income taxes, depreciation and amortization, non-operating (income) expense, expansion costs, management fees to Bally's Corporation, rent expense from triple net operating leases, and certain other gains or losses. Refer to Note 13 "Segment Reporting" in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.
The Three Months Ended June 30, 2025 (Successor), Period from February 8 to June 30, 2025 (Successor) and the Period from January 1 to February 7, 2025 (Predecessor) Compared to the Three and Six Months ended June 30, 2024 (Predecessor)
Our operating results for the three months ended June 30, 2025 (Successor), the three months ended June 30, 2024 (Predecessor), the period from February 8 to June 30, 2025 (Successor), the period from January 1 to February 7, 2025 (Predecessor) and the six months ended June 30, 2024 (Predecessor) are not indicative of future operating results because we have dedicated the first several years of our corporate existence to the design, development and construction of our Permanent Facility in Chicago.
The following table presents, for the periods indicated, certain revenue and income items:
| Successor | Predecessor | |||||||||||||||||||||||||||||||
|
(in millions)
|
Three Months Ended June 30, 2025 | Period from February 8 to June 30, 2025 | Period from January 1 to February 7, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||
| Total Revenue | $ | 34.4 | $ | 52.2 | $ | 11.5 | $ | 32.6 | $ | 64.2 | ||||||||||||||||||||||
| Loss from operations | (30.0) | (45.7) | (12.9) | (18.5) | (37.9) | |||||||||||||||||||||||||||
| Net loss | (29.7) | (45.7) | (12.9) | (20.3) | (41.8) | |||||||||||||||||||||||||||
Segment Performance
The following table presents, for the periods indicated, condensed consolidated statements of operations data:
| Successor | Predecessor | |||||||||||||||||||||||||||||||
| (in thousands) | Three Months Ended June 30, 2025 | Period from February 8 to June 30, 2025 | Period from January 1 to February 7, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||
| Gaming revenue | ||||||||||||||||||||||||||||||||
| Temporary Casino | $ | 31,083 | $ | 47,018 | $ | 10,353 | $ | 29,425 | $ | 57,616 | ||||||||||||||||||||||
| Permanent Casino | - | - | - | - | - | |||||||||||||||||||||||||||
| 31,083 | 47,018 | 10,353 | 29,425 | 57,616 | ||||||||||||||||||||||||||||
| Non-gaming revenue | ||||||||||||||||||||||||||||||||
| Temporary Casino | 3,278 | 5,139 | 1,134 | 3,219 | 6,550 | |||||||||||||||||||||||||||
| Permanent Casino | - | - | - | - | - | |||||||||||||||||||||||||||
| 3,278 | 5,139 | 1,134 | 3,219 | 6,550 | ||||||||||||||||||||||||||||
| Total revenue | $ | 34,361 | $ | 52,157 | $ | 11,487 | $ | 32,644 | $ | 64,166 | ||||||||||||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||||||||||||||
| Gaming expenses | ||||||||||||||||||||||||||||||||
| Temporary Casino | $ | 17,646 | $ | 25,803 | $ | 6,039 | $ | 14,772 | $ | 29,244 | ||||||||||||||||||||||
| Permanent Casino | - | - | - | - | - | |||||||||||||||||||||||||||
| 17,646 | 25,803 | 6,039 | 14,772 | 29,244 | ||||||||||||||||||||||||||||
| Non-gaming expenses | ||||||||||||||||||||||||||||||||
| Temporary Casino | 3,453 | 4,915 | 1,260 | 1,855 | 3,796 | |||||||||||||||||||||||||||
| Permanent Casino | - | - | - | - | - | |||||||||||||||||||||||||||
| 3,453 | 4,915 | 1,260 | 1,855 | 3,796 | ||||||||||||||||||||||||||||
| Total gaming and non-gaming expenses | $ | 21,099 | $ | 30,718 | $ | 7,299 | $ | 16,627 | $ | 33,040 | ||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||||||||
| Temporary Casino | 11,647 | 18,190 | 5,105 | 12,230 | 25,552 | |||||||||||||||||||||||||||
| Permanent Casino | 6,768 | 10,052 | 3,527 | 1,714 | 3,203 | |||||||||||||||||||||||||||
| Other | 1,302 | 1,671 | 314 | 738 | 1,168 | |||||||||||||||||||||||||||
| Total general and administrative | $ | 19,717 | $ | 29,913 | $ | 8,946 | $ | 14,682 | $ | 29,923 | ||||||||||||||||||||||
Revenue
Total revenue for the the three months ended June 30, 2025 (Successor) compared to the three months ended June 30, 2024 (Predecessor) and the Predecessor period from January 1 to February 7, 2025 and Successor period from February 8 to June 30, 2025 compared to the six months ended June 30, 2024 (Predecessor), remained consistent. Once our Permanent Facility is operational, we expect our revenues will be primarily generated by gaming and entertainment offerings, with remaining revenues from other non-gaming operations, including hotel, food and beverage, and retail, entertainment and other.
Gaming and non-gaming expenses
Gaming and non-gaming expenses for the three months ended June 30, 2025 (Successor) compared to the three months ended June 30, 2024 (Predecessor) and the Predecessor period from January 1 to February 7, 2025 and Successor period from February 8 to June 30, 2025 compared to the six months ended June 30, 2024 (Predecessor) increased year over year primarily due to increased costs associated with the ramp up of employment at our temporary casino coupled with increased costs related to the introduction of additional entertainment and dining options for our customers.
General and administrative
General and administrative expenses for the three months ended June 30, 2025 (Successor) compared to the three months ended June 30, 2024 (Predecessor) increased $5.0 million primarily due to the additional rent expense associated with the lease agreement with GLP Capital, L.P. ("GLP") that was signed in the third quarter of 2024 related to the land under our permanent casino project. General and administrative expenses for the Successor period from February 8 to June 30, 2025 and the Predecessor period from January 1 to February 7, 2025 increased $8.9 million when compared to the six months ended June 30, 2024 (Predecessor), primarily attributable to the increased rent expense and additional in expansion costs associated with the opening of our permanent casino.
Depreciation and amortization
Depreciation and amortization expense for the three months ended June 30, 2025 (Successor) compared to the three months ended June 30, 2024 (Predecessor) increased $3.7 million. Depreciation and amortization expense for the Successor period from February 8 to June 30, 2025 and the Predecessor period from January 1 to February 7, 2025 increased 69% when compared to the six months ended June 30, 2024 (Predecessor). Increases for all periods is driven by the amortization of the Company's gaming license during the Successor period from February 8 to June 30, 2025, which was determined to be finite-lived, with an estimated useful life of 18 years in connection with the Merger.
Other income (expense), net
The change in total other income (expense), net, when comparing the six months ended June 30, 2024 (Predecessor) to the Successor period from February 8 to June 30, 2025 and the Predecessor period from January 1 to February 7, 2025 is directly attributable to the interest expense related to the Company's previous long-term financing obligation for the Company's ground lease in the prior year.
Benefit for income taxes
During the three months ended June 30, 2025 (Successor), the Successor period from February 8 to June 30, 2025 and the Predecessor period from January 1 to February 7, 2025 and the three and six months ended June 30, 2024 (Predecessor), there was no provision expense recorded in the condensed consolidated statements of operations as the Company has established a full valuation allowance against the net deferred tax asset position.
KEY PERFORMANCE INDICATORS
Temporary Casino Adjusted EBITDAR for the three months ended June 30, 2025 (Successor) compared to the three months ended June 30, 2024 (Predecessor) and the Predecessor period from January 1 to February 7, 2025 and Successor period from February 8 to June 30, 2025 compared to the six months ended June 30, 2024 (Predecessor) decreased year over year primarily due to increased costs associated with the ramp up of employment at our temporary casino coupled with increased costs related to the introduction of additional entertainment and dining options for our customers.
Permanent Casino loss from operations for the three months ended June 30, 2025 (Successor) compared to the three months ended June 30, 2024 (Predecessor) and the Predecessor period from January 1 to February 7, 2025 and Successor period from February 8 to June 30, 2025 compared to the six months ended June 30, 2024 (Predecessor) increased year over year primarily due to the additional rent expense associated with the lease agreement with GLP in the current year related to the land under our permanent casino project.
The following table sets forth the measures of segment performance for the Company's two reportable segments, reconciled to net loss on a consolidated basis. The Other adjustments category is included in the following table in order to reconcile the segment information to the Company's unaudited condensed consolidated financial statements.
| Successor | Predecessor | |||||||||||||||||||||||||||||||
| (in thousands) | Three Months Ended June 30, 2025 | Period from February 8 to June 30, 2025 | Period from January 1 to February 7, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||
| Temporary Casino | $ | 34,361 | $ | 52,157 | $ | 11,487 | $ | 32,644 | $ | 64,166 | ||||||||||||||||||||||
| Permanent Casino | - | - | - | - | - | |||||||||||||||||||||||||||
| Total revenue | $ | 34,361 | $ | 52,157 | $ | 11,487 | $ | 32,644 | $ | 64,166 | ||||||||||||||||||||||
|
Permanent Casino Loss from Operations
|
$ | (11,220) | $ | (17,026) | $ | (3,536) | $ | (1,714) | $ | (3,203) | ||||||||||||||||||||||
|
Temporary Casino Adjusted EBITDAR(1)
|
$ | 1,615 | $ | 3,249 | $ | (917) | $ | 3,839 | $ | 5,677 | ||||||||||||||||||||||
|
Temporary Casino Operating costs and expenses excluded from Adjusted EBITDAR
|
||||||||||||||||||||||||||||||||
| Depreciation and amortization | (4,045) | (6,365) | (1,976) | (4,793) | (9,070) | |||||||||||||||||||||||||||
|
Expansion costs(2)
|
- | - | - | (52) | (103) | |||||||||||||||||||||||||||
| Management fees to Bally's Corporation | (15,000) | (23,871) | (6,129) | (15,000) | (30,000) | |||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||||||||
|
Total other expense, net(3)
|
248 | - | - | (1,806) | (3,946) | |||||||||||||||||||||||||||
| Other adjustments | (1,302) | (1,671) | (314) | (738) | (1,168) | |||||||||||||||||||||||||||
| Total Net loss | $ | (29,704) | $ | (45,684) | $ | (12,872) | $ | (20,264) | $ | (41,813) | ||||||||||||||||||||||
__________________________________
(1) Adjusted EBITDAR is defined as total earnings, or loss, for the Temporary Casino before interest expense, net of interest income, provision (benefit) for income taxes, depreciation and amortization, non-operating (income) expense, expansion costs, management fees to Bally's Corporation, rent expense from triple net operating leases, and certain other gains or losses.
(2) The Company defines expansion expenses as costs incurred in connection with the opening of a new facility or significant expansion of an existing property. Costs classified as expansion consist primarily of marketing, master planning, conceptual design fees and legal and professional fees that are not eligible for capitalization and are included in "General and administrative" on the unaudited condensed consolidated statements of operations.
(3) Total other expense, net includes primarily interest expense.
Critical Accounting Estimates
Valuation of Intangible Assets
Intangible assets consist primarily of a gaming license, which has been valued through application of push down accounting in connection with the Merger.
The gaming license was valued using the Greenfield Method under the income approach. This method estimates isolated income that is properly attributable to a license based on modeling a hypothetical start-up company going into business without any other assets than the gaming license being valued and building a new casino with similar utility to the existing casino. Using this method, the valuation of the gaming license is dependent upon significant estimates such as projected revenues and cash flows, estimated construction costs, duration of that construction, expansion expenses and appropriate discounting. Gaming licenses accounted for as asset acquisitions are valued at cost.
The Company reviews the carrying amount of its finite-lived intangible asset for possible impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Should events and circumstances indicate finite-lived intangible assets may not be recoverable, the Company performs a test for recoverability whereby estimated undiscounted cash flows are compared to the carrying values of the assets. Should the estimated undiscounted cash flows exceed the carrying value, no impairments are recorded. If the undiscounted cash flows do not exceed the carrying values, an impairment is recorded based on the fair value of the asset.
For our finite-lived intangible asset, we establish a useful life upon initial recognition based on the period over which the asset is expected to contribute to the future cash flows of the Company and periodically evaluates the remaining useful lives to determine whether events and circumstances warrant a revision to the remaining amortization period. Finite-lived intangible assets are amortized over their remaining useful lives in a pattern in which the economic benefits of the intangible asset are consumed, which is generally on a straight-line basis.
Recent Accounting Pronouncements
Refer to Note 4 "Recently Issued Accounting Pronouncements" in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements that affect us.
Liquidity and Capital Resources
Cash Flows Summary
| Successor | Predecessor | |||||||||||||||||||
| (in thousands) | Period from February 8 to June 30, 2025 | Period from January 1 to February 7, 2025 | Six Months Ended June 30, 2024 | |||||||||||||||||
| Net cash used in operating activities | $ | (31,612) | $ | (6,136) | $ | (26,746) | ||||||||||||||
| Net cash used in investing activities | (57,457) | (10,969) | (38,640) | |||||||||||||||||
| Net cash provided by financing activities | 83,912 | 21,170 | 63,986 | |||||||||||||||||
| Net change in cash and restricted cash | (5,157) | 4,065 | (1,400) | |||||||||||||||||
| Cash and restricted cash, beginning of period | 18,584 | 14,519 | 71,305 | |||||||||||||||||
| Cash and restricted cash, end of period | $ | 13,427 | $ | 18,584 | $ | 69,905 | ||||||||||||||
Operating Activities
Net cash used in operating activities for the Successor period from February 8 to June 30, 2025 was $31.6 million, $6.1 million for the Predecessor period from January 1 to February 7, 2025, and $26.7 million for the six months ended June 30, 2024. All periods presented were impacted by net loss positions and changes in working capital associated with the Company's expansion.
Investing Activities
Net cash used in investing activities for the Successor period from February 8 to June 30, 2025 was $57.5 million and net cash used in investing activities for the Predecessor period from January 1 to February 7, 2025 and the six months ended June 30, 2024 were $11.0 million and $38.6 million, respectively. The Company's cash used in investing activities during the presented periods was primarily attributable to capital expenditures surrounding the design and development of the permanent casino.
Financing Activities
Net cash provided by financing activities for the Successor period from February 8 to June 30, 2025 was $83.9 million and net cash provided by financing activities for the Predecessor period from January 1 to February 7, 2025 and the six months ended June 30, 2024 were $21.2 million and $64.0 million, respectively. Cash provided by financing activities during the periods presented is primarily attributable to the financing provided by Bally's Corporation, combined with the Private Placement proceeds during the Successor period from February 8 to June 30, 2025.
Contractual Obligations and Commitments
Host Community Agreement
On June 9, 2022, the Operating Company signed a host community agreement (the "HCA") with the City of Chicago to develop a destination casino resort. The HCA establishes a minimum capital investment of $1.34 billion on the design, construction and equipping of our temporary casino and our Permanent Facility. As of June 30, 2025 (Successor), approximately $936.6 million of this commitment remains. The actual cost of the development may exceed this minimum capital investment amount. In addition, land acquisition costs and financing costs, among other types of costs, are not counted toward meeting this minimum capital investment amount.
In connection with the entry into the host community agreement with the City of Chicago, the Company will is required to pay annual fixed host community impact fees of $4.0 million. Additionally, Bally's Corporation provided the City of Chicago with a performance guaranty whereby Bally's Corporation agreed to have and maintain available financial resources in an amount reasonably sufficient to allow the Company to complete its obligations under the host community agreement. Upon notice from the City of Chicago that the Company has failed to perform various obligations under the host community agreement, Bally's Corporation has indemnified the City of Chicago against any and all liability, claim or reasonable and documented expense the City of Chicago may suffer or incur by reason of any nonperformance of any of the Company's obligations. The guaranty will terminate two years after the later of (i) the date on which the Permanent Facility commences operations or (ii) the date on which Bally's Chicago achieves final completion as defined in the host community agreement.
Casino Fees
Under the Illinois Gambling Act, the Company will be responsible to pay the Illinois Gaming Board a reconciliation fee payment three years after the date operations commenced (in a temporary or permanent facility) in an amount equal to 75% of the adjusted gross receipt ("AGR") for the most lucrative 12-month period of operations, minus the amount equal to the initial payment per gaming position paid.
Temporary Services Agreement
The Company has a Corporate Services Agreement with Bally's Corporation requiring a fixed monthly payment of $5.0 million, beginning with the commencement of operations at the Temporary Facility. The Corporate Services Agreement provides the Company with certain administrative and corporate services from Bally's Management Group, LLC ("BMG"), a subsidiary of Bally's Corporation. These fixed payments are in addition to certain expenses such as personnel and administrative costs allocated to the Company, based on an estimated percentages of time spent on the Company's activities by corporate employees.
Permanent Services Agreement
The Company has a Permanent Services Agreement with Bally's Management Group, LLC, pursuant to which BMG has agreed to provide us with general business support services, including services relating to external reporting obligations, internal audit, regulatory filings, design and construction, business development, human resources, tax, accounting, treasury and capital related, risk management, legal, finance and marketing upon the opening of our Permanent Facility. This agreement requires us to pay BMG an annual fee equal to the salaries, burden, overhead and other operating costs for providing such services based on our share of those costs. The initial term of the agreement is one year, beginning upon the opening of our Permanent Facility, and will be automatically renewed for successive one-year terms, unless either party serves on the other a written notice of termination.
GLP Lease Agreement and GLP Development Agreement
On July 11, 2024, the Company entered into a Binding Term Sheet to form a strategic construction and financing arrangement with GLP which includes the funding to complete the construction of the Permanent Facility under a new master lease agreement with the Company ("Chicago MLA").
On July 17, 2025, the Company entered into the Chicago MLA, as described in Note 11 "Leases," with GLP, that amended the existing ground lease for the property on which the Company plans to develop its Permanent Facility and a development agreement with GLP (the "Chicago Development Agreement") pursuant to which GLP has committed to advance up to $940 million (the "GLP Development Advances") for the payment of hard costs used to construct the Permanent Facility in exchange for increasing the amount of rent payable to GLP under the Chicago MLA.
The Chicago MLA has an initial term of 15 years and includes four, 5 year options to renew and is subject to annual escalation. Annual rent under the Chicago MLA is $20 million, with additional rent equal to 8.5% of the GLP Development Advances that are granted to the Company. The amended and restated ground lease will be accounted for as a lease modification event in the third quarter of 2025. In addition, the Company has invoiced GLP for reimbursement for $84.3 million under the Chicago Development Agreement and expects to receive payment and thus incur increased rent in the third quarter of 2025.
Bally's Chicago Inc. published this content on September 26, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on September 26, 2025 at 20:21 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]