Bally's Rating Downgraded to 'Negative Watch' by Fitch Following Intralot Agreement
Bally's Corporation, a leading name in the gaming industry, is currently navigating a complex financial landscape. The company's ambitious expansion plans, significant debt, and regulatory hurdles have raised concerns among financial analysts.
**Merger with Intralot**
In a move aimed at bolstering its international presence, Bally's announced a merger of its international interactive unit with Greek lottery provider Intralot on July 2, 2025. The deal, valued at approximately $3.2 billion, is expected to close in Q4 2025 after regulatory and shareholder approvals. The transaction will generate about $1.76 billion in cash proceeds for Bally's, alongside a 60% equity stake in the new Intralot entity.
**Financial Position and Leverage**
As of April 2025, Bally’s had roughly $3.4 billion in total debt against a market capitalization around $500 million, reflecting a highly leveraged position. Post-merger, Bally’s debt-laden balance sheet stands at about $3.45 billion, amplifying near-term financial risks, including high interest expenses such as 9% annual interest on convertible notes.
**Rating Outlook**
Fitch Ratings placed Bally's on “Rating Watch Negative” after the Intralot transaction announcement, signalling the risk of a downgrade if leverage stays elevated or if Bally’s cannot release its Twin River property collateral to Gaming and Leisure Properties (GLPI). The current credit rating is B-, with Fitch highlighting concerns over Bally's ability to manage its debt and execute on its growth plans.
**Bally’s Chicago Casino Project**
The $1.7 billion Chicago casino resort is under construction with a mandatory opening date of September 2026. The project has faced financial uncertainties and regulatory hurdles, including a temporary construction halt in May 2025 due to permitting issues tied to an unapproved waste vendor. Gaming and Leisure Properties (GLPI) committed $940 million to the Chicago project’s construction, effectively saving it.
**Transaction with Gaming and Leisure Properties (GLPI) for Bally’s Twin River Lincoln Casino Resort**
Bally's is obligated under financial agreements involving GLPI, which owns major real estate assets including the Twin River Lincoln Casino Resort. Fitch’s rating watch status partly hinges on Bally’s ability to “release” the Twin River property from the GLPI collateral pool, which would reduce leverage and improve financial metrics. Failure to do so may contribute to a rating downgrade.
Despite the sizeable influx of capital from the Intralot transaction and GLPI’s support for Chicago, Bally’s remains under pressure due to its large debt load, risky leverage ratios, and regulatory challenges. Financial analysts are cautious, with the potential for rating downgrades that would increase borrowing costs and limit flexibility if Bally’s cannot deleverage or improve operational performance. The company’s aggressive expansion strategy, including the Chicago casino, Las Vegas plans, and international ventures, hinges on navigating these financial and regulatory headwinds successfully.
- The financial analysts' concerns regarding Bally's Corporation are heightened due to the company's ambitions in the field of mergers and acquisitions, specifically the planned merger with Intralot in the igaming sector, as the deal could potentially exacerbate the company's already significant financial obligations.
- The financial position of Bally's Corporation remains precarious, even after the planned merger with Intralot, as the company's substantial debt, currently at around $3.45 billion, continues to pose near-term risks, such as high annual interest expenses of 9% on convertible notes.
- The financial rating agency, Fitch Ratings, has placed Bally's Corporation on a "Rating Watch Negative" status, indicating the potential for a downgrade, due to concerns about the company's ability to manage its debt and execute on its growth plans, particularly in relation to the release of the Twin River property from the collateral pool with Gaming and Leisure Properties (GLPI).
