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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-38850
blys_lg_rgb_pos_210420.jpg
Bally’s 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,RI02903
(Address of principal executive offices)(Zip Code)
(401) 475-8474
(Registrant’s 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 registered
Common stock, $0.01 par valueBALYNew York Stock Exchange

Indicate by 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 during the 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 requirements for the past 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 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant 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 an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No  
As of April 28, 2023, the number of shares of the registrant’s $0.01 par value common stock outstanding was 46,147,103.
For additional information regarding the Company’s shares outstanding, refer to Note 17 “Stockholders’ Equity.”



BALLY’S CORPORATION

TABLE OF CONTENTS
Page No.
  
 

2


PART I.    FINANCIAL INFORMATION
ITEM 1.    Financial Statements
BALLY’S CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands, except share data)
March 31,
2023
December 31,
2022
Assets 
Cash and cash equivalents$344,266 $212,515 
Restricted cash52,596 52,669 
Accounts receivable, net67,196 71,673 
Inventory14,288 14,191 
Tax receivable16,836 53,771 
Prepaid expenses and other current assets93,223 100,717 
Assets held for sale15,801 17,177 
Total current assets604,206 522,713 
Property and equipment, net1,111,714 1,202,102 
Right of use assets, net1,192,633 808,926 
Goodwill1,795,038 1,746,202 
Intangible assets, net1,967,589 1,961,938 
Deferred tax asset18,198 25,544 
Other assets71,024 32,688 
Total assets$6,760,402 $6,300,113 
Liabilities and Stockholders’ Equity
Current portion of long-term debt$19,450 $19,450 
Current portion of lease liabilities47,243 32,929 
Accounts payable58,563 70,071 
Accrued income taxes76,208 56,012 
Accrued liabilities454,726 573,931 
Liabilities related to assets held for sale1,773 3,409 
Total current liabilities657,963 755,802 
Long-term debt, net 3,315,064 3,469,105 
Long-term portion of financing obligation200,000 200,000 
Long-term portion of lease liabilities1,177,704 803,212 
Deferred tax liability204,841 138,017 
Naming rights liabilities107,756 109,807 
Other long-term liabilities75,462 17,923 
Total liabilities5,738,790 5,493,866 
Commitments and contingencies (Note 18)
Stockholders’ equity:
Common stock ($0.01 par value, 200,000,000 shares authorized; 45,767,764 and 46,670,057 shares issued; 45,767,764 and 46,670,057 shares outstanding)
457 466 
Preferred stock ($0.01 par value; 10,000,000 shares authorized; no shares outstanding)
  
Additional paid-in-capital1,605,087 1,636,366 
Treasury stock, at cost  
Accumulated deficit(340,793)(535,373)
Accumulated other comprehensive loss(243,567)(295,640)
Total Bally’s Corporation stockholders’ equity1,021,184 805,819 
Non-controlling interest428 428 
Total stockholders’ equity1,021,612 806,247 
Total liabilities and stockholders’ equity$6,760,402 $6,300,113 
See accompanying notes to condensed consolidated financial statements.
3


BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(In thousands, except per share data)


Three Months Ended March 31,
 20232022
Revenue: 
Gaming$486,895 $463,702 
Non-gaming111,825 84,569 
Total revenue598,720 548,271 
Operating (income) costs and expenses:
Gaming217,661 219,212 
Non-gaming52,344 40,637 
General and administrative251,608 187,021 
Gain from sale-leaseback, net(374,186) 
Depreciation and amortization74,561 78,881 
Total operating costs and expenses221,988 525,751 
Income from operations376,732 22,520 
Other income (expense):
Interest expense, net of amounts capitalized(63,264)(45,685)
Other non-operating income, net2,610 19,479 
Total other income (expense), net(60,654)(26,206)
Income (loss) before income taxes316,078 (3,686)
Provision (benefit) for income taxes137,742 (5,575)
Net income$178,336 $1,889 
Basic earnings per share$3.28 $0.03 
Weighted average common shares outstanding - basic54,420 60,017 
Diluted earnings per share$3.24 $0.03 
Weighted average common shares outstanding - diluted55,089 60,120 
See accompanying notes to condensed consolidated financial statements.
4

BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)
(In thousands)


Three Months Ended March 31,
20232022
Net income$178,336 $1,889 
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax52,073 (71,542)
Other comprehensive income (loss)52,073 (71,542)
Total comprehensive income (loss)$230,409 $(69,653)



See accompanying notes to condensed consolidated financial statements.

5

BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)
(In thousands, except share data)


 Common StockAdditional
Paid-in Capital
Treasury
Stock
Retained
(Deficit) Earnings
Accumulated Other Comprehensive LossNon-controlling InterestTotal Stockholders’
Equity
 Shares OutstandingAmount
Balance as of December 31, 202246,670,057 $466 $1,636,366 $ $(535,373)$(295,640)$428 $806,247 
Release of restricted stock and other stock awards124,050 1 (1,332)— — — — (1,331)
Share-based compensation— — 6,040 — — — — 6,040 
Retirement of treasury shares— (10)(35,987)19,753 16,244 — —  
Share repurchases(1,026,343)— — (19,753)— — — (19,753)
Other comprehensive income— — — — — 52,073 — 52,073 
Net income— — — — 178,336 — — 178,336 
Balance as of March 31, 202345,767,764 $457 $1,605,087 $ $(340,793)$(243,567)$428 $1,021,612 

 Common StockAdditional
Paid-in Capital
Treasury
Stock
Retained
(Deficit) Earnings
Accumulated Other Comprehensive LossNon-controlling InterestTotal Stockholders’
Equity
 Shares OutstandingAmount
Balance as of December 31, 202152,254,477 $530 $1,849,068 $(29,166)$(181,581)$(26,809)$3,760 $1,615,802 
Release of restricted stock and other stock awards122,849 (2,534)— — — — (2,533)
Share-based compensation— — 5,095 — — — — 5,095 
Stock options exercised20,000 — 86 — — — — 86 
Penny warrants exercised383,934 4 —  — — — 4 
Retirement of treasury shares— (11)(35,200)42,454 (7,243)— —  
Share repurchases(350,616)— — (13,288)— — — (13,288)
Issuance of MKF penny warrants— — 12,010 — — — — 12,010 
Settlement of consideration to SportCaller107,832 1 3,699 — — — — 3,700 
Other comprehensive loss— — — — — (71,542)— (71,542)
Net income— — — — 1,889 — — 1,889 
Balance as of March 31, 202252,538,476 $525 $1,832,224 $ $(186,935)$(98,351)$3,760 $1,551,223 
See accompanying notes to condensed consolidated financial statements.
6

BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended March 31,
(in thousands)20232022
Cash flows from operating activities:  
Net income $178,336 $1,889 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization74,561 78,881 
Non-cash lease expense13,972 7,221 
Share-based compensation6,040 5,095 
Amortization of debt discount and debt issuance costs2,766 2,417 
Gain on sale-leaseback(374,186) 
Gain on extinguishment of debt(4,044) 
Deferred income taxes58,818 (18,594)
Loss on assets and liabilities measured at fair value(310)139 
Change in value of naming rights liabilities267 (13,379)
Change in contingent consideration payable1,206 (5,859)
Adjustment on bargain purchase 107 
Foreign exchange loss (gain)4,308 (175)
Other operating activities(693)1,925 
Changes in current operating assets and liabilities22,847 (38,857)
Net cash (used in) provided by operating activities(16,112)20,810 
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired(38,243) 
Proceeds from sale-leaseback411,000  
Capital expenditures(43,678)(54,516)
Cash paid for internally developed software(7,143)(14,956)
Acquisition of gaming licenses(1,900)(860)
Other intangible asset acquisitions (1,500)
Other investing activities(400)(123)
Net cash provided by (used in) investing activities319,636 (71,955)
Cash flows from financing activities:
Issuance of long-term debt 105,000 
Repayments of long-term debt(152,483)(84,863)
Share repurchases (19,753)(13,288)
Other financing activities(1,332)(2,444)
Net cash (used in) provided by financing activities(173,568)4,405 
Effect of foreign currency on cash and cash equivalents2,819 (4,430)
Change in cash and cash equivalents held for sale(1,097) 
Net change in cash and cash equivalents and restricted cash131,678 (51,170)
Cash and cash equivalents and restricted cash, beginning of period265,184 274,840 
Cash and cash equivalents and restricted cash, end of period$396,862 $223,670 
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized$82,724 $67,015 
Cash received from income tax refunds, net of cash paid6,113 3,427 
Non-cash investing and financing activities:
Unpaid property and equipment$32,095 $33,743 
Bally’s Chicago - land development liability142,567  
Investment in GLP Capital, L.P.14,412  
Investment in RI Joint Venture17,832  


7

BALLY’S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

March 31,December 31,
Reconciliation of cash and cash equivalents and restricted cash:20232022
Cash and cash equivalents$344,266 $212,515 
Restricted cash52,596 52,669 
Total cash and cash equivalents and restricted cash$396,862 $265,184 

See accompanying notes to condensed consolidated financial statements.
8

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


1.    GENERAL INFORMATION

Description of Business

Bally’s Corporation (the “Company,” or “Bally’s”) is a global gaming, hospitality and entertainment company with casinos and resorts and online gaming (“iGaming”) businesses. The Company owns and manages the following casino and resort properties:

Casinos and ResortsLocationTypeBuilt/Acquired
Bally’s Twin River Lincoln Casino Resort (“Bally’s Twin River”)
Lincoln, Rhode IslandCasino and Resort2004
Bally’s Arapahoe Park
Aurora, ColoradoRacetrack/OTB Site2004
Hard Rock Hotel & Casino Biloxi (“Hard Rock Biloxi”)(2)
Biloxi, MississippiCasino and Resort2014
Bally’s Tiverton Casino & Hotel (“Bally’s Tiverton”)(2)
Tiverton, Rhode IslandCasino and Hotel2018
Bally’s Dover Casino Resort (“Bally’s Dover”)(2)
Dover, DelawareCasino, Resort and Raceway2019
Bally’s Black Hawk(1)(2)
Black Hawk, ColoradoThree Casinos2020
Bally’s Kansas City Casino (“Bally’s Kansas City”)
Kansas City, MissouriCasino2020
Bally’s Vicksburg Casino (“Bally’s Vicksburg”)
Vicksburg, MississippiCasino and Hotel2020
Bally’s Atlantic City Casino Resort (“Bally’s Atlantic City”)
Atlantic City, New JerseyCasino and Resort2020
Bally’s Shreveport Casino & Hotel (“Bally’s Shreveport”)
Shreveport, LouisianaCasino and Hotel2020
Bally’s Lake Tahoe Casino Resort (“Bally’s Lake Tahoe”)
Lake Tahoe, NevadaCasino and Resort2021
Bally’s Evansville Casino & Hotel (“Bally’s Evansville”)(2)
Evansville, IndianaCasino and Hotel2021
Bally’s Quad Cities Casino & Hotel (“Bally’s Quad Cities”)(2)
Rock Island, IllinoisCasino and Hotel2021
Tropicana Las Vegas Casino and Resort (“Tropicana Las Vegas”)(2)
Las Vegas, NevadaCasino and Resort2022
__________________________________
(1)    Includes Bally’s Black Hawk North Casino, Bally’s Black Hawk West Casino and Bally’s Black Hawk East Casino.
(2)    Properties leased from Gaming and Leisure Properties, Inc. (“GLPI”). Refer to Note 15 “Leases” for further information.

The North America Interactive reportable segment includes a portfolio of sports betting, iGaming and free-to-play gaming brands and the North American operations of Gamesys Group Ltd. (“Gamesys”), an iCasino and online bingo platform provider and operator.

The Company’s International Interactive reportable segment includes the interactive activities in Europe and Asia of Gamesys.

Refer to Note 19 “Segment Reporting” for further information.


2.    SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and entities the Company identifies as variable interest entities (“VIEs”), of which the Company is determined to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year’s presentation. The financial statements of our foreign subsidiaries are translated into US dollars using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses are included in net income.

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BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of the SEC’s Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There were no material changes in significant accounting policies from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates.

Rhode Island Joint Venture

On January 1, 2023, the Company and International Game Technology PLC (“IGT”) contributed certain tangible assets and leases to Rhode Island VLT Company, LLC (“RIVLT”) in exchange for equity interests of RIVLT. The Company contributed video lottery terminals (“VLTs”) and player tracking equipment to the joint venture for a 40% equity interest of RIVLT. The joint venture will be accounted for under the equity method of accounting whereby the Company will record its 40% share of the total joint venture net income or loss each period within Other non-operating income, net” in the condensed consolidated statements of operations. For the three months ended March 31, 2023, the Company recorded equity income of $2.1 million.

Variable Interest Entities

The Company evaluates entities for which control is achieved through means other than voting rights to determine if it is the primary beneficiary of a VIE. An entity is a VIE if it has any of the following characteristics (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support (ii) equity holders, as a group, lack the characteristics of a controlling financial interest or (iii) the entity is structured with non-substantive voting rights. The primary beneficiary of the VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company consolidates its investment in a VIE when it determines that it is its primary beneficiary.

In determining whether it is the primary beneficiary of the VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities and significance of the Company’s investment and other means of participation in the VIE’s expected profits/losses. Significant judgments related to these determinations include estimates about the current and future fair values and performance of assets held by these VIEs and general market conditions.

Management has analyzed and concluded that Breckenridge Curacao B.V. (“Breckenridge”) is a VIE because it does not have sufficient equity investment at risk. The Company has determined that it is the primary beneficiary and consolidates the VIE because (a) although the Company does not control all decisions of Breckenridge, the Company has the power to direct the activities of Breckenridge that most significantly impact its economic performance through various contracts with the entity and (b) the nature of these agreements between Breckenridge and the Company provides the Company with the obligation to absorb losses and the right to receive benefits based on fees that are based upon off-market rates and commensurate to the level of services provided. The Company receives significant benefits in the form of fees that are not at market and commensurate to the level of services provided. As a result, the Company consolidates all of the assets, liabilities and results of operations of Breckenridge and its subsidiaries in the accompanying condensed consolidated financial statements. As of March 31, 2023 and December 31, 2022, Breckenridge had total assets of $147.3 million and $93.4 million, respectively, and total liabilities of $81.1 million and $77.1 million, respectively. Breckenridge had revenues of $84.0 million and $86.9 million for the three months ended March 31, 2023 and 2022, respectively.

The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The Company performs this analysis on an ongoing basis.
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BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents includes cash balances and highly liquid investments with an original maturity of three months or less. Restricted cash includes player deposits, payment service provider deposits, and Video Lottery Terminal (“VLT”) and table games related cash payable to certain states where we operate, which are unavailable for the Company’s use.

Accounts Receivable, Net

Accounts receivable, net consists of the following:
March 31,December 31,
(in thousands)20232022
Amounts due from Rhode Island and Delaware(1)
$14,130 $15,865 
Gaming receivables17,092 19,065 
Non-gaming receivables41,333 42,532 
Accounts receivable72,555 77,462 
Less: Allowance for doubtful accounts(5,359)(5,789)
Accounts receivable, net$67,196 $71,673 
__________________________________
(1)    Represents the Company’s share of VLT and table games revenue for Bally’s Twin River and Bally’s Tiverton due from the State of Rhode Island and from the State of Delaware for Bally’s Dover.

Gaming Expenses

Gaming expenses include, among other things, payroll costs and expenses associated with the operation of VLTs, slots and table games, including gaming taxes payable to jurisdictions in which the Company operates outside of Rhode Island and Delaware, and marketing costs directly associated with the Company’s iGaming products and services. These marketing expenses are included within Gaming expenses in the condensed consolidated statements of operations and were $45.9 million and $57.7 million for the three months ended March 31, 2023 and 2022, respectively. Gaming expenses also include racing expenses comprised of payroll costs, off track betting (“OTB”) commissions and other expenses associated with the operation of live racing and simulcasting.

Advertising Expense

The Company expenses advertising costs as incurred. For the three months ended March 31, 2023 and 2022, advertising expense was $5.4 million and $7.5 million, respectively, and are included in “Gaming and administrative” on the condensed consolidated statement of operations.

Earnings (Loss) Per Share

Basic earnings (loss) per common share is calculated in accordance with Accounting Standards Codification (“ASC”) 260, Earnings Per Share, which requires entities that have issued securities other than common stock that participate in dividends with common stock (“participating securities”) to apply the two-class method to compute basic earnings (loss) per common share. The two-class method is an earnings allocation method under which basic earnings (loss) per common share is calculated for each class of common stock and participating security as if all such earnings had been distributed during the period. To calculate basic earnings (loss) per share, the earnings allocated to common shares is divided by the weighted average number of common shares outstanding, contingently issuable warrants and RSUs, RSAs and PSUs for which no future service is required as a condition to the delivery of the underlying common stock (collectively, basic shares).

Fair Value Measurements

Fair value is determined using the principles of ASC 820, Fair Value Measurement. Fair value is described as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes and defines the inputs to valuation techniques as follows:

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BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Level 1: Observable quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2: Inputs are observable for the asset or liability either directly or through corroboration with observable market data.
Level 3: Unobservable inputs.

The inputs used to measure the fair value of an asset or a liability are categorized within levels of the fair value hierarchy. The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the measurement.

Strategic Partnership - Sinclair Broadcast Group

On November 18, 2020, the Company and Sinclair Broadcast Group, Inc. (“Sinclair”) entered into a Framework Agreement (the “Sinclair Agreement”), which provides for a long-term strategic relationship between the Company and Sinclair combining Bally’s integrated, proprietary sports betting technology with Sinclair’s portfolio of local broadcast stations and its Tennis Channel, Stadium sports network and STIRR streaming service. The Company received naming rights to the regional sports networks and certain integrations to network programming in exchange for annual fees paid in cash, the issuance of warrants and options and an agreement to share in certain tax benefits resulting from the Tax Receivable Agreement (“TRA”) with Sinclair. The initial term of the agreement is ten years from the commencement date of the re-branded Sinclair regional sports networks and can be renewed for one additional five-year term unless either the Company or Sinclair elect not to renew.

Naming Rights Intangible Asset - Under the terms of the Sinclair Agreement, the Company is required to pay annual naming rights fees to Diamond Sports Group for naming rights of the regional sports networks which escalate annually and total $88.0 million over the 10-year term of the agreement beginning April 1, 2021. The Company accounted for this transaction as an asset acquisition in accordance with the “Acquisition of Assets Rather Than a Business” subsections of ASC 805-50, Business Combinations—Related Issues, using a cost accumulation model. The naming rights intangible asset represents the consideration transferred on the acquisition date comprised of the present value of annual naming rights fees, the fair value of the warrants and options and an estimate of the TRA payments, each explained below. The naming rights intangible asset, net of accumulated amortization, was $247.9 million and $255.6 million as of March 31, 2023 and December 31, 2022, respectively. Amortization began on April 1, 2021, the commencement date of the re-branded Sinclair regional sports networks, and was $7.7 million and $8.4 million for the three months ended March 31, 2023 and 2022, respectively. Refer to Note 10 “Goodwill and Intangible Assets” for further information.

Naming Rights Fees - The present value of the annual naming rights fees was recorded as part of the cost of the naming rights intangible asset with a corresponding liability which will be accreted through interest expense over the life of the agreement. The total value of the liability as of March 31, 2023 and December 31, 2022 was $58.9 million and $59.3 million, respectively. The short-term portion of the liability, which was $6.5 million and $6.0 million as of March 31, 2023 and December 31, 2022, respectively, is recorded within “Accrued liabilities” and the long-term portion of the liability, which was $52.4 million and $53.3 million as of March 31, 2023 and December 31 2022, respectively, is recorded within “Naming rights liabilities” in the condensed consolidated balance sheets. Accretion expense for the three months ended March 31, 2023 and 2022, was $1.1 million and was reported in “Interest expense, net of amounts capitalized” in the condensed consolidated statements of operations.

Warrants and Options - The Company issued to Sinclair (i) an immediately exercisable warrant to purchase up to 4,915,726 shares of the Company at an exercise price of $0.01 per share (“the Penny Warrants”), (ii) a warrant to purchase up to a maximum of 3,279,337 additional shares of the Company at a price of $0.01 per share subject to the achievement of various performance metrics (the “Performance Warrants”) and (iii) an option to purchase up to 1,639,669 additional shares in four tranches with purchase prices ranging from $30.00 to $45.00 per share, exercisable over a seven-year period beginning on the fourth anniversary of the November 18, 2020 closing (the “Options”). The exercise and purchase prices and the number of shares issuable upon exercise of the warrants and options are subject to customary anti-dilution adjustments. The issuance pursuant to the warrants and options of shares in excess of 19.9% of the Company’s currently outstanding shares was subject to the approval of the Company’s stockholders in accordance with the rules of the NYSE, which was obtained on January 27, 2021.

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BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Penny Warrants & Options. The Penny Warrants and Options are equity classified instruments under ASC 815, Derivatives and Hedging, (“ASC 815”). The fair value of the Penny Warrants approximates the fair value of the underlying shares and was $150.4 million on November 18, 2020 at issuance, and was recorded to “Additional paid-in-capital” in the condensed consolidated balance sheets, with an offset to the naming rights intangible asset. The fair value of the Options was $59.7 million as of March 31, 2023 and December 31, 2022, and is recorded within “Additional paid-in-capital” in the condensed consolidated balance sheets.

Performance Warrants. The Performance Warrants are accounted for as a derivative liability because the underlying performance metrics represent an adjustment to the settlement amount that is not indexed to the Company’s own stock and thus equity classification is precluded under ASC 815. Refer to Note 11 “Fair Value Measurements” for further information.

Tax Receivable Agreement - The Company is required to share 60% of the tax benefit the Company receives from the Penny Warrants, Options, Performance Warrants and payments under the TRA with Sinclair over the term of the agreement as tax benefit amounts are determined through the filing of the Company’s annual tax returns. Changes in estimate of the tax benefit to be realized and tax rates in effect at the time, among other changes, are treated as an adjustment to the naming rights intangible asset. The TRA liability was $17.9 million and $19.4 million as of March 31, 2023 and December 31, 2022, respectively, and is included in “Naming rights liabilities” in the condensed consolidated balance sheets. The change in value of the TRA liability is included in “Other non-operating expenses, net” in the condensed consolidated statements of operations.

Provision (Benefit) for Income Taxes

During the three months ended March 31, 2023 and 2022, the Company recorded a provision for income tax of $137.7 million, at an effective year to date tax rate of 43.6% and a benefit for income tax of $5.6 million, at an effective year to date tax rate of 151.2%, respectively. The 2023 year to date effective tax rate was higher than the US federal statutory tax rate of 21%, largely due to an increase in the valuation allowance and a tax liability for a discrete item related to the deferred gain on sale leaseback transactions in Mississippi and Rhode Island. The 2022 year to date effective tax rate was lower than the US federal statutory tax rate of 21%, largely due to a tax benefit recorded in foreign jurisdictions during the year, offset by a discrete item related to the gain on sale leaseback transactions in Colorado and Illinois.


3.    CONSOLIDATED FINANCIAL INFORMATION

General and Administrative Expenses

Amounts included in General and administrative for the three months ended March 31, 2023 and 2022 were as follows:
Three Months Ended March 31,
(in thousands)20232022
Advertising, general and administrative$221,005 $181,741 
Acquisition and transaction related costs13,781 5,280 
Restructuring 16,822  
Total general and administrative$251,608 $187,021 
13

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Other Non-Operating Income (Expense)

Amounts included in Other non-operating income (expenses), net for the three months ended March 31, 2023 and 2022 were as follows:
Three Months Ended March 31,
(in thousands)20232022
Change in value of naming rights liabilities$(267)$13,379 
Gain on equity method investments2,100  
Gain on extinguishment of debt4,044  
Foreign exchange (loss) gain(4,308)182 
Other, net1,041 5,918 
Total other non-operating income (expenses), net$2,610 $19,479 

4.    RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements

Standards Implemented

In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this update address diversity in practice and inconsistency related to recognition of an acquired contract liability and the effect of payment terms on subsequent revenue recognition for the acquirer. This update is effective for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, with early adoption permitted. The Company’s adoption of this ASU in the first quarter of 2023 did not have a material impact to its condensed consolidated financial statements.

Standards to Be Implemented

In December 2022, the Financial Accounting Standards Board issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. The amendments in this update defer the sunset date of Topic 848, which applies to entities which have transactions that reference LIBOR or other reference rates which are expected to be discontinued due to reference rate reform, until December 31, 2024. The Company is currently in the process of evaluating the impact of this amendment on its consolidated financial statements.


5.    REVENUE RECOGNITION

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, which requires companies to recognize revenue in a way that depicts the transfer of promised goods or services. In addition, the standard requires more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company generates revenue from four principal sources: (1) gaming (which includes retail gaming, online gaming, sports betting and racing), (2) hotel, (3) food and beverage and (4) retail, entertainment and other.

The Company determines revenue recognition through the following steps:
Identify the contract, or contracts, with the customer;
Identify the performance obligations in the contract;
Determine the transaction price;
Allocate the transaction price to performance obligations in the contract; and
Recognize revenue when or as the Company satisfies performance obligations by transferring the promised goods or services.

The amount of revenue recognized by the Company is measured at the transaction price or the amount of consideration that the Company expects to receive through satisfaction of the identified performance obligations.
14

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Retail gaming, online gaming and sports betting revenue, each as described below, contain two performance obligations. Retail gaming transactions have an obligation to honor the outcome of a wager and to pay out an amount equal to the stated odds, including the return of the initial wager, if the customer receives a winning hand. These elements of honoring the outcome of the hand of play and generating a payout are considered one performance obligation. Online gaming and sports betting represent a single performance obligation for the Company to operate contests or games and award prizes or payouts to users based on results of the arrangement. Revenue is recognized at the conclusion of each contest, wager or wagering game hand. Incentives can be used across online gaming products. The Company allocates a portion of the transaction price to certain customer incentives that create material future customer rights and are a separate performance obligation. In addition, in the event of a multi-stage contest, the Company will allocate transaction price ratably from contest start to the contest’s final stage. Racing revenue is earned through advance deposit wagering which consists of patrons wagering through an advance deposit account. Each wagering contract contains a single performance obligation.

The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered. The transaction price for racing operations, inclusive of live racing events conducted at the Company’s racing facilities, is the commission received from the pari-mutuel pool less contractual fees and obligations primarily consisting of purse funding requirements, simulcasting fees, tote fees and certain pari-mutuel taxes that are directly related to the racing operations. The transaction price for hotel, food, beverage, retail, entertainment and other is the net amount collected from the customer for such goods and services. Hotel, food, beverage, retail, entertainment and other services have been determined to be separate, stand-alone performance obligations and revenue is recognized as the good or service is transferred at the point in time of the transaction.

The following contains a description of each of the Company’s revenue streams:

Gaming Revenue

Retail Gaming

The Company recognizes retail gaming revenue as the net win from gaming activities, which is the difference between gaming inflows and outflows, not the total amount wagered. Progressive jackpots are estimated and recognized as revenue at the time the obligation to pay the jackpot is established. Gaming revenues are recognized net of certain cash and free play incentives.

Gaming services contracts have two performance obligations for those customers earning incentives under the Company’s player loyalty programs and a single performance obligation for customers who do not participate in the programs. The Company applies a practical expedient to account for its gaming contracts on a portfolio basis as such wagers have similar characteristics and the Company reasonably expects the impact on the consolidated financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from the application of an individual wagering contract. For purposes of allocating the transaction price in a wagering contract between the wagering performance obligation and the obligation associated with incentives earned under loyalty programs, the Company allocates an amount to the loyalty program contract liability based on the stand-alone selling price of the incentive earned for a hotel room stay, food and beverage or other amenity. The performance obligation related to loyalty program incentives are deferred and recognized as revenue upon redemption by the customer. The amount associated with gaming wagers is recognized at the point the wager occurs, as it is settled immediately.

Gaming revenue includes the share of VLT revenue for Bally’s Twin River and Bally’s Tiverton, in each case, as determined by each property’s respective master VLT contracts with the State of Rhode Island. Bally’s Twin River is entitled to a 28.85% share of VLT revenue on the initial 3,002 units and a 26.00% share on VLT revenue generated from units in excess of 3,002 units. Bally’s Tiverton is entitled to receive a percentage of VLT revenue that is equivalent to the percentage received by Bally’s Twin River. From July 1, 2021 through December 31, 2022, Bally’s Twin River and Bally’s Tiverton were entitled to an additional 7.00% share of revenue, as the Technology Provider, on VLTs owned by the Company. Beginning on January 1, 2023, the Company contributed all of its VLT assets to the Rhode Island Joint Venture and the Rhode Island Joint Venture, as the sole Technology Provider, is now entitled to that additional 7% of VLT revenue.

15

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Gaming revenue also includes Bally’s Twin River’s and Bally’s Tiverton’s share of table games revenue. Bally’s Twin River and Bally’s Tiverton each were entitled to an 83.5% share of table games revenue generated as of March 31, 2023 and 2022. Revenue is recognized when the wager is settled, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment. The Company records revenue from its Rhode Island operations on a net basis which is the percentage share of VLT and table games revenue received as the Company acts as an agent in operating the gaming services on behalf of the State of Rhode Island.

Gaming revenue also includes Bally’s Dover’s share of revenue as determined under the Delaware State Lottery Code from the date of its acquisition. Bally’s Dover is authorized to conduct video lottery, sports wagering, table game and internet gaming operations as one of three “Licensed Agents” under the Delaware State Lottery Code. Licensing, administration and control of gaming operations in Delaware is under the Delaware State Lottery Office and Delaware’s Department of Safety and Homeland Security, Division of Gaming Enforcement. As of March 31, 2023 and 2022, Bally’s Dover was entitled to an approximate 42% share of VLT revenue and 80% share of table games revenue. Revenue is recognized when the wager is complete, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment. The Company records revenue from its Delaware operations on a net basis, which is the percentage share of VLT and table games revenue received, as the Company acts as an agent in operating the gaming services on behalf of the State of Delaware.

Gaming revenue includes casino revenue of the Company’s other properties which is the aggregate net difference between gaming wins and losses, with deferred revenue recognized for prepaid deposits by customers prior to play, for chips outstanding and “ticket-in, ticket-out” coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the number of credits played, are charged to revenue as the amount of the progressive jackpots increase.

Online Gaming

The Company’s online gaming operates similarly to land-based casinos, generating revenue from player wagers net of payouts and incentives awarded to players.

Online gaming revenue includes the online bingo and casino revenue of Gamesys since the date of acquisition, beginning October 1, 2021. The revenue is earned from operating online bingo and casino websites, which consists of the difference between total amounts wagered by players less winnings payable to players, bonuses allocated and jackpot contributions. Online gaming revenue is recognized at the point in time when the player completes a gaming session and payout occurs. There is no significant degree of uncertainty involved in quantifying the amount of gaming revenue earned, including bonuses, jackpot contributions and loyalty points. Bonuses, jackpot contributions and loyalty points are measured at fair value at each reporting date.

Sports Betting

Sports betting involves a player wagering money on an outcome or series of outcomes. If a player wins the wager, the Company pays the player a pre-determined amount known as fixed odds. Sports betting revenue is generated through built-in theoretical margins in each sports wagering opportunity offered to players. Revenue is recognized as total wagers net of payouts made and incentives awarded to players.

The Company has entered into several multi-year agreements with third-party operators for online sports betting and iGaming market access in several jurisdictions from which the Company has received or expects to receive one-time, up front market access fees in cash or equity securities (specific to one operator agreement) and certain other fees in cash generally based on a percentage of the gross gaming revenue generated by the operator, with certain annual minimum guarantees due to the Company. The one-time market access fees received have been recorded as deferred revenue and will be recognized as gaming revenue ratably over the respective contract terms, beginning with the commencement of operations of each respective agreement. The Company recognized commissions in certain states from online sports betting and iGaming which are included in gaming revenue for the three months ended March 31, 2023 and 2022. Deferred revenue associated with third-party operators for online sports betting and iGaming market access was $4.1 million as of March 31, 2023 and December 31, 2022, and is included in “Accrued liabilities” and “Other long-term liabilities” in the condensed consolidated balance sheets.

All other revenues, including market access and B2B service revenue generated by the North America Interactive and International Interactive reportable segments, are recognized at the time the goods are sold or the service is provided.

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BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Racing

Racing revenue includes Bally’s Twin River’s, Bally’s Tiverton’s, Bally’s Arapahoe Park’s and Bally’s Dover’s share of wagering from live racing and the import of simulcast signals. Racing revenue is recognized upon completion of the wager based upon an established take-out percentage. The Company functions as an agent to the pari-mutuel pool. Therefore, fees and obligations related to the Company’s share of purse funding, simulcasting fees, tote fees, pari-mutuel taxes, and other fees directly related to the Company’s racing operations are reported on a net basis and included as a reduction to racing revenue.

Non-gaming Revenue

Non-gaming revenue consists of hotel, food, beverage, retail, entertainment and other revenue. Hotel revenue is recognized at the time of occupancy, which is when the customer obtains control through occupancy of the room. Advance deposits for hotel rooms are recorded as liabilities until revenue recognition criteria are met. Food, beverage and retail revenues are recognized at the time the goods are sold from Company-operated outlets. The estimated standalone selling price of hotel rooms is determined based on observable prices. The standalone selling price of food, beverage, retail, entertainment and other goods and services are determined based upon the actual retail prices charged to customers for those items. Cancellation fees for hotel and meeting space services are recognized upon cancellation by the customer and are included in Non-gaming revenue within our condensed consolidated statements of operations.

The estimated retail value related to goods and services provided to guests without charge or upon redemption under the Company’s player loyalty programs included in departmental revenues, and therefore reducing gaming revenues, are as follows for the three months ended March 31, 2023 and 2022:
 Three Months Ended March 31,
(in thousands)20232022
Hotel$22,435 $15,902 
Food and beverage19,474 16,710 
Retail, entertainment and other2,591 2,207 
 $44,500 $34,819 
Sales tax and other taxes collected on behalf of governmental authorities are accounted for on a net basis and are not included in revenue or operating expenses.

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BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following tables provide a disaggregation of revenue by segment (in thousands):
Three Months Ended March 31, 2023Casinos & ResortsNorth America InteractiveInternational InteractiveTotal
Gaming$233,107 $16,607 $237,181 $486,895 
Non-gaming:
Hotel47,332   47,332 
Food and beverage33,608   33,608 
Retail, entertainment and other14,739 7,755 8,391 30,885 
Total non-gaming revenue95,679 7,755 8,391 111,825 
Total revenue$328,786 $24,362 $245,572 $598,720 
Three Months Ended March 31, 2022
Gaming$217,805 $6,645 $239,252 $463,702 
Non-gaming:
Hotel26,935   26,935 
Food and beverage23,988   23,988 
Retail, entertainment and other11,242 8,582 13,822 33,646 
Total non-gaming revenue62,165 8,582 13,822 84,569 
Total revenue$279,970 $15,227 $253,074 $548,271 

Revenue included in operations from Casino Secret from the date of its acquisition, January 5, 2023, is reported in International Interactive and was $11.3 million in the three months ended March 31, 2023. Refer to Note 6 “Business Combinations” for further information.

Contract Assets and Contract Related Liabilities

The Company’s receivables related to contracts with customers are primarily comprised of marker balances and other amounts due from gaming activities, amounts due for hotel stays and amounts due from tracks and OTB locations. The Company’s receivables related to contracts with customers were $43.3 million and $44.0 million as of March 31, 2023 and December 31, 2022, respectively.

The Company has the following liabilities related to contracts with customers: liabilities for loyalty programs, advance deposits made for goods and services yet to be provided and unpaid wagers. All of the contract liabilities are short-term in nature and are included in “Accrued liabilities” in the condensed consolidated balance sheets.

Loyalty program incentives earned by customers are typically redeemed within one year from when they are earned and expire if a customer’s account is inactive for more than 12 months; therefore, the majority of these incentives outstanding at the end of a period will either be redeemed or expire within the next 12 months.

Advance deposits are typically for future banquet events, hotel room reservations and interactive player deposits. The banquet and hotel reservation deposits are usually received weeks or months in advance of the event or hotel stay. The Company holds restricted cash for interactive player deposits and records a corresponding withdrawal liability.

Unpaid wagers include the Company’s outstanding chip liability and unpaid slot, pari-mutuel and sports betting tickets.

18

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Liabilities related to contracts with customers as of March 31, 2023 and December 31, 2022 were as follows:

March 31,December 31,
(in thousands)20232022
Loyalty programs$21,727 $20,264 
Advanced deposits from customers31,421 27,956 
Unpaid wagers13,327 14,038 
Total$66,475 $62,258 

The Company recognized $5.9 million and $8.3 million of revenue related to loyalty program redemptions for the three months ended March 31, 2023 and 2022, respectively.


6.    BUSINESS COMBINATIONS

Casinos & Resorts Acquisition

Tropicana Las Vegas - On September 26, 2022, the Company completed its acquisition of Tropicana Las Vegas. The total purchase price was $148.2 million. Cash paid by the Company at closing net of $1.8 million cash acquired, was $146.4 million, excluding transaction costs. In connection with the acquisition of Tropicana Las Vegas, the Company entered into a lease arrangement with GLPI to lease the land underlying the Tropicana Las Vegas property for an initial term of 50 years at annual rent of $10.5 million.

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the Casinos & Resorts acquisition as of March 31, 2023:

(in thousands)Tropicana Las Vegas
Preliminary(2)
Total current assets$8,141 
Property and equipment, net136,116 
Right of use assets, net164,884 
Intangible assets, net(1)
5,140 
Other assets766 
Goodwill8,716 
Total current liabilities(10,268)
Lease liabilities(164,884)
Other long-term liabilities(395)
Total purchase price$148,216 
__________________________________
(1)    Intangible assets include rated player relationships, a trade name and pre-bookings of $2.6 million, $1.7 million and $0.8 million, respectively, which are being amortized on a straight-line basis over their estimated useful lives of approximately 9 years, 3 years and 2 years, respectively.
(2)    The Company recorded adjustments to the preliminary purchase price allocation during the three months ended March 31, 2023 which increased goodwill by $0.1 million

Goodwill recognized is deductible for local tax purposes and has been assigned as of the acquisition date to the Company’s Casinos & Resorts reportable segment, which includes the reporting unit expected to benefit from the synergies of the acquisition. Qualitative factors that contribute to the recognition of goodwill include an organized workforce and expected synergies from integrating the property into the Company’s casino portfolio and future development of its omni-channel strategy.

The Company incurred $0.8 million and $0.2 million of acquisition costs related to the above Casino & Resorts acquisition during the three months ended March 31, 2023 and 2022, respectively. These costs are included within “General and administrative” of the condensed consolidated statement of operations.
19

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


International Interactive Acquisition

Casino Secret - On January 5, 2023, the Company completed the acquisition of BACA Limited (“Casino Secret”), a European based online casino that offers slots, tables and live dealer games to Asian markets for total consideration of $49.3 million. Cash paid by the Company at closing net of $8.3 million cash acquired was $38.2 million, excluding transaction costs.

The following table summarizes the consideration paid and the fair values of the assets acquired and liabilities assumed in connection with the International Interactive Acquisition:
(in thousands)
Casino Secret
Preliminary
Total current assets$8,862 
Property and equipment, net50 
Right of use assets, net392 
Intangible assets, net(1)
29,471 
Goodwill18,139 
Total current liabilities(7,163)
Lease liabilities(412)
Total purchase price$49,339 
__________________________________
(1)    Casino Secret intangible assets include player relationships and trade names of $26.0 million and $3.5 million, respectively, which are both being amortized on a straight-line basis over their estimated useful lives of approximately 7 years.

Total goodwill recorded in connection with the above International Interactive Acquisition was $18.1 million, and is not deductible for local tax purposes. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill, which consist primarily of benefits from acquiring a talented technology workforce and management team experienced in the online gaming industry, and securing buyer-specific synergies expected to contribute to the Company’s omni-channel strategy which are expected to increase revenue and profits within the Company’s International Interactive reportable segment. The goodwill of the International Interactive Acquisition has been assigned, as of the acquisition date, to the Company’s International Interactive reportable segment.

The Company incurred $1.2 million of acquisition costs related to the International Interactive Acquisition during the three months ended March 31, 2023. These costs are included within “General and administrative” of the condensed consolidated statement of operations.



7.    ASSETS AND LIABILITIES HELD FOR SALE

The Company applies a criteria that must be met before an asset is classified as held for sale, including that management, with the appropriate authority, commits to a plan to sell the asset at a reasonable price in relation to its fair value and is actively seeking a buyer. The Company recognizes assets held for sale at the lower of carrying value or fair market value less costs to sell, as estimated based on comparable asset sales, offers received, or a discounted cash flow model. The Company then compares the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows do not exceed the carrying value, then an impairment charge may be recorded for any difference between fair value and the carrying value.

As of March 31, 2023 and December 31, 2022, one of the Company’s North America Interactive businesses met the criteria to be classified as assets held for sale but did not qualify as discontinued operations as it did not represent a strategic shift having a major effect on the Company’s operations and financial results.

The major classes of assets and liabilities classified as held for sale as of March 31, 2023 and December 31, 2022 are as follows:
20

BALLY’S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands)March 31, 2023December 31, 2022
Assets:
Restricted cash, prepaid expenses and other current assets$2,380 $3,756 
Goodwill9,399 9,399 
Intangible assets, net4,022 4,022 
Assets held for sale(1)
$15,801 $17,177 
Liabilities related to assets held for sale(1)(2)
$1,773 $3,409 
__________________________________
(1)    All assets and liabilities held for sale were classified as current as it’s probable the sale will be completed within one year.
(2)    Liabilities related to assets held for sale were comprised of accounts payable and accrued liabilities.

The revenues and net loss attributable to the business classified as held for sale were not significant for the three months ended March 31, 2023 and 2022.


8.    PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of March 31, 2023 and December 31, 2022, prepaid expenses and other current assets was comprised of the following:
March 31,
December 31,
(in thousands)20232022
Services and license agreements$28,755 $