Bally’s Corporation has expressed optimism for the future of The Star Entertainment Group following its strategic capital investment in the Australian casino operator.
This comes as the operator also reported its financial performance for the first quarter of 2025, noting that company-wide revenue declined by almost 5% year-over-year, largely due to its Asia interactive business divestment.
In addition, the company highlighted the completion of its transactions with The Queen Casino & Entertainment and Standard General in Q1, with CEO Robeson Reeves stating that the four additional properties have “attractive growth opportunities” and position the company for “compelling long-term growth”.
Optimism on The Star investment
In April, Bally’s committed to an AUD $300m strategic capital investment in The Star, with $100m of the investment being provided by the latter’s largest shareholder, Investment Holdings.
The $200m investment from Bally’s consists of a multi-tranche convertible note and subordinated debt instrument that could see the operator own approximately 38% of The Star upon conversion.
Of this investment, $67m has already been funded, with the remaining amount subject to various approvals.
Last month, The Star published its H1 FY25 results, reporting a normalised net revenue of $649.6m, down 25% YoY (H1 FY24: $865.7m).
Within Bally’s Q1 report, Reeves expressed a positive outlook for the Australian operator.
The CEO commented: “The opportunity to take a significant equity stake in Star and influence its future is consistent with Bally’s historical operating strategy and we are confident and optimistic that, similar to past situations, we can deploy our disciplined operating and financial practices to strengthen Star and create new value for Bally’s shareholders.”
Impact of Asia Interactive business divestiture
For its Q1 results, Bally’s reported a company-wide revenue decline of 4.7% YoY to US $589.2m (Q1 2024: $618.5m).
The decline in company-wide revenue was largely due to a drop in International Interactive revenue following the operator’s divestiture of its Asia Interactive business in the fourth quarter of last year.
International Interactive revenue decreased in this segment by 18.3% YoY to $191.7m (2024: $234.7m), while the segment’s adjusted EBITDAR dropped by 7.7% to $77.1m (2024: $83.5m).
However, Reeves noted that following the Asia Interactive business divestiture, Bally’s International Interactive operations are primarily focused on regulated European markets, which “continue to demonstrate solid growth characteristics and deliver attractive margins”.
The CEO stated that when excluding the divested markets’ revenue and recognising the licensing revenue, International Interactive revenue in Q1 rose by 7.7% YoY.
Revenue from UK operations increased by 4.9% YoY, with Reeves adding that revenues in Spain grew as well after advertising restrictions in the market were eased.
Casino and resorts revenue increased by 2.6% YoY to $351.2m (2024: $342.3m), while the segment’s adjusted EBITDAR rose by 6.3% to $95.1m (2024: $89.4m) following the addition of properties from the Queen transaction.
Bally’s also stated that the construction of a permanent Chicago casino continues with support from Gaming and Leisure Properties.
Reeves added: “Despite the macro-economic headlines as a result of trade policies, to date in the second quarter, we continue to see relative stability across our C&R operations.”
North America Interactive revenue increased by 12.5% YoY to $44.5m (2024: $40m) following the addition of the Queen interactive business and a ramp-up in its Rhode Island interactive business. Adjusted EBITDAR increased slightly but was still minus $8m (2024: minus $9.1m).
Corporate and other revenue fell to $1.5m (2024: $1.9m) while its adjusted EBITDAR declined to minus $16.5m (2024: $15.7m).
