Our content is augmented with value . Failure to do so could result in a material adverse effect on our business, financial condition and results of operations. As a result, we may encounter legal, regulatory and political challenges that are difficult or impossible to foresee and which could result in an unforeseen adverse impact on planned revenues or costs associated with the new opportunity. To enter into these foreign exchange forward contracts, the Company paid total premiums to the contract counterparties of $22.6 million. Control over the use of the identified asset means the lessee has both (i) the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use and (ii) the right to direct the use of the identified asset. If the estimated fair value of net assets acquired and liabilities assumed exceeds the purchase price, the Company records a gain on bargain purchase in earnings in the period of acquisition. However, there is a risk that any replacement branded site offered by us may not successfully retain the custom of those players, and in the event that we lose the right to use any of the Third Party Brands, our business, financial condition and results of operations may be materially adversely affected. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The increase in gaming expenses primarily attributable to the inclusion of expenses from our 2021 Acquisitions and incremental gaming expenses from our 2020 Acquisitions which contributed, in the aggregate, $269.4 million. As of December 31, 2021, 3,364,623 shares were available for grant under the 2021 Incentive Plan. ITEM 12. Degree 53, a United Kingdom ("UK")-based creative agency that specializes in multi-channel website and personalized mobile app and software development for the online gambling and sports industries. The online gambling industry is highly competitive and we expect more competitors to enter the sector. 333-228973) filed on January 25, 2019), Amendment to Employment Agreement, effective February 23, 2021, by and between Bally's Corporation and Stephen H. Capp (incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (File No. On October 5, 2021, the Company redeemed the remaining $315 million aggregate principal amount of the 2027 Notes at a redemption price of 109.074% of the principal amount using a portion of the proceeds of its Term Loan Facility (as defined herein). 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. Our business is subject to a variety of US and foreign laws, many of which are unsettled and still developing, and which could subject us to claims or otherwise harm our business across jurisdictions which could have a material adverse effect on our financial condition and results of operations. As of December 31, 2021, the contractual annual principal maturities of long-term debt, including the Revolving Credit Facility, are as follows: In connection with the acquisition of Bally's Evansville, an affiliate of GLPI agreed to acquire the real estate associated with the Evansville Casino from the Seller for $340.0 million and lease it to the Company under a master lease agreement (the "Master Lease"). All other revenues, including market access, daily fantasy sports 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. Self-insurance liabilities are estimated based on the Company's claims experience using actuarial methods to estimate the future cost of claims and related expenses that have been reported but not settled and that have been incurred but not yet reported. 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 using a cost accumulation model. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" of our. If we are unable to successfully recruit and retain qualified management personnel at our facilities or at the corporate level, our results of operations could be adversely affected. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in. The Financial Statements filed as part of this Annual Report on Form 10-K are listed in the Index to Financial Statements in "Item 8. As of December 31, 2021, the Company's borrowings under the Revolving Credit Facility did not exceed 30% and therefore, financial covenants did not apply. The fair value of the Revolving Credit Facility approximates its carrying amount as it is revolving, variable rate debt, and is also classified as a Level 1 measurement. Prior year amounts have been reclassified to conform to this new presentation. Risk Factors 13 ITEM 1B. The derecognition of the contingent consideration asset for non-cash consideration resulted in a contract termination expense of $30.0 million recorded during the fourth quarter of 2021. ITEM 9C. The Company cannot predict the manner in which such benefits or any of the other benefits described herein will be allocated or administered and the Company cannot provide assurances that it will be able to access such benefits in a timely manner or at all. We have historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period performance. As noted in Note 10 "Sinclair Agreement," on November 18, 2020, Bally's entered into a long-term strategic relationship with Sinclair. Discount rates used to determine the present value of the lease payments are based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. Our business may be harmed from cybersecurity incidents and we may be subject to legal claims if there is loss, disclosure or misappropriation of or access to our customers', business partners' or our own information or other breaches of information security. Material changes to any of the laws, rules, regulations or ordinances to which we are subject, new laws or regulations or material differences in interpretations by courts or governmental authorities could adversely affect our operating results. Jurisdictions also impose substantial tax rates on iGaming revenue. 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments. Any such change to the minimum wage could have a material adverse effect on our business, financial condition and results of operations. Further, the 2020 provision included a significant rate benefit as a result of the CARES Act, and we had a lesser benefit in the 2021 provision. 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. the employee retention credit, providing a refundable federal tax credit equal to 50% of the first $10,000 of qualified wages and benefits, including qualified medical plan contributions, paid to employees while they are not performing services after March 12, 2020 and before January 1, 2021. While many restrictions have been relaxed at this point, there are no assurances that a resurgence of future COVID-19 variants will not cause similar disruptions that existed in 2020 and 2021. Certain prior year amounts have been reclassified to conform to the current year's presentation. The Company's total lease cost under ASC 842 for the years ended December 31, 2021, 2020 and 2019 is as follows: Supplemental cash flow and other information for the year ended December 31, 2021 and 2020, related to operating leases is as follows: Cash paid for amounts included in the lease liability - operating cash flows from operating leases, Right of use assets obtained in exchange for operating lease liabilities. On February 10, 2020 and October 4, 2021, the Board approved an additional $100 million and $350 million for stock repurchases and payment of dividends, respectively. Future legislative and regulatory action, and court decisions or other governmental action, may have a material impact on our operations and financial results. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The holders of such licenses are bound to meet stringent compliance requirements relating to matters such as anti-money laundering, safer gambling, data protection, advertising and consumer rights issues. Benefit for income taxes for the years ended December 31, 2021 and 2020 was $4.4 million and $69.3 million, respectively. Increased competitive pressures may adversely affect our ability to continue to attract customers or affect our ability to compete efficiently. 333-228973) filed on January 25, 2019), Second Amendment to Master Video Lottery Terminal Contract, dated May 3, 2012, by and between the Division of Lotteries of the Rhode Island Department of Revenue (f/k/a the Division of Lotteries of the Rhode Island Department of Administration) and UTGR, Inc. (incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form S-4/A (File No. All intercompany balances and transactions have been eliminated in consolidation. Adoption is through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (a modified-retrospective approach). At December 31, 2021, the Company's cash and cash equivalents totaled $206.2 million, of which approximately 36% was held in locations outside the US where the Company has determined to establish an assertion to indefinitely reinvest undistributed earnings to support its continued expansion and investments in such foreign locations. Furthermore, the applicable gaming authority may require us to terminate the employment of any person who refuses to file appropriate applications. As a result, numerous states, including states in which we have casino properties, have passed legislation authorizing fixed-odds sports betting, and certain of our properties now offer sports wagering pursuant to state law in each case. We own and operate our proprietary software and technology stack designed to allow us to provide consumers differentiated offerings and exclusive content. Revenue included in operations from Bally's Quad Cities for the year ended December 31, 2021 was $26.8 million. Of the equity portion, approximately 50% will be targeted to be invested in passively managed securities using ETFs and the other approximately 50% will be targeted to be invested in actively managed investment vehicles. As we will operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty. Cash flows expected to be generated by the related assets are estimated over the assets' useful lives based on updated projections. Dover Downs maintained the Dover Downs Pension Plan, a non-contributory, tax qualified defined benefit pension plan that has been frozen since July 2011. 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 4,250,000 shares of the Company's common stock, decreased by the number of shares subject to awards granted under the 2015 Incentive Plan between December 31, 2020 and May 18, 2021, or 221,464 shares, plus any shares subject to awards granted under the 2021 Incentive Plan or the 2015 Incentive Plan that are added back to the share pool under the 2021 Incentive Plan pursuant to the plan's share counting rules, are authorized for issuance under the 2021 Incentive Plan. 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 years ended December 31, 2021, 2020 and 2019: 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. On September 26, 2019, prior to the Company's acquisition of Gamesys, Gamesys (Holdings) Limited ("GHL") was acquired by JPJ Group plc ("JPJ") and subsequently renamed Gamesys. LEARN MORE International Interactive Bally's digital division is a portfolio of top disruptor brands in sports betting, iGaming, free-to-play gaming, poker, and daily fantasy sports. In connection with the acquisition of Bally's Evansville casino operations, the Company entered into a sale-leaseback arrangement with an affiliate of GLPI for the Bally's Dover property. The Company functions as an agent to the pari-mutuel pool. The provision of convenient, trusted, fast and effective payment processing services to our customers and potential customers is critical to our business. Our properties began to reopen in mid-2020 in some capacity and remained open for the rest of 2020, with the exception of Bally's Twin River and Bally's Tiverton which closed again for a period from November to December 2020. , a sportsbook and iCasino platform provider and operator; , an iCasino and online bingo platform provider and operator; , a games content aggregation business; and. We or certain third parties that we rely on may fail to establish and maintain effective and compliant anti-money laundering, counter terrorism financing, safer gambling, fraud detection, risk management and other regulatory policies, procedures and controls. IGT will own 60% of the joint venture. Our branded sites are heavily reliant on well-known brands owned by third parties. We cannot assure you that we will be able to obtain additional equity or debt financing on favorable terms or at all. In connection with the termination of the prior credit agreement and the 2027 Notes, the Company recorded a loss on extinguishment of debt of $103.0 million during the year ended December 31, 2021. As of December 31, 2021, we had approximately 9,460 employees. In addition, there may be issues related to this infrastructure that are not identified during the testing phases of design and implementation, which may only become evident after we have started to fully use the underlying equipment or software, that could further degrade the user experience or increase our costs. We are a global gaming, hospitality and entertainment company with a portfolio of casinos and resorts and online gaming businesses. The fair value of the assets acquired and liabilities assumed exceed the purchase price consideration and therefore, a bargain purchase gain of $32.6 million was recorded during the year ended December 31, 2020 included within "Gain on bargain purchases" in the consolidated statements of operations. The principal assumptions used to determine net periodic pension benefit cost and benefit obligation under the Dover Downs Pension Plan consist of the following: The Company utilizes a spot rate approach to determine the benefit obligation and the subsequent years' interest cost component of the net periodic pension benefit. The sale of alcoholic beverages is subject to licensing, control and regulation by applicable local regulatory agencies. These aggregate contributions were not individually significant to any of the respective plans. Japan has been a focus of our international interactive segment and has yet to introduce its own licensing regime applicable to our business. (1) Non-operating income (expense) includes: (i) change in value of naming rights liabilities and (ii) gain on bargain purchase. We believe Bally Sports represents the future of sports fandom. In addition, any such renovations and capital improvements usually generate little or no cash flow until the projects are completed. Seasonal weather conditions can frequently adversely affect transportation routes to each of our properties and may cause flooding and other effects that result in the closure of our properties. We conducted our audit in accordance with the standards of the PCAOB. Our operations in other states are generally subject to significant revenue-based taxes and fees in addition to normal federal, state and local income taxes, and such taxes and fees are subject to increase at any time. We are further investing in the Bally technology and product platform to achieve our vision of a seamless player journey between offline and online gaming and entertainment worlds that recognize and reward players through their entire lifetime whether in our casinos and resorts or online in any of our gaming and entertainment offerings. The benefits of the CARES Act that were available to us included: The Company realized a tax benefit of $5.3 million and $33.3 million in the years ended December 31, 2021 and 2020, respectively. "Risk Factors" of Bally's Annual Report on Form 10-K for the fiscal year ended December 31 . Gaming authorities in the US generally can require that any beneficial owner of our securities file an application for a finding of suitability. Renovations and other capital improvements of casino properties in particular require significant capital expenditures. Additionally, the increasing presence of viruses and cyber-attacks may affect the viability and infrastructure of the Internet and/or the proper functioning of our network systems and could materially adversely affect our business, financial condition and results of operations. Under the Hard Rock License agreement which runs through September 2025, with the option to renew for two successive ten-year terms, the Company is obligated to pay an annual fee plus fees based on non-gaming revenues. Furthermore, the gaming authorities may require us to terminate the employment of any person who refuses to file appropriate applications. Items that are generally considered include, but are not limited to, the following: macroeconomic conditions, industry and market conditions and overall financial performance. As a result, we rely on such third parties to provide uninterrupted services in order to run our business efficiently and effectively. Either result could adversely affect our gaming operations. Non-gaming expenses include hotel, food and beverage and retail, entertainment and other expenses. Our casino and hotel properties have an ongoing need for renovations and other capital improvements to remain competitive, including room refurbishments, amenity upgrades and replacement, from time to time, of furniture, fixtures and equipment. The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The following table presents, for the periods indicated, certain revenue and income items: The following table presents, for the periods indicated, certain income and expense items expressed as a percentage of total revenue: Gaming, hotel, food and beverage, retail, entertainment and other expenses, Interest expense, net of amounts capitalized, Change in value of naming rights liabilities, (Loss) income before provision for income taxes. the effectiveness of current measures to prevent illegal underage gambling and consideration of what extra protections may be needed for young adults in the 18-25 age bracket. Therefore, such transactions are in fact heavily regulated but are not themselves regulated in the jurisdiction within which the player is ultimately located. In addition, each restaurant we operate must obtain a food service license from local authorities. Therefore, some "liberalized" regulatory regimes are considerably more economically viable than others. 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