WHAT IMPACT BALLY’S FINANCIAL PROBLEMS AFFECT SAM’S TOWN PURCHASE

On July 17  the Louisiana Gaming Control Board unanimously approved Bally’s Corporation's purchase of Sam’s Town Hotel and Casino in Shreveport.
 
Additionally, the Board approved the name change of the casino and hotel to Bally’s Shreveport North.
 
The Bally’s chairman stated that “we see meaningful opportunities to reinvest in the market and further strengthen Shreveport’s position as a premier destination for gaming and entertainment.”
 
A headline in yesterday’s (Sept. 2) Wall Street Journal on the front page of the Business & Finance section, reads: “Bally’s Bet Comes Under Pressure.”
 
The article reads:
 
“Bally’s has been piling its chips higher than ever on a bet that bricks-and-mortar casinos can thrive even as gaming moves onto phones and computer screens.
 
Now that stack is wobbling”
 
Gaming America reports that Bally’s credit picture has deteriorated and that Fitch rates the company B-minus, six notches into junk territory and only one rung above a rating that implies substantial default risk.
 
Bally’s warned in a quarterly statement that unless it secured new financing or completed other planning transactions, it might violate liquidity and leverage requirements under its revolving credit line.
 
Bally’s officials, according to the Wall Street Journal, stated that accounting rules have led to these issues.
 
Bally’s credit issues will undoubtedly impact its ability to borrow substantial sums to renovate the Sam’s Town hotel and casino. Thus the hoped for boom this acquisition would create on Clyde Fant Parkway may not become a reality.