BALLY’S CORP MANAGEMENT REPORT AND DISCUSSION OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

Caution Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of the securities laws. Forward-looking statements are statements as
to matters that are not historical facts, and include statements about our
plans, objectives, expectations and intentions.

Forward-looking statements are not guarantees and are subject to risks and
uncertainties. Forward-looking statements are based on our current expectations
and assumptions. Although we believe that our expectations and assumptions are
reasonable at this time, they should not be regarded as representations that our
expectations will be achieved. Actual results may vary materially.
Forward-looking statements speak only as of the time of this report and we do
not undertake to update or revise them as more information becomes available,
except as required by law.

Important factors beyond those that apply to most businesses, some of which are
beyond our control, that could cause actual results to differ materially from
our expectations and assumptions include, without limitation:

•unforeseen costs, integration difficulties and other events affecting our recently completed and proposed acquisitions and our ability to realize the anticipated benefits;

•risks associated with our rapid growth, including those affecting customer and employee retention, onboarding and controls;

•risks associated with the impact of the digitization of gaming on our casino operations, our expansion into iGaming and sports betting and the highly competitive and rapidly changing aspects of our business generally;

• uncertainties surrounding the COVID-19 pandemic, including limitations on our operations, increased costs, changes in customer behavior, the impact on our employees, and the continued impact of COVID-19 on conditions general economics

•the very significant regulatory constraints applicable to us, including compliance costs;

•restrictions and limitations in agreements to which we are subject, including our indebtedness; and

•other risks identified in Part I. Item 1A. "Risk Factors" of Bally's Annual
Report on Form 10-K for the fiscal year ended December 31, 2021 as filed with
the SEC on March 1, 2022 and other filings with the SEC.

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.

You should not place undue reliance on our forward-looking statements.

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Insight

We are a global gaming, hospitality and entertainment company with a portfolio
of casinos and resorts and online gaming businesses. We provide our customers
with physical and interactive entertainment and gaming experiences, including
traditional casino offerings, iCasino, online bingo, sportsbook, daily fantasy
sports ("DFS") and free-to-play ("F2P") games.

As of September 30, 2022, we own and manage 15 land-based casinos and one horse
racetrack in ten states across the United States ("US") operating under Bally's
brand. Our land-based casino operations include approximately 14,400 slot
machines, 600 table games and 5,300 hotel rooms, along with various restaurants,
entertainment venues and other amenities. Certain of our properties are leased
under a master lease agreement with Gaming and Leisure Properties, Inc.
("GLPI"), a publicly traded gaming-focused real estate investment trust
("REIT"). With our acquisition of London-based Gamesys Group Ltd. ("Gamesys") on
October 1, 2021, we expanded our geographical and product footprints to include
an iGaming business with well-known brands providing iCasino and online bingo
experiences to our global online customer base with concentrations in Europe and
Asia and a growing presence in North America. Our iCasino and online bingo
platforms and games content, sportsbook and F2P games are provided on a
business-to-business ("B2B") as well as a business-to-consumer ("B2C") basis.
Our revenues are primarily generated by these gaming and entertainment
offerings. We own and operate our proprietary software and technology stack
designed to allow us to provide consumers differentiated offerings and exclusive
content.

Our strategy and business developments

We seek to continue to grow our business by actively pursuing the acquisition
and development of new gaming opportunities and reinvesting in our existing
operations. We believe that interactive gaming represents a significant
strategic opportunity for the future growth of Bally's. We seek to increase
revenues at our casinos and resorts through enhancing the guest experience by
providing popular games, restaurants, hotel accommodations, entertainment and
other amenities in attractive surroundings with high-quality guest service. We
believe that our recent acquisitions have expanded and diversified us from
financial and market exposure perspectives, while continuing to mitigate our
susceptibility to regional economic downturns, idiosyncratic regulatory changes
and increases in regional competition.

In 2021, we acquired three casino and resort properties - Bally's Lake Tahoe,
Bally's Evansville and Bally's Quad Cities. We also announced plans to construct
a land-based casino in Centre County, Pennsylvania, adding to our land-based
casino presence. In 2022, we signed an agreement with the City of Chicago to
develop a destination casino resort in downtown Chicago, Illinois and we
completed the acquisition of Tropicana Las Vegas. Upon the completion of
construction in both Centre County, Pennsylvania and Chicago, Illinois, we will
own and manage 17 land-based casinos across 11 states.

In addition, we have also expanded our interactive activity by:

•launching our Bally Sports Network through our partnership with Sinclair, which
combines our sports betting technology with Sinclair's expansive footprint. With
Bally's brand, the media partnership and the unencumbered skins (gaming
licenses) that we have acquired and reserved in our portfolio, we can now
provide our customers omni-channel gaming and entertainment across our various
physical properties while having a singular online and mobile presence with a
brand that is synonymous with gaming, hospitality and entertainment;

•the acquisition of Gamesys, one of the main international operators of online games which offers entertainment games to a global clientele; and

•acquiring Bally's Interactive, formerly Bet.Works, and its proprietary
technology stack and turnkey solutions, which include marketing, operations,
customer service, risk management and compliance. We believe that the Bet.Works
acquisition provides us with a suite of advanced omni-channel products,
platforms, software and content solutions positioning us to deliver competitive
sports betting and iCasino offerings to customers on a national scale. These
steps have positioned us to become a leading, full-service, vertically
integrated sports betting and iGaming company in the US with physical casinos
and online gaming solutions united under a single, leading brand.

Acquisition of Gamesys

On October 1, 2021, we acquired Gamesys, a leading UK-based global online gaming
operator. In connection with the acquisition, Gamesys shareholders received, in
the aggregate, 9,773,537 shares of our common stock and $2.08 billion in cash.

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We believe that Gamesys' proven technology platform will foster our continued
buildout of our interactive offerings in North America, including real-money
gaming options in online sports betting and iGaming. Additionally, unifying
Bally's and Gamesys' player databases and technologies provides us with one of
the largest portfolios of omni-channel cross-selling opportunities, consisting
of land-based gaming, online sports betting, iCasino, poker, bingo, daily
fantasy sports and free-to-play games. We believe that these offerings, coupled
with our media partnership with Sinclair Broadcast Group, position the Company
to capitalize on significant growth opportunities in the rapidly expanding US
online entertainment and sports betting markets.

Operating structure

Our business is organized into three segments to present: (1) Casinos and resorts(2) North America Interactive and (3) International Interactive.

Casinos & Resorts - includes our 15 land-based casino properties and one horse
racetrack:

                           Property Name                                             Location
Bally's Atlantic City Casino Resort ("Bally's Atlantic City")              Atlantic City, New Jersey
Bally's Black Hawk                                                         Black Hawk, Colorado
Bally's Dover Casino Resort ("Bally's Dover")                              Dover, Delaware
Bally's Evansville Casino & Hotel ("Bally's Evansville")                   Evansville, Indiana
Bally's Kansas City Casino ("Bally's Kansas City")(1)                      Kansas City, Missouri
Bally's Lake Tahoe Casino Resort ("Bally's Lake Tahoe")                    Lake Tahoe, Nevada
Bally's Quad Cities Casino & Hotel ("Bally's Quad Cities")                 Rock Island, Illinois
Bally's Shreveport Casino & Hotel ("Bally's Shreveport")                   Shreveport, Louisiana
Bally's Tiverton Casino & Hotel ("Bally's Tiverton")                       Tiverton, Rhode Island
Bally's Twin River Lincoln Casino Resort ("Bally's Twin River")            Lincoln, Rhode Island
Bally's Vicksburg Casino ("Bally's Vicksburg")                             Vicksburg, Mississippi
Hard Rock Hotel & Casino Biloxi ("Hard Rock Biloxi")                       Biloxi, Mississippi
Tropicana Las Vegas Casino and Resort ("Tropicana Las Vegas")              Las Vegas, Nevada
Bally's Arapahoe Park                                                      Aurora, Colorado

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(1) Composed of three casinos: at Bally’s Casino Black Hawk North,
at Bally’s Casino Black Hawk West and at Bally’s Black Hawk East Casino.

North America Interactive - includes the following North America businesses:
•Bally's Interactive, a business-to-business-to-consumer ("B2B2C") sportsbook
and iCasino platform provider and operator;
•Horses Mouth Limited ("SportCaller"), a B2B and F2P game provider for sports
betting companies;
•Monkey Knife Fight ("MKF"), a B2C DFS platform and operator;
•Joker Gaming, known as Live at the Bike, an online subscription streaming
service featuring livestream and on-demand poker videos and podcasts;
•Association of Volleyball Professionals ("AVP"), a professional beach
volleyball organization and host of the longest-running domestic beach
volleyball tour;
•Telescope, Inc. ("Telescope"), a provider of real-time audience engagement
solutions for live events, gamified second screen experiences and interactive
livestreams; and
•Degree 53, a United Kingdom ("UK")-based creative agency that specializes in
multi-channel website and personalized mobile app and software development for
online gambling and sports industries.

The North America Interactive reportable segment also includes Gamesys’ North American operations.

International Interactive - includes the following businesses in Europe and
Asia:
•Gamesys, a B2B2C iCasino and online bingo platform provider and operator; and
•Solid Gaming, a games content aggregation business.

Refer to Note 18 “Segment reporting” to our condensed consolidated financial statements for more information on our segment reporting structure.

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Rhode Island Regulatory Agreement

On February 17, 2022, certain of our subsidiaries, the Rhode Island Department
of Business Regulation ("DBR") and the Division of Lotteries ("DoL") of the
Rhode Island Department of Revenue amended and restated our Regulatory Agreement
(the "Regulatory Agreement"). The Regulatory Agreement contains financial and
other covenants that, among other things, (1) restrict the acquisition of stock
and other financial interests in us, (2) relate to the licensing and composition
of members of our management and Board of Directors (the "Board"), (3) prohibit
certain competitive activities and related-party transactions and (4) restrict
our ability to declare or make restricted payments (including dividends), incur
additional indebtedness or take certain other actions, if our leverage ratio
exceeds 5.50 to 1.00 (in general being gross debt divided by Adjusted EBITDA,
each as defined in the Regulatory Agreement).

The Regulatory Agreement also provides affirmative obligations, including
setting a minimum number of employees that we must employ in Rhode Island and
providing the DBR and DoL with periodic information updates about us. Among
other things, the Regulatory Agreement prohibits us and our subsidiaries from
owning, operating, managing or providing gaming specific goods and services to
any properties in Rhode Island (other than Bally's Twin River and Bally's
Tiverton), Massachusetts, Connecticut or New Hampshire. A failure to comply with
the Regulatory Agreement could subject us to injunctive or monetary relief,
payments to the Rhode Island regulatory agencies and ultimately the revocation
or suspension of our licenses to operate in Rhode Island.

In addition, our master contracts with Rhode Island were extended through June
30, 2043, and allow for consolidation of promotional points between Bally's Twin
River and Bally's Tiverton, obligate Bally's Twin River to build a 50,000 square
foot expansion, obligate Bally's Twin River to lease at least 20,000 square feet
of commercial space in the city of Providence, and commit us to invest $100
million in Rhode Island over this extended term, including an expansion and the
addition of new amenities at Bally's Twin River. June 2021 legislation enacted
in Rhode Island authorized a joint venture with International Gaming Technology
PLC ("IGT") to become a licensed technology provider and supply the State of
Rhode Island with all Video Lottery Terminals ("VLTs") at both Bally's Twin
River and Bally's Tiverton for a 20.5-year period starting January 1, 2023. IGT
will own 60% of the joint venture. As of July 1, 2021, until the joint venture
is operating, we will supply 23% of all VLTs in return for 7% net terminal
income from the machines.

Covid-19 pandemic

The COVID-19 pandemic significantly impacted, and could continue to impact, our
business in a material manner. Currently, all of our properties are open and
operating with minimal restrictions. The pandemic and its consequences
dramatically reduced travel and demand for hotel rooms and other casino resort
amenities, which had a negative impact on our results. While many restrictions
have been relaxed at this point, there is no assurance that a resurgence of
future COVID-19 variants will not cause disruption to our business, including
the closure of our facilities. In addition, future demand for gaming activities
may be negatively impacted by the adverse changes in the perceived or actual
economic climate due to the impact of the COVID-19 pandemic. Our business could
also be impacted if the disruptions from the COVID-19 pandemic impact
construction projects, including our projects in Centre County, Pennsylvania and
Chicago, Illinois, described above.

Key performance indicators

The main key performance indicator used in managing our business is Adjusted
EBITDA. Adjusted EBITDA is defined as earnings for the Company, or where noted
its reporting segments, before, in each case, interest expense, net of interest
income, provision (benefit) for income taxes, depreciation and amortization,
non-operating income, acquisition, integration and restructuring expense,
share-based compensation, and certain other gains or losses as well as, when
presented for our reporting segments, an adjustment related to the allocation of
corporate cost among segments.

We use Adjusted EBITDA to analyze the performance of our business and it is used
as a determining factor for performance based compensation for members of our
management team. 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. Also, we present Adjusted EBITDA because it is
used by some investors and creditors as an indicator of the strength and
performance of ongoing business operations, including our ability to service
debt, and to fund capital expenditures, acquisitions and operations. These
calculations are commonly used as a basis for investors, analysts and credit
rating agencies to evaluate and compare operating performance and value
companies within our industry. Adjusted EBITDA information is presented because
management believes that it is a commonly used measure of performance in the
gaming industry and that it is considered by many to be a key indicator of our
operating results.
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Adjusted EBITDAR is used outside of our financial statements solely as a
valuation metric. Adjusted EBITDAR is defined as Adjusted EBITDA (as defined
above) for our Casinos & Resorts segment plus rent expense associated with
triple net operating leases. Management believes Adjusted EBITDAR is an
additional metric traditionally used by analysts in valuing gaming companies
subject to triple net leases since it eliminates the effects of variability in
leasing methods and capital structures. This metric is included as supplemental
disclosure because (i) we believe Adjusted EBITDAR is traditionally used by
gaming operator analysts and investors to determine the equity value of gaming
operators and (ii) Adjusted EBITDAR is one of the metrics used by other
financial analysts in valuing our business. We believe Adjusted EBITDAR is
useful for equity valuation purposes because (i) its calculation isolates the
effects of financing real estate, and (ii) using a multiple of Adjusted EBITDAR
to calculate enterprise value allows for an adjustment to the balance sheet to
recognize estimated liabilities arising from operating leases related to real
estate.

Adjusted EBITDA and Adjusted EBITDAR should not be construed as an alternative
to GAAP net income, the most directly comparable GAAP measure, as an indicator
of our performance. In addition, Adjusted EBITDA and Adjusted EBITDAR as used by
us may not be defined in the same manner as other companies in our industry,
and, as a result, may not be comparable to similarly titled non-GAAP financial
measures of other companies. Adjusted EBITDAR should not be viewed as a measure
of overall operating performance or considered in isolation or as an alternative
to net income because it excludes the rent expense associated with our triple
net operating leases with GLPI and the lease for real estate and land underlying
the operations of the Bally's Lake Tahoe property.

Beginning in the third quarter ended September 30, 2022, we have revised our
calculation of Adjusted EBITDA to exclude adjustments for launch costs and
preopening expenses. Tables reflected below within "Adjusted EBITDA and Adjusted
EBITDAR by Segment" have been revised to reflect this new presentation.

Results for the third quarter and the first nine months of 2022

We reported revenue and income from operations of $578.2 million and $53.7
million, respectively, for the three months ended September 30, 2022, compared
to revenue and income from operations of $314.8 million and $27.7 million,
respectively, for the same period last year. We reported revenue and income from
operations of $1.68 billion and $161.5 million, respectively, for the nine
months ended September 30, 2022, compared to revenue and income from operations
of $774.8 million and $137.7 million, respectively, for the same period last
year. Our properties are at full capacity and are operating under minimal
restrictions and we have seen an increase in consumer confidence, which
contributed to such increases. In addition, the increases include incremental
revenues and income from our recent acquisitions.

Operating results

The following table presents, for the periods indicated, certain revenue and revenue items:

                                          Three Months Ended September 30,              Nine Months Ended September 30,
(in millions)                                 2022                    2021                 2022                  2021
Total revenue                         $           578.2          $     314.8          $    1,679.0          $     774.8
Income from operations                             53.7                 27.7                 161.5                137.7
Net income (loss)                                   0.6                (57.6)                 62.0                  0.6



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The following table presents, for the periods indicated, certain revenue and expense items expressed as a percentage of total revenue:

                                                        Three Months Ended September 30,                 Nine Months Ended September 30,
                                                          2022                    2021                     2022                    2021
Total revenue                                                100.0  %                100.0  %                 100.0  %                100.0  %
Gaming, hotel, food and beverage, retail,
entertainment and other expenses                              43.4  %                 37.5  %                  45.3  %                 35.4  %
Advertising, general and administrative                       33.2  %                 44.6  %                  33.1  %                 41.6  %
Goodwill and asset impairment                                    -  %                    -  %                     -  %                  0.6  %
Gain on sale-leaseback, net                                      -  %                    -  %                  (3.0) %                 (6.9) %
Other operating costs and expenses                             1.4  %                 (0.2) %                   1.5  %                  2.8  %
Depreciation and amortization                                 12.8  %                  9.2  %                  13.6  %                  8.7  %
Total operating costs and expenses                            90.7  %                 91.2  %                  90.4  %                 82.2  %
Income from operations                                         9.3  %                  8.8  %                   9.6  %                 17.8  %
Other income (expense)
Interest income                                                  -  %                  0.2  %                     -  %                  0.2  %
Interest expense, net of amounts capitalized                  (9.3) %                (10.1) %                  (8.7) %                 (9.6) %
Change in value of naming rights liabilities                     -  %                  2.2  %                   2.0  %                 (0.2) %
Gain on bargain purchases                                        -  %                 (0.3) %                     -  %                  3.0  %
Loss on extinguishment of debt                                   -  %                 (6.2) %                     -  %                 (2.5) %
Foreign exchange gain (loss)                                     -  %                (13.6) %                   0.1  %                 (5.6) %
Other, net                                                     0.2  %                 (1.0) %                   0.7  %                 (0.8) %
Total other income (expense), net                             (9.0) %                (28.8) %                  (5.9) %                (15.5) %
Income (loss) before income taxes                              0.3  %                (20.0) %                   3.8  %                  2.2  %
Provision (benefit) for income taxes                           0.2  %                 (1.7) %                   0.1  %                  2.2  %
Net income (loss)                                              0.1  %                (18.3) %                   3.7  %                  0.1  %

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Note: Amounts in the table may not be subtotals due to rounding.

Sector performance

During the fourth quarter of 2021, the Company updated its reportable segments
to better align with its strategic growth initiatives in light of recent
acquisitions. As a result of this realignment, the Company determined it had
three reportable segments: Casinos & Resorts, North America Interactive and
International Interactive. Additionally, during the first quarter of 2022 as a
result of the segment realignment, the Company changed its methodology for
allocating certain corporate operating expenses within advertising, general and
administrative expense previously reported in "Other" to directly apply such
costs to the segment supported. Prior year amounts have been reclassified to
conform to the new segment presentation.

The following table sets forth certain financial information associated with
results of operations for the three and nine months ended September 30, 2022 and
2021. Non-gaming revenue includes hotel, food and beverage and retail,
entertainment and other revenue. Non-gaming expenses include hotel, food and
beverage and retail, entertainment and other expenses. All amounts are before
any allocation of corporate costs.

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                                                        Three Months Ended                                Nine Months Ended
                                                          September 30,                                     September 30,
(in thousands, except percentages)          2022               2021             $ Change                    2022                2021             $ Change
Revenue:
Gaming
Casinos & Resorts                       $ 237,951          $ 229,034          $   8,917                $   681,472          $ 590,162          $  91,310
North America Interactive                  10,567              2,764              7,803                     25,080              4,404             20,676
International Interactive                 217,215                  -            217,215                    677,971                  -            677,971

Total Gaming revenue                      465,733            231,798            233,935                  1,384,523            594,566            789,957
Non-gaming
Casinos & Resorts                          90,589             74,336             16,253                    226,913            164,829             62,084
North America Interactive                  11,563              8,645              2,918                     30,327             15,383             14,944
International Interactive                  10,364                  -             10,364                     37,253                  -             37,253

Total Non-gaming revenue                  112,516             82,981             29,535                    294,493            180,212            114,281
Total revenue                           $ 578,249          $ 314,779          $ 263,470                $ 1,679,016          $ 774,778          $ 904,238
Operating costs and expenses:
Gaming
Casinos & Resorts                       $  78,229          $  76,948          $   1,281                $   233,324          $ 187,093          $  46,231
North America Interactive                  12,462              1,449             11,013                     34,263              1,908             32,355
International Interactive                 106,505                  -            106,505                    352,872                  -            352,872

Total Gaming expenses                     197,196             78,397            118,799                    620,459            189,001            431,458
Non-gaming
Casinos & Resorts                          37,691             33,568              4,123                    102,354             78,387             23,967
North America Interactive                   7,779              6,066              1,713                     12,125              6,933              5,192
International Interactive                   8,024                  -              8,024                     26,036                  -             26,036

Total Non-gaming expenses                  53,494             39,634             13,860                    140,515             85,320             55,195
Advertising, general and administrative
Casinos & Resorts                         108,076            102,776              5,300                    311,239            248,420             62,819
North America Interactive                  21,899             22,054               (155)                    72,965             27,616             45,349
International Interactive                  36,737                  -             36,737                    104,064                  -            104,064
Other                                      25,241             15,670              9,571                     67,008             46,174             20,834
Total Advertising, general and
administrative                          $ 191,953          $ 140,500          $  51,453                $   555,276          $ 322,210          $ 

233,066

Margins:

Gaming expenses as a percentage of
Gaming revenue                                 42  %              34  %                                         45  %              32  %
Non-gaming expenses as a percentage of
Non-gaming revenue                             48  %              48  %                                         48  %              47  %
Advertising, general and administrative
as a percentage of Total revenue               33  %              45  %                                         33  %              42  %



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Three and nine months ended September 30, 2022 Compared to the three and nine month periods ended September 30, 2021

Total revenue

Total revenue for the three and nine months ended September 30, 2022 and 2021 included the following (in thousands):

                                                        Three Months Ended September 30,                                                    Nine 

Months ended September 30,

                                        2022                  2021             $ Change            % Change                2022                 2021             $ Change            % Change
Gaming                           $    465,733             $ 231,798          $ 233,935                 100.9  %       $  1,384,523          $ 594,566          $ 789,957                 132.9  %
Hotel                                  45,675                32,903             12,772                  38.8  %            106,539             68,277             38,262                  56.0  %
Food and beverage                      31,724                29,504              2,220                   7.5  %             83,147             68,386             14,761                  21.6  %
Retail, entertainment and other        35,117                20,574             14,543                  70.7  %            104,807             43,549             61,258                 140.7  %
Total revenue                    $    578,249             $ 314,779          $ 263,470                  83.7  %       $  1,679,016          $ 774,778          $ 904,238                 116.7  %



Revenue for the three months ended September 30, 2022 increased 83.7%, or $263.5
million, to $578.2 million, from $314.8 million in the same period last year.
Revenue for the nine months ended September 30, 2022 increased 116.7%, or $904.2
million, to $1.68 billion, from $774.8 million in the same period last year. We
saw gaming, hotel, food and beverage, and retail, entertainment and other
revenues grow, as we were able to operate with less restrictions across our
properties compared to the prior year periods resulting from developments in the
COVID-19 pandemic and an increase in consumer confidence.

Incremental revenues from our acquisitions that closed in 2021, which included
Bally's Evansville, Bally's Lake Tahoe, Bally's Quad Cities, Gamesys, and the
majority of the North America Interactive acquisitions (collectively, the "2021
Acquisitions"), drove the increase in revenue year over year, contributing
$232.4 million and $845.5 million to total revenue in the three and nine months
ended September 30, 2022, respectively. Refer to Note 5 "  Acquisitions  " for
further information on our recent acquisitions.

Operating costs and expenses

In the three months ended September 30, 2022, we recorded total operating costs
and expenses of $524.6 million, up $237.5 million, or 82.8%, from $287.0 million
in the same period last year. Total operating costs and expenses for the nine
months ended September 30, 2022 increased $880.5 million, or 138.2%, to $1.52
billion, from $637.0 million in the same period last year.

The change in total operating costs and expenses was driven by fluctuations in
our gaming and non-gaming expenses, advertising general and administrative
costs, acquisition, integration and restructuring expenses and other operating
costs and expenses, each described below. We expect our total operating costs
and expenses to continue to increase in 2022 as compared to 2021 as a result of
the inclusion of our recent acquisitions, most notably, Gamesys.

Game and off-game fees

Gaming and racing expenses for the three months ended September 30, 2022
increased $118.8 million, or 151.5%, to $197.2 million from $78.4 million in the
prior year comparable period and increased $431.5 million, or 228.3%, to $620.5
million for the nine months ended September 30, 2022 from $189.0 million in the
prior year comparable period. These increases were primarily attributable to the
inclusion of expenses from our 2021 Acquisitions which contributed, in the
aggregate, $116.8 million and $416.3 million, during the three and nine months
ended September 30, 2022, respectively.

Non-gaming expenses for the three months ended September 30, 2022 increased
$13.9 million, or 35.0%, to $53.5 million from $39.6 million in the same period
last year. Non-gaming expenses for the nine months ended September 30, 2022
increased $55.2 million, or 64.7%, to $140.5 million from $85.3 million in the
same period last year. These increases were primarily attributable to the
inclusion of expenses from our 2021 Acquisitions which contributed, in the
aggregate, $11.7 million and $44.6 million, during the three and nine months
ended September 30, 2022, respectively.

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Publicity, general and administrative

Advertising, general and administrative expenses for the three months ended
September 30, 2022 increased $51.5 million, or 36.6%, to $192.0 million from
$140.5 million in the same period last year. Advertising, general and
administrative expenses for the nine months ended September 30, 2022 increased
$233.1 million, or 72.3%, to $555.3 million from $322.2 million in the same
period last year. These increases were primarily attributable to the inclusion
of expenses from our 2021 Acquisitions which contributed, in the aggregate,
$37.2 million and $192.2 million, during the three and nine months ended
September 30, 2022, respectively.

Acquisition, integration and restructuring costs

We incurred $9.3 million and $24.7 million of acquisition, integration and
restructuring expenses during the three and nine months ended September 30,
2022, respectively, compared to $6.8 million and $37.5 million in the prior year
three and nine month periods, respectively. The decrease in expense year over
year is driven by a reduction in Gamesys acquisition and integration costs
offset by an increase in costs attributable to Bally's Chicago. Refer to Note 11
"  Acquisition, Integration and Restructuring  " for further information.

Other (income), expenses and operating expenses

During the three and nine months ended September 30, 2022, we recorded a gain
from insurance recoveries, net of losses of $1.3 million and $1.4 million,
respectively, primarily attributable to insurance recoveries related to prior
litigation matters. During the three and nine months ended September 30, 2021,
the Company recorded a gain from insurance recoveries, net of losses of $7.9
million and $19.2 million, respectively, primarily attributable to insurance
proceeds received due to the effects of Hurricane Zeta.

The Company recorded rebranding expenses of $0.1 million and $0.4 million during
the three months ended September 30, 2022 and 2021, respectively, and $0.5
million and $1.7 million during the nine months ended September 30, 2022 and
2021, respectively. During the nine months ended September 30, 2021, we also
recorded asset impairment charges of $4.7 million related to the Dover Downs and
Bally's Black Hawk trade names in connection with our rebranding.

Additionally, during the nine months ended September 30, 2022, we sold our
Bally's Black Hawk and Bally's Quad Cities properties to GLPI and recorded a
gain on sale-leaseback of $50.8 million. During the nine months ended September
30 2021, we sold our Bally's Dover property to GLPI and recorded a gain on
sale-leaseback of $53.4 million.

Depreciation and amortization

Depreciation and amortization for the three months ended September 30, 2022 was
$73.9 million, an increase of $44.9 million, and $227.5 million for the nine
months ended September 30, 2022, an increase of $160.0 million, each compared to
the same period last year. The increase in depreciation and amortization is
attributable to the inclusion of our 2021 acquisitions, which contributed an
aggregate of $46.3 million and $154.7 million in the three and nine months ended
September 30, 2022, respectively.

Income from operations

Income from operations was $53.7 million for the three months ended September
30, 2022, compared to $27.7 million in the comparable period in 2021. Income
from operations was $161.5 million for the nine months ended September 30, 2022
compared to $137.7 million in 2021. These changes year-over-year were driven by
revenue growth resulting from a return in visitation to our properties as
COVID-19 restrictions were lifted coupled with a benefit from our 2021
Acquisitions, offset by increased operating expenses.

Other income (expenses)

Total other expense for the three months ended September 30, 2022 was $51.9
million, compared to $90.8 million in the same period last year. This change was
driven mainly by a decrease in foreign currency losses of $43.1 million and a
loss on extinguishment of debt of $19.4 million incurred during the three months
ended September 30, 2022, offset by an increase in interest expense of $21.9
million.

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Total other expense for the nine months ended September 30, 2022 decreased $21.9
million to $98.5 million compared to $120.4 million in the same period last
year. During the first nine months of 2022, there was a decrease in foreign
currency exchange losses of $45.6 million and a decrease in losses from the
extinguishment of debt of $19.4 million, offset by bargain purchase gains
described above, and an increase in interest expense of $71.1 million due to
increased borrowings and higher interest rates year-over-year.

Provision (benefit) for income taxes

Provision for income taxes for the three months ended September 30, 2022 was
$1.1 million compared to a tax benefit of $5.4 million for the three months
ended September 30, 2021. The effective tax rate for the quarter was 65.7%
compared to 8.6% for the three months ended September 30, 2021. The provision
for income taxes for the nine months ended September 30, 2022 was $1.0 million
compared to $16.8 million for the nine months ended September 30, 2021. The
effective tax rate for the nine months ended September 30, 2022 was 1.6%
compared to 96.6% for the nine months ended September 30, 2021. 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. The 2021 year to date effective tax rate was higher than
the US federal statutory rate of 21%, largely due to discrete items related to
the gain on sale leaseback in Delaware and foreign currency translation.

Net profit (loss) and earnings per share

Net income for the three months ended September 30, 2022 was $0.6 million, or
$0.01 per diluted share, an increase of $58.2 million, or 101.0%, from net loss
of $57.6 million, or $(1.16) per diluted share, in the same period last year. As
a percentage of revenue, net income increased from (18.3)% for the three months
ended September 30, 2021 to 0.1% for the three months ended September 30, 2022.

Net income for the nine months ended September 30, 2022 was $62.0 million, an
increase of $61.4 million, or 10370.1%, from $0.6 million, or $0.01 per diluted
share, in the same period last year. As a percentage of revenue, net income
decreased to 3.7% for the nine months ended September 30, 2022 from 0.1% for the
nine months ended September 30, 2021.

These changes were influenced by the above factors.

Adjusted EBITDA and Adjusted EBITDAR by segment

Consolidated Adjusted EBITDA was $151.0 million for the three months ended
September 30, 2022, up $73.1 million, or 93.9%, from $77.8 million in the same
period last year. Consolidated Adjusted EBITDA was $402.7 million for the nine
months ended September 30, 2022, up $191.5 million, or 90.7%, from $211.2
million in the same period last year.

Adjusted EBITDA for the Casinos & Resorts segment for the three months ended
September 30, 2022 increased $13.8 million, or 14.8%, to $106.9 million and
increased $26.2 million, or 10.8%, to $268.7 million for the nine months ended
September 30, 2022, each compared to the same prior year periods. Casinos &
Resorts Adjusted EBITDAR was $118.7 million and $303.4 million in the three and
nine months ended September 30, 2022, respectively, which further adjusts
Adjusted EBITDA for rent expense associated with our operating leases, as
defined below.

Adjusted EBITDA for the North America Interactive segment for the three months
ended September 30, 2022 decreased $14.1 million to $(19.7) million and
decreased $55.8 million to $(59.9) million for the nine months ended
September 30, 2022, each compared to the same prior year periods, mainly due to
increased operating costs.

Adjusted EBITDA for the International Interactive segment for the three and nine
months ended September 30, 2022 was $76.3 million and $232.3 million,
respectively, directly attributable to our acquisition of Gamesys on October 1,
2021.


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The following tables reconcile Adjusted EBITDA and Adjusted EBITDAR of Casinos & Resortsnon-GAAP measures of net earnings as disclosed in our financial statements (in thousands):

Three months completed September 30, 2022

                                          Casinos &          North America            International
                                           Resorts            Interactive              Interactive              Other              Total

Net income (loss)                       $   50,970          $     (22,675) 

$38,121 ($65,823) $593
Interest expense, net of interest income

                                          (1)                    (8)                      (89)            53,670             53,572
Provision (benefit) for income taxes        17,394                 (4,683)                   (6,617)            (4,957)             1,137
Depreciation and amortization               15,536                  8,113                    41,880              8,324             73,853
Non-operating (income) expense (1)               -                   (113)                     (912)              (362)            (1,387)
Foreign exchange (gain) loss                     -                 (1,465)                    1,224                (12)              (253)
Acquisition, integration and
restructuring                                    -                    164                     2,713              6,405              9,282
Strategic initiatives(2)                     3,061                      -                         -              5,709              8,770
Share-based compensation                         -                      -                         -              6,715              6,715

Other (3)                                     (698)                   338                         -               (954)            (1,314)
Allocation of corporate costs               20,643                    657                        (7)           (21,293)                 -
   Adjusted EBITDA                      $  106,905          $     (19,672)  

$76,313 ($12,578) $150,968
Rental expenses related to simple triple net leases(4)

                         11,835
   Adjusted EBITDAR                     $  118,740


__________________________________

(1)  Non-operating (income) expense for the applicable periods include: (i)
change in value of naming rights liabilities and (ii) other (income) expense,
net.
(2)  Includes costs incurred for financing related transactions including the
recent tender offer process and rent expense related to Bally's Black Hawk and
Quad Cities properties, as the Company recently entered into sale lease-back
transactions associated with these properties to finance the Tropicana Las Vegas
property acquisition.
(3)  Other includes the following items: (i) non-routine legal expenses, net of
recoveries for matters outside the normal course of business, (ii) rebranding
expenses in connection with Bally's corporate name change, and (ii) other
individually de minimis expenses.
(4)  Rent expense associated with triple net leases for the Company's Bally's
Lake Tahoe, Bally's Evansville and Bally's Dover properties.

                                                              Three Months Ended September 30, 2021
                                                    Casinos &           North America
                                                     Resorts             Interactive                   Other              Total

Net income (loss)                                $     48,777          $     (19,320)               $ (87,102)         $ (57,645)
Interest expense, net of interest income                    5                    (10)                  31,311             31,306
Provision (benefit) for income taxes                   16,294                 (5,780)                 (15,914)            (5,400)
Depreciation and amortization                          14,110                  6,274                    8,616             29,000
Non-operating (income) expense(1)                           -                      -                   16,577             16,577
Foreign exchange loss                                       -                     22                   42,874             42,896
Acquisition, integration and restructuring                  -                      -                    6,797              6,797
Strategic initiatives(2)                                    -                 12,500                      (29)            12,471
Share-based compensation                                    -                      -                    5,449              5,449

Other(3)                                               (4,688)                    77                    1,009             (3,602)
Allocation of corporate costs                          18,604                    654                  (19,258)                 -
   Adjusted EBITDA                               $     93,102          $      (5,583)               $  (9,670)         $  77,849

__________________________________

(1)  Non-operating (income) expense for the applicable periods include: (i)
change in value of naming rights liabilities, (ii) gain (adjustment) on bargain
purchases, (iii) loss on extinguishment of debt and (iv) other (income) expense,
net.
(2)  Includes costs incurred related to the amended credit agreement and a lump
sum one-time contribution of $12.5 million to support a referendum campaign to
legalize sports betting in the State of California.
(3)  Other includes the following items: (i) professional fees and other costs
incurred to establish the partnership with Sinclair and acquire Bally
Interactive, (ii) storm related gains related to insurance recoveries received
due to the effects of Hurricane Zeta on the Company's Hard Rock Biloxi property,
(iii) rebranding expenses in connection with Bally's corporate name change, (iv)
business interruption related recoveries, and (v) other individually de minimis
expenses.
                                       54
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Nine month period ended September 30, 2022

                                          Casinos &          North America           International
                                           Resorts            Interactive             Interactive               Other              Total

Net income (loss)                       $  149,768          $     (72,814) 

$109,433 ($124,404) $61,983
Interest expense, net of interest income

                                          (7)                   (11)                     (53)            145,156            145,085
Provision (benefit) for income taxes        53,851                (13,325)                 (15,183)            (24,347)               996
Depreciation and amortization               45,646                 24,360                  132,255              25,246            227,507
Non-operating (income) expense(1)                -                   (106)                    (519)            (43,690)           (44,315)
Foreign exchange (gain) loss                     -                 (4,608)                   2,381                 (21)            (2,248)
Acquisition, integration and
restructuring                                    -                    940                    3,938              19,796             24,674
Strategic initiatives(2)                     6,079                      -                        -               8,842             14,921
Share-based compensation                         -                      -                        -              18,132             18,132
Gain on sale-leaseback                     (50,766)                     -                        -                   -            (50,766)

Other(3)                                     1,718                  4,075                        -                 935              6,728
Allocation of corporate costs               62,407                  1,618                        -             (64,025)                 -
   Adjusted EBITDA                      $  268,696          $     (59,871) 

$232,252 ($38,380) $402,697
Rental expenses related to simple triple net leases (4)

                        34,717
Adjusted EBITDAR                        $  303,413


__________________________________

(1)  Non-operating (income) expense for the applicable periods include: (i)
change in value of naming rights liabilities, (ii) gain (adjustment) on bargain
purchases, and (iii) other (income) expense, net.
(2)  Includes costs incurred related to financing related transactions including
the recent tender offer process, costs incurred to address the Standard General
takeover bid, and rent expense related to Bally's Black Hawk and Quad Cities
properties, as the Company recently entered into sale lease-back transactions
associated with these properties to finance the Tropicana Las Vegas property
acquisition.
(3)  Other includes the following items: (i) rebranding expenses in connection
with Bally's corporate name change (ii) non-routine legal expenses, net of
recoveries for matters outside the normal course of business, and (iii) other
individually de minimis expenses.
(4)  Rent expense associated with triple net leases for the Company's Bally's
Lake Tahoe, Bally's Evansville and Bally's Dover properties.

                                                               Nine Months Ended September 30, 2021
                                                    Casinos &            North America
                                                     Resorts              Interactive                    Other              Total

Net income (loss)                                $     161,522          $     (22,091)               $ (138,839)         $     592
Interest expense, net of interest income                    24                    (12)                   72,867             72,879
Provision (benefit) for income taxes                    57,744                 (6,385)                  (34,608)            16,751
Depreciation and amortization                           39,171                 10,691                    17,641             67,503
Non-operating (income) expense(1)                            -                      -                     4,165              4,165
Foreign exchange (gain) loss                                 -                    (13)                   43,366             43,353
Acquisition, integration and restructuring                   -                      -                    37,457             37,457
Strategic initiatives(2)                                     -                 12,500                       741             13,241
Share-based compensation                                     -                      -                    13,833             13,833
Gain on sale-leaseback                                 (53,425)                     -                         -            (53,425)
Other(3)                                               (11,317)                    77                     6,097             (5,143)
Allocation of corporate costs                           48,809                  1,140                   (49,949)                 -
   Adjusted EBITDA                               $     242,528          $      (4,093)               $  (27,229)         $ 211,206

__________________________________

(1)  Non-operating (income) expense for the applicable periods include: (i)
change in value of naming rights liabilities, (ii) gain (adjustment) on bargain
purchases, (iii) loss on extinguishment of debt and (iv) other (income) expense,
net.
(2)  Includes costs incurred related to the amended credit agreement and a lump
sum one-time contribution of $12.5 million to support a referendum campaign to
legalize sports betting in the State of California.
(3)  Other includes the following items: (i) asset impairment charges related to
the Dover Downs and Bally's Black Hawk trade names in connection with Bally's
rebranding, (ii) professional fees and other costs incurred to establish the
partnership with Sinclair and acquire Bally Interactive, (iii) storm related
gains related to insurance recoveries received due to the effects of Hurricane
Zeta on the Company's Hard Rock Biloxi property, (iv) rebranding expenses in
connection with Bally's corporate name change, (v) business interruption related
recoveries, and (vi) other individually de minimis expenses.

                                       55
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Critical accounting estimates

There were no material changes in critical accounting estimates during the
period covered by this Quarterly Report on Form 10-Q. Refer to Item 7 of the
Company's Annual Report on Form 10-K for the year ended December 31, 2021 for a
complete list of our Critical Accounting Estimates.

Recent accounting pronouncements

Refer to Note 3 "  Recently Adopted and Issued Accounting Pronouncements  " in
Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of recent
accounting pronouncements that affect us.

Cash and capital resources

Insight

We are a holding company. Our ability to fund our obligations depends on
existing cash on hand, cash flow from our subsidiaries and our ability to raise
capital. Our primary sources of liquidity and capital resources have been cash
on hand, cash flow from operations, borrowings under our Revolving Credit
Facility (as defined herein) and proceeds from the issuance of debt and equity
securities. We assess liquidity in terms of the ability to generate cash or
obtain financing in order to fund operating, investing and debt service
requirements. Our primary ongoing cash requirements include the funding of
operations, capital expenditures, acquisitions and other investments in line
with our business strategy and debt repayment obligations and interest payments.
Our strategy has been to maintain moderate leverage and substantial capital
resources in order to take advantage of opportunities, to invest in our
businesses and acquire properties at what we believe to be attractive
valuations. As such, we have continued to invest in our land-based casino
business and build on our interactive/iGaming gaming business. We believe that
existing cash balances, operating cash flows and availability under our
Revolving Credit Facility, will be sufficient to meet funding needs for
operating, capital expenditure and debt service purposes.

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