Congratulations, Bally’s Corp. You’re the tiny dog that caught the enormous car. What do propose to do with it? In case you missed it, Star Entertainment was so desperate for financial relief that it accepted a teensy, $180 million buyout offer from Bally’s for 57% of the company. An infusion of capital from Down Under publishing baron Bruce Mathieson subsequently lowered Bally’s upfront cost to $120 million. That’s $40 million per megaresort, which sounds pretty sweet on the face of it.
Trouble is, for Bally’s the learning curve will be something close to vertical. It has zero presence in or experience of Australia. It will have to get up to speed in a hurry. It will also have to make acquaintance of high-roller play, not exactly something one sees much of at Bally’s collection of grind joints and second-tier casinos. Then there’s the small matter of running three high-end casinos halfway around the world at a time when Bally’s is trying to develop megaresorts in Chicago and Las Vegas AND New York City. To say that Chairman Soo Kim has bitten off more than his executive team can chew is an understatement.
Bally’s might, just barely, pay for the Star deal from cash on hand but instead has opted to borrow the money. This will raise Bally’s burdensome debt load (for which the company has no exit strategy) to over $3.4 billion. This only increases the burden of expectations for Bally’s Chicago, slated to open in September 2026. And most of the revenue will flow to majority owner Gaming & Leisure Properties, not operator Bally’s.
Stock analysts at CBRE share our skepticism. They question the expenditure and “would prefer such funds to be directed towards the US operator’s ongoing casino development in Chicago.” They call the Hail Mary pass by Kim “an aggressively opportunistic use of investment capacity for a risky portfolio of assets.” Did we mention that Star has an impending governmental fine of up to $95 million hanging over its head? “We believe the initial Bally’s investment may be the first of multiple cash injections needed at Star and we are cautious around the ability to turn operations around,” wrote the CBRE boffins. They cited Star’s 2024 cash flow of $175 million—withered by 45% and showing negative ROI.
One might also mention that Bally’s debt load was downgraded to B- last week, hardly an augury for confidence in Kim’s leadership. The Bally’s supremo has hitched his wagon to a falling Star and it remains to be seen whether or not he’s dragged down with it.
Arsenic and Old Miriam. Everybody’s favorite casino-industry pest, Dr. Miriam Adelson, is learning the hard way to be careful what you wish for because you just might get it. She plowed $145 million into pushing protectionism during the last election cycle. Now she’s got it and is $1 billion the poorer for it. (Sometimes bad things do happen to bad people.) Her net worth has shrunk from $28.8 billion to $26.6 billion. Our current economic pickle was brought to you in large part by Dr. Adelson, so you’ll pardon us salvaging some schadenfreude from the mess. Las Vegas Sands stock finally bottomed out this morning … but not after slaloming from $38.65/share on “Liberation Day” to $30/share. In other words, it was worth 22.5% less than it was before tariffs struck.
This shows, in part, the folly of the Adelson Family’s decision to abandon the United States for a China-heavy strategy. They’ll find no relief over there: Sands China has lost at least 14% of its value on the Hong Kong stock exchange and Jefferies Equity Research just dropped it from most-favored status among Macao-based companies. All of this was sufficient for Adelson’s pet newspaper, the Las Vegas Review-Journal, to channel a high-pitched, Adelsonian shriek of pain on its editorial page. (Interestingly, the R-J made no disclosure of its inherent conflict of interest. Sort of like Fox News suppressing its famous stock ticker.)
Like Adelson, the R-J had been a cheering section for a campaign platform that promised exactly the witch-doctor economic policies we’re now experiencing. Editor Glenn Cook and his sugar mommy are having a Fuck Around, Find Out moment now. Don’t feel too badly for Cook, having squandered what little journalistic credibility he possessed by yoking his paper’s agenda to Adelson’s ditzy worldview. Nor should we shed any crocodile tears for the Widow Adelson: Unlike her late husband, she made her money the old-fashioned way—she inherited it. Easy come, easy go.