Bally's Corp

15. LEASES

Operating Leases

The Company is committed under various operating lease agreements for real estate and property used in operations. Certain leases include various renewal options which are included in the lease term when the Company has determined it is reasonably certain of exercising the options. Certain of these leases include percentage rent payments based on property revenues and/or rent escalation provisions determined by increases in the consumer price index (“CPI”). These percentage rent and escalation provisions are treated as variable lease payments and recognized as lease expense in the period in which the obligation for those payments are incurred. Discount rates used to determine the present value of the lease payments are based on the Company’s incremental borrowing rate commensurate with the term of the lease.

The Company had total operating lease liabilities of $2.42 billion and $1.93 billion as of March 31, 2026 (Successor) and December 31, 2025 (Successor), respectively, and right of use assets of $2.25 billion and $1.77 billion as of March 31, 2026 (Successor) and December 31, 2025 (Successor), respectively, which were included in the condensed consolidated balance sheets.

GLPI Master Leases

As of March 31, 2026 (Successor), the Company leases certain properties from GLPI under three separate master lease agreements, the “Master Lease,” the “Master Lease No. 2,” and the “Queen Master Lease.” The Company’s Bally’s Evansville, Bally’s Dover, Bally’s Quad Cities, Bally’s Black Hawk, Bally’s Tiverton and Hard Rock Biloxi properties are leased under the terms of the Master Lease which requires combined initial minimum annual payments of $101.5 million. The Company’s Bally’s Kansas City, Bally’s Shreveport, DraftKings at Casino Queen, The Queen Baton Rouge and Bally’s Twin River properties are leased under the terms of the Master Lease No. 2 which requires combined initial minimum annual payments of $118.3 million. The Company’s Bally’s Baton Rouge and Casino Queen Marquette properties are leased under the terms of the Queen Master Lease, which requires initial combined minimum annual payments of $3.0 million, plus annual development rent of $11.3 million. All components of the Master Lease, Master Lease No. 2 and the Queen Master Lease are accounted for as operating leases within the provisions of ASC 842, Leases (“ASC 842”), over the lease term or until a re-assessment event occurs. All three leases have an initial term of 15 years and include four, five-year options to renew and are subject to a minimum 1% annual escalation or greater escalation dependent on CPI. The renewal options are not reasonably certain of exercise as of March 31, 2026 (Successor).

On February 11, 2026, the Company completed the sale-leaseback of the land and real estate assets of Bally’s Twin River to GLPI for total consideration of $700.0 million. The transaction was structured as a tax-free capital contribution and a substantial portion of the proceeds was used to reduce the Company’s debt. In connection with this transaction, the Bally’s Twin River property was added to Master Lease No. 2, increasing minimum annual payments by $56.0 million, and with annual escalations and extension options disclosed above. During the three months ended March 31, 2026 (Successor), the Company recorded a gain of $105.8 million, within Gain on sale-leaseback in the condensed consolidated statements of operations, representing the difference in the transaction price and the derecognition of assets.

In addition to the properties under the master leases explained above, the Company leases land associated with Tropicana Las Vegas under a ground lease established with GLPI in 2022 and modified in 2024. This lease has an initial term of 50 years, with the possibility of extending up to 99 years through renewal options, and requires initial minimum annual payments of $14.6 million, subject to minimum 1% annual increase or greater based on CPI. As of March 31, 2026 (Successor), the renewal options are not considered reasonably certain to be exercised.

Chicago MLA

On July 17, 2025, the Company entered into a new master lease agreement with GLPI (the “Chicago MLA”), that amended the existing ground lease for the property on which the Company plans to develop its Chicago Permanent Facility and a development agreement with GLPI (the “Chicago Development Agreement”) pursuant to which GLPI has committed to advance up to $940.0 million (the “GLPI Development Advances”) for the payment of hard costs used to construct the Chicago Permanent Facility in exchange for increasing the amount of rent payable to GLPI under the Chicago MLA.

The Chicago MLA has an initial term of 15 years and includes four, five-year options to renew and is subject to annual escalation. Initial annual rent under the Chicago MLA was $20.0 million, with additional rent equal to 8.5% of the GLPI Development Advances that are granted to the Company. Under the Chicago Development Agreement, as construction occurs, the Company will recognize a construction receivable on the condensed consolidated balance sheets due from GLPI. To the extent costs exceed the amount to be reimbursed by GLPI, such costs are considered prepaid rent, which will be added to the associated operating lease right of use asset once the lease commences. As of March 31, 2026 (Successor) and December 31, 2025 (Successor), the prepaid rent balance, classified within Other assets, was $193.2 million and $175.8 million, respectively.

Components of lease expense, included within General and administrative in the condensed consolidated statements of operations, for operating leases were as follows:

Supplemental cash flow and other information related to operating leases are as follows:

As of March 31, 2026 (Successor), future minimum lease payments under noncancellable operating leases are as follows:

(1) Total lease obligations exclude future minimum lease payments under the Chicago MLA, which has not yet commenced as of March 31, 2026 (Successor).

Lessor

The Company leases its hotel rooms to patrons. Hotel leasing arrangements vary in duration, but are short-term in nature. Additionally, the Company leases lottery equipment to government lottery commissions in conjunction with providing related operations, maintenance, and support services. These arrangements are priced either as (i) a fixed fee per machine per period or (ii) a variable fee based on a percentage of the lottery organization’s gross ticket sales.

The Company recorded lessor revenues in “Non-gaming revenue” of $41.7 million, $18.7 million and $11.0 million for the three months ended March 31, 2026 (Successor), period from February 8, 2025 to March 31, 2025 (Successor), and the period from January 1, 2025 to February 7, 2025 (Predecessor), respectively.