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 $2.12 billion and $1.62 billion as of June 30, 2025 (Successor) and December 31, 2024 (Predecessor), respectively, and right of use assets of $1.93 billion and $1.54 billion as of June 30, 2025 (Successor) and December 31, 2024 (Predecessor), respectively, which were included in the condensed consolidated balance sheets.

As of June 30, 2025 (Successor), the Company leases certain properties from GLPI under two separate master lease agreements, the “Master Lease,” and the “Master Lease No. 2.” 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 and Bally’s Shreveport properties are leased under the terms of the “Master Lease No. 2” which requires combined initial minimum annual payments of $32.2 million. All components of the Master Lease and Master Lease No. 2 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. Both 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 June 30, 2025 (Successor).

Following the Merger, as of June 20, 2025 (Successor), the Company also has a master lease agreement through Queen with GLPI, the “Queen Master Lease”, with The Queen Baton Rouge, The Belle of Baton Rouge, Casino Queen Marquette and DraftKings at Casino Queen properties being leased under the terms of the Queen Master Lease, which requires initial combined minimum annual payments of $31.7 million. All components of the Queen Master Lease are accounted for as operating leases within the provisions of ASC 842, over the lease term or until a re-assessment event occurs. The Queen Master Lease has an initial term of 15 years and includes four, five-year options to renew and is subject to annual escalation. The renewal options are not reasonably certain of exercise as of June 30, 2025 (Successor).

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. 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 $10.5 million, subject to minimum 1% annual escalation or greater escalation dependent on CPI. As of June 30, 2025 (Successor), the renewal options are not considered reasonably certain to be exercised. During the third quarter of 2024, the Company modified the lease and GLPI paid $48.6 million to the Company to fund the demolition of the building at the Tropicana Las Vegas site in exchange for an increase in annual rent of $4.1 million, also subject to a minimum 1% annual increase or greater based on CPI. This lease modification did not change the lease classification.


	Successor				Predecessor
(in thousands)	Three Months Ended June 30, 2025		Period from February 8, 2025 to June 30, 2025		Period from January 1, 2025 to February 7, 2025		Three Months Ended June 30, 2024		Six Months Ended June 30, 2024

Operating leases:
Operating lease cost	$	59,454	$	93,474	$	21,714	$	36,957	$	74,288
Variable lease cost	2,389		4,128		1,238		2,823		5,609
Operating lease expense	61,843		97,602		22,952		39,780		79,897
Short-term lease expense	7,063		10,446		2,393		5,633		11,488
Total lease expense	$	68,906	$	108,048	$	25,345	$	45,413	$	91,385

Supplemental cash flow and other information related to operating leases for the three months ended June 30, 2025 (Successor), the three months ended June 30, 2024 (Predecessor), the period from February 8, 2025 to June 30, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the six months ended June 30, 2024 (Predecessor) are as follows:


	Successor				Predecessor
(in thousands)	Three Months Ended June 30, 2025		Period from February 8, 2025 to June 30, 2025		Period from January 1, 2025 to February 7, 2025		Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
Cash paid for amounts included in the lease liability - operating cash flows from operating leases	$	62,141	$	80,625	$	30,843	$	32,956	$	64,505
Right of use assets obtained in exchange for operating lease liabilities	$	22,977	$	22,977	$	—	$	631	$	631


	Successor
(in thousands)	June 30, 2025
Remaining 2025	$	121,496
2026	241,027
2027	236,324
2028	239,173
2029	240,173
Thereafter	4,150,215
Total lease payments	5,228,408
Less: present value discount	(3,110,534)
Lease obligations	$	2,117,874

On July 11, 2024, the Company entered into a Binding Term Sheet to form a strategic construction and financing arrangement with GLP, an affiliate of GLPI, which includes the funding to complete the construction of Bally’s Chicago’s permanent casino. GLP will amend the existing land lease through a new master lease agreement with Bally’s Chicago Operating Company, LLC (“Chicago MLA”). The Chicago MLA includes annual rent of $20 million, subject to customary escalation provisions. The Chicago MLA also provides up to $940 million in construction financing, subject to conditions and approvals. The Company will pay additional rent under the Chicago MLA based on a 8.5% capitalization rate on funded amounts. The initial lease term for the Chicago MLA is 15 years with renewal options to be agreed upon by the parties. On July 17, 2025, the Company signed the Chicago MLA with GLPI. Refer to Note 21 “Subsequent Events” for further information.

In addition, the Company plans to sell and lease back its Bally’s Twin River property to GLP by the end of 2026 for $735 million, with initial annual rent of $58.8 million. GLP has the right to call this transaction starting October 2026. All such transactions are subject to required regulatory approvals.

The Company leases its hotel rooms to patrons and records the corresponding lessor revenue in Non-gaming revenue within our condensed consolidated statements of operations. The Company had lessor revenues related to the rental of hotel rooms of $33.7 million and $35.3 million for the three months ended June 30, 2025 (Successor) and three months ended June 30, 2024 (Predecessor), respectively. The Company had lessor revenues related to the rental of hotel rooms of $52.4 million, $11.0 million and $76.4 million for the period from February 8, 2025 to June 30, 2025 (Successor), the period from January 1, 2025 to February 7, 2025 (Predecessor) and the six months ended June 30, 2024 (Predecessor), respectively. Hotel leasing arrangements vary in duration, but are short-term in nature.