In a span of fewer than 24 hours, Rhode Island-based Bally’s Corp. changed its entire gaming industry profile.
The regional casino company’s chairman, Soo Kim, co-founder of the hedge fund that owns 39% of Bally’s, will tell you the transformation has been in the works since the former Twin River Worldwide Holdings began buying casinos around the country two years ago.
Wednesday’s $125 million purchase of sports betting platform Bet.Works was followed by Thursday’s agreement with Sinclair Broadcast Group, which will place the Bally name on 21 regional sports networks and Bally’s sports gambling content on 190 television stations in 88 markets – 70% of all U.S. households.
Bally’s Chairman Soo Kim
There’s a reason that Kim spent $20 million to acquire control of the Bally name, brand, and intellectual property from Caesars Entertainment last month.
“We have evolved in just a few short years from a regional casino operator into the first U.S. gaming company committed to serving our customers with an omnichannel approach,” Kim said in a statement announcing the Bet.Works acquisition. Kim became the company’s chairman last December after joining the board in 2016.
Following Wednesday’s after-market news and Thursday’s pre-market announcement, investors sent Bally’s shares up nearly 21% on the New York Stock Exchange. More than 1 million shares were traded, three-and-a-half times the average daily volume.
Bally will form two operating divisions, one to oversee the casino side and a second to manage the sports betting and igaming platforms that will come with the Bet.Works deal.
Macquarie Securities gaming analyst Jordan Bender said the two moves could allow Bally to “rival some of the larger players” in the sports gaming space, notably regional casino operator Penn National Gaming, which spent $163 million in January to acquire 36% of sports media platform Barstool Sports. The companies launched a Barstool-branded sports betting app in Pennsylvania in September and is planning on taking to other states over the next few months.
“While there are differences between brands, Penn, with 60 million Barstool (users), saw its market capitalization increase by more than $6 billion in the months following the deal,” Bender said.
Bally’s is banking on Sinclair’s vast network reach to acquire new customers for its sports betting products, which could launch by the second quarter of next year.
The regional sports networks, currently broadcasting under the Fox Sports moniker, have the broadcasting rights of more than half of all Major League Baseball, NBA, and NHL teams. In addition, Bally’s will have access to Sinclair’s Tennis Channel; Stadium, a 24-hour multi-platform sports network; and STIRR, a consumer streaming app with live and on-demand sports content.
Bally’s and Sinclair plan to eventually offer sports viewers the ability to wager on games with Bally’s directly from their televisions.
“Sinclair and Bally’s will jointly market, design, and integrate products and deliver online gaming on a state-by-state basis, looking to provide an interactive gamification experience of live sports,” said Truist Securities gaming analyst Barry Jonas.
Bally’s CEO George Papanier said on a conference call Thursday the company expects to convert about 10% of the company’s 14 million active customers into sports betting participants.
“The integration of the online stack and a media partnership gives Bally’s the opportunity to compete with the larger players in the space with media partnerships,” Bender said.
Bally’s will soon own 14 casinos in 10 states, once four pending casino acquisitions close over the next few months. Most of the properties will be rebranded under the Bally name. During the webcast of the conference call, Bally’s displayed a slide showing its recently acquired casino in Kansas City rebranded as Bally’s Kansas City.
Eight of the states where Bally’s will operate casinos will have legal sports betting.
“Bet.Works provides Bally’s with a suite of omni-channel products, platforms, software, and content solutions currently offered as (business-to-business) services for operators in New Jersey, Iowa, Indiana, and Colorado,” Jonas said.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
