Bally’s Corp., which jumped into the sports betting realm last year, is acquiring the third-largest North American daily fantasy sports site in an effort to expand its reach in the fast-growing segment.
In an announcement Monday, Bally’s said it will acquire privately-held Monkey Knife Fight (MKF) in an all-stock transaction that one analyst said could be worth as much as $90 million. The deal allows Bally’s, which acquired sports wagering platform Bet.Works last fall for $125 million, to become just the third sports betting operator with a daily fantasy product.
The top two daily fantasy companies, DraftKings and FanDuel, have long been at the top of the market and launched sports betting operations in 2018.
According to Bally’s, MKF offers both daily fantasy sports and e-sports contest. SponsorUnited rated MKF as the sixth most-searched and 10th fastest-growing brand in sports and entertainment.
In addition to acquiring Bet.Works, Bally’s struck a partnership with Sinclair Broadcast Group in which the Bally’s name will replace Fox on Sinclair’s 21 regional sports networks.
Bally’s said adding MKF expands on the company’s integrated sports betting and igaming strategy. The Rhode Island-based casino operator currently has 11 casinos in seven states with deals in place for four additional casinos in four other states.
Truist Securities gaming analyst Barry Jonas told investors the transaction widens Bally’s offering and also compliments the Sinclair transaction by providing daily fantasy “into markets where sports betting isn’t yet legal and/or Bally’s doesn’t currently have a presence.”
Jonas noted that MKF is the official partner of the NFL Players Association.
MKF has 180,000 registered users and 80,000 depositing players across 37 states, Washington D.C. and Canada. The company highlighted the potential of building a database in California, Florida, and Texas, where sports betting legalization could be debated this year.
Bally’s said the three states could account for “20% to 25%” of U.S. sports betting revenues and access into Canada, which is also considering sports betting.
It will also enable Bally’s to build a player database in Canada, a market that is expected to authorize sports betting in the near future.
“Monkey Knife Fight is a unique asset that we look forward to incorporating into Bally’s constantly growing omnichannel portfolio of land-based casinos and iGaming platforms,” Bally’s CEO George Papanier said in a statement. “The acquisition will lead to Bally’s developing new and engaging content with MKF for its customers.”
The owners of MKF will receive penny warrants for up to $50 million in Bally’s shares and contingent penny warrants for up to $20 million in additional Bally’s shares on the first and second anniversaries of the deal’s closing, which is expected to take place by the end of March.
“The acquisition will allow Bally’s to leverage both its current customer database as well as DFS’s collection of depositing players,” Papanier said. “These assets will also provide Bally’s with a significant advantage in launching its own sports betting operations.”
MKF founder and CEO Bill Asher said he’s confident Bally’s will be able to grow and develop the business. He said the company has “distinguished ourselves from competitors” through “strategic partnerships with teams, ownership groups, and players unions, and acquiring strategic assets to bolster our position in the market.”
Shares of Bally’s, traded on the New York Stock Exchange, closed at $55.47 Monday, up $2.21 or 4.15%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
