Igaming Focus: Is Bally’s the blueprint for transatlantic consolidation? By Hannah Gannagé-Stewart, CDC Gaming Reports April 22, 2021 at 10:00 am Bally’s Corporation is shaping up as the archetypal US omnichannel operator as it continues its acquisitive run; hoovering up casinos, betting platforms, and – next – UK-based igaming developer Gamesys. The deal was finalised on April 13, with Bally’s this week reporting it had raised $671.4m through a share offering, in order to fund its proposed $2.8bn acquisition of the London Stock Exchange-listed online software development and gaming business. The addition of Gamesys will gift Bally’s a proprietary technology platform and igaming know-how stretching back to 2001, which in combination with its recently acquired DFS and sports betting businesses will make the US gaming giant a force to be reckoned with. The deal shines a light on the rapid transatlantic consolidation momentum that has been building since the US repealed the Professional and Amateur Sports Protection Act (PASPA) in 2018. The raft of mergers between US legacy bricks and mortar casinos and the UK’s online gaming giants was always in the cards, but the past year’s uptick in online gaming due to the pandemic seems to have crystalised the market’s intentions. If the Gamesys deal goes ahead as planned, it will be one of Bally’s biggest to date, following hot on the heels of a raft of recent M&A. In March 2019, Bally’s legacy brand Twin River completed a reverse merger with Dover Downs Gaming & Entertainment, the parent company of Dover Downs Hotel & Casino, making Twin River a public company traded on the New York Stock Exchange. Then, in January 2020, Twin River purchased the Golden Gates, Golden Gulch and Mardi Gras casinos in Black Hawk, Colorado from Affinity Gaming for $51m. Twin River went on to announce a deal with Caesars Entertainment and Vici Properties to purchase Bally’s Atlantic City in New Jersey in April 2020, and a separate deal to buy Eldorado Shreveport Resort Casino in Louisiana and MontBleu Resort Casino & Spa in Lake Tahoe, Nevada. In July 2020, Twin River bought two casinos in Missouri and Mississippi from Eldorado Resorts for $230m, which are now known as Casino KC and Casino Vicksburg. In October that year, the company agreed to buy Jumer’s Casino & Hotel in Illinois from Delaware North for $120m. It was later that month that Twin River acquired the rights to the Bally’s casino trademark from Caesars for $20m and went onto rebrand the business. In November 2020, Bally’s acquired the sports betting provider Bet.Works and inked a naming rights agreement with Sinclair Broadcast Group to rebrand the Fox Sports Network group as Bally Sports. The deal included provision of sports betting-related content across Sinclair sports networks and enabled Sinclair to acquire up to a 15% stake in Bally’s. In January 2021, Bally’s announced a plan to build a $120m casino in Pennsylvania, followed by plans to build Bally’s Richmond in Virginia, at a cost of $650m. In 2021, the casino giant turned its attention away from bricks and mortar and acquired free-to-play online games provider SportCaller and DFS-platform Monkey Knife Fight. Bally’s revealed it had put in a bid for Gamesys in a regulatory filing with the Securities and Exchange Commission (SEC) on March 23, with Gamesys publicly approving the bid the next day. The move is generally seen by analysts as being an exciting one for the market. “The strategic logic behind the merger could make this deal BALY’s most exciting endeavour yet,” said analyst John DeCree in a note on the deal. “There are two key reasons why GYS trades at a discount to its peers. The first is because it lacks meaningful US exposure (though it is licensed in NJ), and the second is it does not have a sports betting platform,” he continued. “These are two gaps BALY fills perfectly with its US market access in 12 states (and growing) and its Bet.Works/Sinclair sports betting platform. BALY is one of the last major US casino companies with significant market access, making it an ideal partner for GYS looking to scale in the nascent US digital gaming industry.” Gamesys has also seen consolidation in recent years, having been founded originally as The Intertain Group Limited in 2001 before operator Jackpotjoy plc became its parent company in January 2017, following a reorganisation transaction involving a share-for-share exchange. In June 2018, it was announced that Jackpotjoy would change its name to JPJ Group, and, on 26 September 2019, JPJ Group completed an acquisition of Gamesys Limited and the combined group was renamed Gamesys Group. Commenting on the Bally’s deal, Gamesys chief executive Lee Fenton, who is tipped as the group CEO of the combined entity, said: “After more than two decades honing our craft in online gaming, this combination would give all at Gamesys an opportunity to fully leverage the technology, product and know-how we have developed in what will become the largest regulated online gambling market in the world. “I believe the highly complementary nature of our companies and the common history of being highly cash generative will leave us uniquely positioned for success.” The deal is certainly generally perceived as being a positive one for both sides, but whether the firms will be “uniquely positioned” remains to be seen. Caesars’ acquisition of UK bookmaker William Hill is also set to close today (April 22) and others are sure to follow.