Twin River Worldwide Holdings is paying Caesars Entertainment $25 million to acquire Bally’s Atlantic City in a deal that was announced in April. We learned this week that Twin River is also purchasing the Bally’s intellectual property from Caesars for $20 million.
So which is the better deal?
Truist Securities gaming analyst Barry Jonas said taking control of the Bally name and brand, which has a historic casino industry pedigree, could unify the Rhode Island-based regional casino company’s expanding portfolio.
Twin River has been on a buying spree over the last 18 months. Four casino deals are still awaiting approvals. When finalized, the company will have 13 properties in nine states, all with different names and themes.
For example, the company owns Hard Rock Casino in Biloxi, Mississippi, and the Golden Gulch and Golden Gates in Black Hawk, Colorado. It is acquiring MontBleu in Lake Tahoe, Nevada, Eldorado Shreveport in Louisiana, and Jumer’s Casino in Rock Island, Illinois.
It’s not hard to imagine the marketing issues.
Jonas said the name Bally would resonate with older slot players, a key target demographic for Twin River. One name also leads a “unified branding strategy” that “likely facilitates cross-property synergies” for the company’s portfolio.
Also, as Twin River expands its sports betting presence, the Bally name would be noticeable in the online world, “a clear investor focus,” Jonas added.
Twin River Chairman Soohyung Kim, a co-founder of the hedge fund Standard General that owns 39% of the company, told the New York Post’s Josh Kosman he paid $20 million for the Bally’s name. He said Twin River would change its New York Stock Exchange listing to a symbol more reflective of Bally.
Twin River Chairman Soohyung Kim/New York Post graphic
We might even see a corporate name change away from its Providence, Rhode Island, roots.
Kim, who was profiled by Kosman this summer, is driving Twin River’s casino shopping spree. He said rival casino companies saddled with debt will need to shed properties.
“We are one of the few that have scale and a good balance sheet,” Kim said.
At the end of June, Twin River had long-term debt of $972 million. The company raised $125 million in new debt last week that comes due in 2027. The company is paying a combined $300 million for the four casinos.
Earlier this year, Twin River acquired Lady Luck Casino Vicksburg in Mississippi and Isle of Capri Casino in Kansas City, Missouri, from Caesars’ predecessor company, Eldorado, for $230 million. The properties were renamed Casino Vicksburg and Casino KC. But that could change.
A few hours after the Post story came out, Twin River announced the Bally brand acquisition in a one-paragraph statement but did not give a price. The purchase agreement “enables the company to rebrand virtually all of its portfolio properties under the Bally’s name and logo.”
Bally Manufacturing was a historic pinball and arcade-games developer when it branched off into slot machines. The gaming equipment business was sold and evolved into Bally Technologies and was one of the industry’s largest manufacturers when it was bought by Scientific Games in a $5.1 billion purchase in 2015.
As for the casinos, only two properties in the U.S. carry the Bally name.
Bally Manufacturing off-shoot Bally Entertainment added the Atlantic City resort in 1979 and spent $594 million in 1986 to acquire the original MGM Grand on the Las Vegas Strip, which became known as Bally’s Las Vegas. The company also owned Bally’s Reno, which is now the Grand Sierra Resort and owned by the southern California-based Meruelo Group.
Bally’s Las Vegas, after several high-profile gaming industry mergers, remains under Caesars’ ownership. As part of the agreement, Caesars has a “perpetual license” to use the Bally’s brand in Las Vegas.
Caesars sold the off-Strip Rio last year and controls the operations of eight Strip resorts. Company executives have said they will sell at least one and possibly two of its Strip properties.
Jonas told investors Twin River could be eyeballing the Strip and the branding agreement is an initial step in purchasing Bally’s Las Vegas. The challenge, however, is that the neighboring Paris Las Vegas and Bally’s are connected, both physically and operationally.
But for the free-spending Kim, that might not be an issue.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
