Bally’s investors will get their first look at the third try for Bally Bet as the company announces its third quarter earnings this week.
Recently appointed CEO Robeson Reeves is expected to address the switch from powering Bally Bet in-house to using purchased tech from B2B suppliers Kambi and White Hat. The call is at 11 am Eastern Wednesday.
That switch forced the company to turn off its sports betting app for a few months in several states. Reeves previously indicated between $50 million and $60 million in adjusted EBITDA losses from costs associated with the switch, though the multi-state shutdown was unexpected to the market.
Bally’s stock price has fallen by more than 50% year-to-date to below $10.
Did shutdowns widen interactive loss?
The B2B-powered BallyBet is currently online in Arizona, Colorado, Ohio and Virginia, though it has remained down indefinitely in Indiana, Iowa and New York since late June. Meanwhile, it has yet to launch in 10 additional states where it has market access.
In its last reporting period before the shutdowns, the North American Interactive segment that houses Bally Bet experienced higher-than-expected losses.
Expect Robeson to field questions on the timeline for more state launches and relaunches and how he plans to entice customers to return.
How is Kambi-powered Bally Bet performing?
The payoff, Bally’s hopes, is a better return for Bally Bet 3.0 compared to the last iteration.
Bet.Works, which Bally’s acquired for $125 million to power its app, “did not give us the platform required to develop a competitive product,” Reeves said before taking over in March.
In New York, for example, Bally Bet accounted for a state-low 0.1% of online betting handle through the first six months of 2023, four times less than Resorts World Bet, which was second-lowest among nine operators.
States where Bally Bet is relaunched have not yet published revenue reports for that time period. Any information Bally’s gives on the new-look app’s performance will be the first investors get.
Savings on the way for Bally Bet?
The company has indicated that a variable cost structure enables significant cost savings and reduced risk compared to a fixed cost structure.
Meanwhile, the trend for US sportsbooks has been to move to proprietary technology and away from third parties.
Look for Reeves to tout any initial savings in the short period where some states have switched over.