Bally’s To Remain ‘Very Measured’ In Bally Bet Reinvestment

Written By

Updated on

Bally Bet

Bally’s wants to offer a competitive sportsbook in Bally Bet, but is not necessarily ready to back that statement up financially.

“… We are very, very prudent with how we’re approaching our positioning with (online sports betting) from a reinvestment standpoint,” CFO Marcus Glover said Wednesday. “I want to, again, have a competitive offering, but we’ll be very measured with how much reinvestment we actually put on the sports side of things.”

The North American sports betting and iGaming segment reported a $10.2 million adjusted EBITDA loss for the first quarter and nearly flat on last year. That is from $41.5 million in revenue, which jumped 70.2% on strong iGaming results, Glover said.

The earnings call did not move the stock much. Bally’s opened Thursday at $13.04, down 0.9% from Wednesday‘s close.

Bally Bet money goes where iGaming could be

CEO Robeson Reeves said the interactive investment is going into states that either have iGaming already or could in the future.

Bally’s transitioned to third-party tech providers Kambi and White Hat Gaming last year after throwing in the towel on billions of dollars of interactive investment. That allows Bally Bet to be a quality product while really focusing on sports betting as a funnel to online casino, Glover said.

Bally Bet is in seven states and will launch three more in the second half of the year. One of those is Massachusetts, where Bally Bet will more than likely cross-sell bettors into its iGaming offering in Rhode Island.

Rhode Island launched March 5 and generated $1.2 million in GGR in the partial month. April featured “an accelerating pace of revenue,” Reeves said.

iGaming results all positive

Bally’s outlined the solid quarters from its other three iGaming jurisdictions in its presentation.

New Jersey, which launched December 2021, is on pace for annualized gross revenue of more than $90 million. The growth in its customer value is from its improved product, the company said.

Ontario saw triple-digit gross revenue growth compared to last year as Bally’s optimized its acquisition and reactivation strategy, the company said. The focus is on building its database and improving average revenue per user.

Pennsylvania, which launched last June, saw “significant expansion” of its player base through retention and a growing base of active customers.

Still projecting $30M adjusted EBITDA loss

Reeves explained Bally’s North American interactive division is still on track for the guided $30 million adjusted EBITDA loss for the year as the loss will not be linear across the quarters.

When Bally Bet will crawl out of the earnings basement is not clear.

“We haven’t provided any kind of guidance beyond that in terms of where we think the business will get from a financial performance beyond 2024, obviously better than where we finished,” Senior VP and Treasurer Charlie Diao said. “But ideally, we love to get that business to from negative 30 to zero and then eventually positive. But we haven’t given a time horizon specifically on this.”

Also hurting the segment in Q1 was higher than expected labor costs to make sure iGaming could launch on time, Glover said.

Bigger projects than Bally Bet

While Bally’s hopes iGaming will turn into a significant business segment in the future, it has bigger fish to fry at the moment: