Bally’s Continues Acquisition Spree With $90 Million Deal For Monkey Knife Fight

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MKF Ballys Deal

Bally’s has acquired daily fantasy sports firm Monkey Knife Fight (MKF) for up to $90 million in stock.

Bally’s said the acquisition was part of its strategy to become the first “truly vertically integrated” online gambling company in the US, with both B2B and B2C arms.

The deal is expected to close in the first quarter of 2021. MKF will receive immediately exercisable penny warrants to purchase up to $50 million in Bally’s common shares.

The DFS firm will also get warrants for up to $20 million in additional Bally’s shares on each of the first and second anniversaries of closing.

What is MKF?

According to Bally’s, MKF is the third-largest DFS operator in North America. It has 180,000 registered users and 80,000 depositing players.

The business is active in 37 states, and will allow Bally’s to acquire customers in states where sports betting is not yet legal. That edge is one of the reasons FanDuel and DraftKings currently lead the US sports betting market.

“MKF will support our plans to develop a potential sports bettors database in states such as California, Florida and Texas. These states are expected to account for 20-25% of US sports betting revenues,” Bally’s noted in a press release.

“It will also enable us to build a player database in Canada, a market expected to authorize sports betting in the near future.”

Having a DFS brand can also help keep players at Bally’s who otherwise might have moved to FanDuel or DraftKings to play fantasy.

The operator’s share price was last up 4% pre-market.

Bally’s building an omni-channel giant

The acquisition follow Bally’s recent media partnership with Sinclair Broadcast Group and its pending acquisition of betting tech firm Bet.Works. The operator also rebranded from its old name Twin River.

CEO George Papanier added: “The MKF acquisition will allow Bally’s to leverage its current customer database as well as MKF’s collection of depositing players. These assets will also provide Bally’s with a significant advantage in launching its own B2C sports betting operations.”

The deal makes the company just the third sports betting operator to own a DFS firm. However, the trend might not stop there.

In fact, MKF is one of several DFS companies attracting attention as a potential back door into sports betting.