There will be no $2 billion takeover of Bally Bet parent company Bally’s by Chairman Soo Kim‘s Standard General.
The company reported Thursday its board decided not to accept the offer. Instead, it will spend $300 million to $500 million buying back its own stock through a Dutch auction.
“While we are of course disappointed with the outcome of the discussions of our proposal, as we said from the outset, we intend to remain a supportive, long-term investor in the Company,” Kim said.
Bally Bet 2.0 now live in Arizona
The updated platform for Bally Bet is live in Arizona as of Wednesday with more states coming throughout the year.
CEO Lee Fenton lauded his team for the launch and described AZ sports betting as a key market for Bally’s on Thursday morning’s investor call:
“This is a significant milestone for us and represents huge efforts by the team. I’m proud of all the work that’s been done to bring our technology stack together. Arizona is a key market for us with our groundbreaking WNBA partnership, marketing spend with the Diamondbacks, and our media partnership with Sinclair.”
NY sports betting launch this quarter
Bally Bet will launch in New York during the second quarter now that the 2.0 platform with Gamesys technology is available. That means all nine mobile NY sportsbooks should be live by the end of June as long as Bally’s sticks to schedule.
All the other operators launched between Jan. 8 and early March, giving them a significant head start. Do not expect Bally’s to come out swinging with big offers to try and buy market share though.
“We will be cautious as we keep a keen eye on marketing spend and how to navigate a high-tax environment in sports betting,” Fenton said.
Online casino will drive second-half focus
Bally Bet now has market access to 18 states after signing its partnership with the NFL‘s Cleveland Browns last week. Which markets get the most focus will depend on opportunities to launch its online casino, as well as whether those markets are currently live or trending toward online casino legislation, Fenton said.
Online casino casts a wider net than sports betting and it is cheaper to cross-sell sports betting to someone already in your database. In New Jersey, Bally’s is paying about $200 per customer with both iGaming and online sports betting now live.
That will be the model for additional states, Fenton said. NJ revenue of $600,000 in January grew to $1.5 million in March, which Fenton called a “great ramp.”
Bally Bet focus on customer acquisition funnel
Bally Bet has been active despite the 2.0 platform only launching Wednesday, Fenton said:
“We’ve been doing a lot in building a proper funnel with … awareness, whether it’s through Bally Sports or through free-play opportunities that have been building our data set. That’s where we continue to focus. We will work very hard on return on investment from our marketing and stay disciplined.”
Bally’s has been on something of a bolt-on buying spree for its interactive segment capped by the $2.8 billion purchase of Gamesys.
Purchases include the Bet.Works platform, DFS operator Monkey Knife Fight, free-to-play game provider SportCaller and even the AVP beach volleyball tour.
B2B services for theScore Bet end in July
Bally’s Bet.Works platform will end its B2B business with theScore Bet in July, Fenton said. Penn National confirmed on its call that the brand is switching platforms in the third quarter.
Bally’s did not give a financial impact for the end of the partnership. The company reported $15.2 million in first-quarter revenue for its North American interactive business but various costs dragged the segment to negative EBITDA of $19.3 million.
The first quarter had extra costs associated for building out the 2.0 platform, Fenton said. While costs could rise if Bally’s chooses to put its “foot to the floor” on rollout plans, right now the segment is still on track to lose $60 million this year.
Much bigger business than just Bally Bet
It is important to remember the interactive segment is still quite a small part of the larger Bally’s business.
The company’s land-based casino segment reported $280 million in revenue and $73.8 million in adjusted EBITDA for the quarter.
There will be another big project running alongside the continued rollout of Bally Bet 2.0 as well. Bally’s won the sole Chicago casino license with its $1.7 billion bid.