Bally’s Rethinks Sports Betting As Plans Fall Apart
Ballys sportsbook was late to the US sports betting party, but it made a huge splash when it entered the pool in late-2020 and looked to be positioning itself as a significant player in the market.
And why wouldn’t it be? The company was on a meteoric rise as a national casino operator.
Five years earlier, the company, then known as Twin River, was a blip on the gambling radar. Growing from a two-property company in 2015, Bally’s now boasts one of the most robust casino portfolios in the country. The company owns and operates 15 casinos in 10 states, is building a billion-dollar casino in Chicago, and is on the shortlist for a coveted New York City casino license.
However, lost in the Twin River success story was the company’s near demise in 2009, when it operated a slot parlor in Rhode Island and several racetracks in Colorado. Twin River came out on the other side and morphed into a gambling giant, but the company is far from bulletproof. Its bankruptcy highlights how quickly things can go from good to bad or bad to good in the gambling industry.
Growth was fairly slow during the 2010s. That all changed following a reverse merger with Dover Downs in 2019 that took the company public. Twin River suddenly had its sights set on any casino up for sale, and growth exploded, with Twin River scooping up regional casinos around the country in 2020 and 2021. It also purchased the Bally’s brand from Caesars Entertainment, setting the stage for a national rebrand.
Its eyes then shifted to online gambling. The company added several online assets in short order:
- Daily Fantasy Sports operator Monkey Knife Fight
- The Bet.Works sports betting platform
- The Gamesys online gambling platform
There was also a major branding deal to rename Sinclair’s regional sports networks to Bally’s Sports and the acquisition of Major League Fishing and the AVP Beach Volleyball Tour.
Like its casino property acquisitions, all of the above occurred in the space of a year, and there were high hopes for the company’s online division, Bally Bets.
Fast forward to 2023, and the company’s online gambling division is in dire straits.
- Monkey Knife Fight announced its closure on Feb. 27.
- Bally’s wrote down MKF and Bet.Works in its most recent earnings report (a nearly $400 million impairment between Bet.Works and MKF).
- Bally’s was granted a New York sports betting license but was the last of the nine licensed operators to launch there.
- In January, Bally’s announced it is reducing its digital workforce by 15%.
- With Sinclair’s Diamond Sports hurtling towards bankruptcy, the Bally-branded regional sports networks are on the verge of losing their team contracts. Bally’s has zero liability related to Diamond Sports.
Meet the New Boss
The tumult has led to a change at the top, with CEO Lee Fenton (whose tenure lasted just 18 months) being replaced by Robeson Reeves on March 31. Reeves previously served as President of Bally’s interactive division.
The appointment of Reeves indicates Bally’s isn’t ready to throw in the online gambling towel. That sentiment was echoed by Reeves, who has proposed charting a new course.
During the company’s Q4 earnings call, Reeves said:
“On sports, we recognize that the Bet.Works acquisition did not give us the platform required to develop a competitive product. We didn’t react fast enough there, and this will not happen again. We are confident there are more economical and nimble solutions out there and have spent the past five months analyzing them deeply. Sports for us is an acquisition tool. It can drive further engagements for the Bally’s brand. So when we approach the choice of technology, we’ll make sure we have that mindset.”
Reeves also said, “as a company, we will prioritize… growing North America Interactive in a profitable way.” And in its Q4 earnings report, Reeves said, “We remain committed to taking a deep dive approach in North America to ensure that investments we make in sports have a near-term path to profitability. In iCasino states, we’ve increased our market share in both New Jersey and Ontario as we integrate this business in a scalable way.”
Adding everything together, it sounds like Bally’s will dissolve its in-house platform and look to outsource its US sports betting platform to a third-party supplier. As Reeves noted, the goals are acquisition and profitability.
That’s a bold strategy, but to Bally’s credit, it has recognized the inevitable. Carrying on and trying to force a square peg into a round hole is throwing good money after bad. Wiping the slate clean, properly valuing current assets (particularly the Gamesys platform), and beginning afresh is the smart play.
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