Bally's Might Consider Selling Its Sports Wagering Online Division
Bally's (NYSE: BALY) Bally Bet division, which encompasses the company's assortment of iGaming and online sports betting assets, may think about selling its sports betting section.
This speculation surfaced in an article on the Off Shore Gaming Association (OSGA) blog. Although Bally's recently declared plans to revamp its online sports betting services through a new technology partnership with Kambi, there could be another reason behind it. The company is having difficulty achieving an adequate market share in the states where it provides mobile sports wagering.
A source who isn't identified informed the publication that Bally's might consider selling the sports betting segment to generate value for investors rather than allowing it to wither away like FOX Bet did.
"I doubt Bally's has any real long-term plans for their sports betting product," the source told OSGA. "They were probably hoping their name recognition would take them to the top. However, they're known more for their land-based casino products and hotels, not sports betting."
Bally Bet is only operational in six states — Arizona, Colorado, Indiana, Iowa, New York, and Virginia — along with Ontario, Canada. This represents a tiny fraction of the 34 states and Washington, DC where sports wagering is legal and operational.
Land-Based Casinos Aren't Helping Bally’s
Bally's, based in Rhode Island, is a regional casino operator with properties in ten states. But its land-based casinos aren't contributing significantly to its sports wagering reputation.
The business operates Bally's locations on the Atlantic City Boardwalk and in Lake Tahoe, as well as the Tropicana on the Las Vegas Strip. However, it doesn't offer mobile sports betting in Nevada or New Jersey — two of the most significant sports betting markets in the country. Similarly, Bally's operates four casinos in Colorado, but has a marginal sports betting market share in that state.
In addition, Bally's North American interactive unit experienced increased losses during the second quarter, which is troublesome for its online gaming operations.
"Given BALY's stated transition to a variable-cost tech strategy and the trend toward profitability seen across the broader US OSB/iCasino space this earnings season, we find sequentially worsening losses disappointing for investors and potentially impacting expectations for timing to inflect to profitability," wrote Stifel analyst Jeffrey Stantial in a recent report.
What’s Next for Bally’s in the Sports Betting Space
Bally's has alternatives regarding the future of its online sports wagering operation, such as investing the necessary funds to increase its market share. However, that would be costly, and the endeavor might not earn a return, as the regulated sports betting industry in the US is largely ruled by two participants, FanDuel and DraftKings.
Another possibility for Bally's is to serve as a business-to-business player in the iGaming industry. It could potentially picture licensing out its recognized brand for internet casinos while allowing partners to use the sports betting brand of their choice.
As for selling its online sports betting division, potential buyers might be intrigued due to its privileges in states with restricted licenses like Arizona and New York. The question is how much prospective buyers would be ready to pay for that.
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Source: www.casino.org
