Posted on: August 7, 2023, 09:52h.
Last updated on: August 7, 2023, 10:03h.
Bally’s (NYSE: BALY) Bally Bet arm, which includes the operator’s portfolio of iGaming and online sports wagering assets, could consider a sale of the sports betting segment.
That rumor recently appeared in a post on the Off Shore Gaming Association (OSGA) blog, which notes that although Bally’s recently announced plans to revamp its online sports betting operations through a new technology partnership with Kambi, the company is struggling to attain adequate market share in the states in which it offers mobile sports wagering.
An unidentified source told the publication that Bally’s could look to sell the sports betting unit in an effort to wring some value out of it for investors rather than simply letting the business die a la FOX Bet.
I’d be quite surprised if Bally’s has any real long-term plans for their sports betting product. Undoubtedly, the company believed its name recognition would take it to the top, but they are really known for their land-based casino products and hotels, not sports betting,” the source told OSGA.
Bally Bet is live in just six states — Arizona, Colorado, Indiana, Iowa, New York, and Virginia — as well as in Ontario, Canada. That’s a scant percentage of the 34 states and Washington, DC in which sports wagering is live and legal.
Land-Based Casinos Not Helping Bally’s Cause
Rhode Island-based Bally’s is a regional casino operator with properties in 10 states, but those venues aren’t helping the company bolster its sports wagering status.
The firm runs namesake casino resorts on the Atlantic City Boardwalk and in Lake Tahoe, as well as the Tropicana on the Las Vegas Strip, but it doesn’t offer mobile sports wagering in Nevada or New Jersey — two of the biggest sports betting markets in the country. Likewise, Bally’s runs four casinos in Colorado, but it has negligible sports betting market share in that state.
Compounding Bally’s woes on the digital gaming front is the point that its North American interactive unit endured increased losses in the second quarter.
“Given BALY’s stated transition to a variable-cost tech strategy and a trend towards profitability seen across the broader U.S. OSB/iCasino space this earnings season, we see sequentially worsening losses as 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 Sports Betting Space
Bally’s has options when it comes to the future of its online sports wagering arm, including devoting the financial resources necessary to increase its market share. However, that wouldn’t be cheap and the endeavor might not pay off given that the regulated sports wagering landscape in the US is dominated by just two participants, FanDuel and DraftKings.
Likewise, as OSGA points out, Bally’s could consider being a business-to-business player in the iGaming space, potentially licensing out its well-known brand for internet casinos while allowing partners to use the sports betting brand of their choice.
As for a sale of the online sports betting unit, Bally’s could find interested suitors due to its licenses in states, such as Arizona and New York, that limit the number of those permits. How much prospective buyers are willing to pay is another matter.