Casino operator Bally’s Corp. and Sinclair Broadcast Group announced an agreement Thursday in which 21 regional sports networks – currently under the Fox label – will be renamed with the Bally’s brand.
The deal allows Bally’s – which is acquiring sports betting platform Bet.Works for $125 million – to integrate sports gambling content into the sports network’s broadcasts and within the other 190 television stations that Sinclair operates in 88 markets across the U.S.
Sinclair CEO Chris Ripley said on an early morning conference call that Sinclair reaches 70% of all U.S. households.
The deal doesn’t include naming rights to the Sinclair-operated YES Network, Marquee Network, and Tennis Channel.
For Bally’s, the agreement expands its planned interactive gaming division to reach new customers as the Rhode Island-based company grows its presence across the U.S.
Bally’s, which has been on a casino acquisition path for the past 18 months, is expected to have 14 casinos in 10 states after three pending transactions are finalized.
“We believe this agreement will transform Bally’s into a full-service casino, igaming, and sports betting company,” Bally’s CEO George Papanier said Thursday.
As for financial terms, Sinclair will be able to acquire 14.9% of Bally’s common shares at 1 cent per share, known as a penny warrant. Sinclair will also receive warrants to purchase up to an additional 10% of Bally’s stock. The shares are contingent on the “achievement of various performance metrics,” which were not disclosed.
Sinclair will also receive options to purchase an additional 5% of Bally’s common shares, starting in four years.
Bally’s, which plans to make increase its sports betting presence through the Bet.Works deal will now have exclusive access to fans of 42 NBA, Major League Baseball, and NHL teams whose games are currently broadcasted on Sinclair’s regional sports networks. Bally’s and Sinclair officials’ plan is for viewers to eventually be able to wager on games with Bally’s directly from their televisions.
Sports betting is currently legal and regulated in 19 states and Washington D.C. Six additional states have approved sports betting, but the activity is awaiting regulation other legislative ratifications.
Bet.Works currently provide a sports betting platform to casino operators in New Jersey, Iowa, Indiana, and Colorado. Bally’s plans to grow that reach into additional states.
Papanier said the acquisition of Bet.Works allows Bally’s 14 million active customers to have a unified brand for both casinos and interactive gaming with both a single player’s loyalty card and a customer rewards system. He told analysts on Thursday’s call that at least 10% of those customers could become sports betting customers.
Truist Securities gaming analyst Barry Jonas said in an early Thursday research note the two agreements change Bally’s profile as just a regional casino company.
“Bally’s interactive division is now set to be a meaningful player in the burgeoning online sports betting space, with an omni-channel strategy taking the Bally’s brand to casinos, online sportsbooks/iGaming, and now 21 Sinclair regional sports networks about to be rebranded with the Bally’s name,” Jonas said.
In October, the company, then known as Twin River Worldwide Holdings, paid Caesars Entertainment $20 million for control of the Bally name, brand, and intellectual property. The corporate name change took effect on Nov. 9.
Analysts saw the deal as the latest example of a casino company and betting operator going into partnership with a media company in pursuit of new customers. The largest deal so far has been Penn National Gaming acquiring 36% of sports media platform Barstool Sports for $163 million.
“This arrangement represents an opportunity to revolutionize the U.S. sports betting, gaming, and media industries,” Bally’s Chairman Soo Kim said in a statement.
Shares of Bally’s, traded on the Nasdaq, closed at $37.01 on Thursday, up $6.40 or 20.91%
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
