An executive with Bally’s Corp, which is in the process of acquiring the Tropicana Las Vegas, told Nevada gaming regulators Wednesday that its recently completed acquisition of Gamesys Group will help transform the company into a global, data-driven, omnichannel gaming company that can compete with the best in the industry.
The Nevada Gaming Control Board recommended that the Gaming Commission approve Bally’s financial restructuring to complete its Gamesys transaction for $2.7 billion in stock and cash, effective earlier this month.
Bally’s CFO Steve Capp said the acquisition of Gamesys, a UK-based online-gaming operator, provides diversification, given that it’s based not only in the UK, but elsewhere in Europe and in Asia as well. It also has a U.S. operation in New Jersey.
The transaction doubles the size of the existing Bally’s Corp. and brings online betting and sports betting expertise to round out its offerings, Capp said.
“Pre-transaction, Bally’s consisted mostly of retail brick-and-mortar operations, including most recently the MontBleu in Lake Tahoe (renamed Bally’s Lake Tahoe),” Capp said. “The Gamesys acquisition is purposed in bringing that expertise into the family and enabling an execution on a strategy to provide to our customers a suite of gaming and entertainment products and fan-engagement opportunities ranging from brick-and-mortar to mobile sports betting and online casino products.”
With the transaction, Capp said it’s believed Bally’s is the first in the industry with 50% of its revenue and cash flow from retail and 50% from online-gaming operations.
“The diversification is not only with online products, but also the international component, including the UK, EU, and Asia,” Capp said. “It’s strengthening our cash-flow profile.”
There’s been a lot of growth since Capp joined the board in 2012, when it had one property in Rhode Island. The company wanted to grow and diversify and started with the acquisition of Hard Rock in Biloxi, Mississippi, in 2014.
That strategy continued in 2019, when the private company, instead of doing an expensive initial public offering, acquired Dover Downs Gaming, which was was listed on the New York Stock Exchange. That provided an “avenue of liquidity to existing shareholders at the time who were creditors and became shareholders,” Capp said.
By going public, it enabled the company to use stock as currency for future mergers and acquisition — with Gamesys as an example, Capp said.
“The strategy was originally designed to become bigger and seize the opportunity of a scale economy and capitalize on management expertise,” Capp said. “That evolved over time and a couple of years ago, we realized the opportunity in this industry is bigger than just expanding brick-and-mortar and becoming broadly diversified in the U.S. We realized, as many peers have and actually been in front of us, that there are bigger opportunities here to become a digital- and data-driven company. It’s a little easier said than done, because it takes a lot of software and engineering expertise, and that expertise is not easily acquired.”
Bally’s changed its name from Twin River Worldwide Holdings after it acquired the name from Caesars Entertainment in 2020.
Bally’s owns and manages 14 casinos in 10 states and a horse racetrack in Colorado and has access to online sport betting licenses in 15 states. In June, it announced it completed an acquisition of Bet.Works, a sports betting platform provider to operators in New Jersey, Iowa, Indiana, and Colorado, for $125 million, half paid in Bally’s common stock, which Bet.Works shareholders agreed to hold for at least one year.
Bally’s also owns Monkey Knife Fight, a growing daily fantasy sports site in North America; SportCaller, a global B2B free-to-play game provider; and Telescope Inc., a provider of real-time fan-engagement solutions.
The company has about 10,000 employees and 5,300 hotel rooms.
In a deal set to close by early 2022 at the latest, Bally’s has also purchased the Tropicana Las Vegas from Gaming and Leisure Properties, Inc. for $308 million.
Capp went on to describe the company’s partnership with Sinclair Broadcast Group to broadcast Bally’s-produced content during non-game windows on Sinclair’s 19 regional sports networks rebranded as Bally Sports. He said it “puts the pieces of the puzzle together” to begin to create an omnichannel provider.
“We intend to become opportunistic through the convergence of multiple industries, including entertainment casino products and media technology,” Capp said. “Through that convergence, we seek to provide our customers a seamless access to casino entertainment and fan engagement through our partnership with Sinclair. It’s the wrapping of those various capabilities of media, technology, online gaming, and retail gaming that we believe positions this company uniquely, together with our international diversification, to be a shoulder-to-shoulder competitor with the best in this industry both domestically and internationally.
