Bally’s Corp. had an active first quarter of 2021, closing its purchases of a daily fantasy sports operator and social game provider while announcing in April it reached an agreement to buy a United Kingdom-based online gaming operator for $2.8 billion.
Meanwhile, the company said it buying the operations of Tropicana Las Vegas from Gaming and Leisure properties that included several sale-leaseback agreements with the real estate investment trust that involved Bally’s properties in Colorado and Illinois.
Why wouldn’t the quarter have been as active as the past 18 months? The Rhode Island-based casino operator has grown to 12 properties in eight states and is in the process of establishing a sports betting and interactive gaming division.
“Management indicated it could launch its sports betting app in its first state (Colorado) by the end of the month and expects to be live in three additional states before yearend,” Union Gaming Group analyst John DeCree told investors following the company’s quarterly earnings release Monday.
DeCree said customer awareness of Bally’s “has been rapidly building” after the company’s deal with Sinclair Broadcast Group led to the rebranding on 19 regional sports networks as Bally’s Sports on April 1.
Bally’s revenue in the quarter increased 76.2% to $192.3 million in the quarter, due to COVID-19 restrictions being lifted during March and the added results from Casino KC, Casino Vicksburg, Bally’s Atlantic City, and Eldorado Shreveport, which were acquired in the second half of 2020.
Bally’s net loss for the quarter grew to $10.7 million, compared to $8.9 million a year earlier.
The company’s adjusted cash flow of $52.5 million was a 137.9% increase over the 2020 first quarter.
“As we approach historical operating levels, we are encouraged by the performance at many of our properties this quarter,” Bally’s CEO George Papanier said in a statement. “When coupled with ongoing capital initiatives, (the deals) offer tremendous growth opportunities and the potential to deliver strong results over the coming quarters.”
The Tropicana acquisition is expected to close this year and will give Bally’s a location on the Strip. In April, Bally’s also closed on its acquisition of on MontBleu Resort in Lake Tahoe, Nevada.
Bally’s executives have had much of its casino portfolio would be rebranded at Bally’s.
Stifel gaming analyst Jeffrey Stantial told investors that incremental mergers and acquisitions for Bally’s will continue to be a business plan.
“We suspect management may not be done on its ongoing buying spree,” Stantial told investors.
The biggest deal in place is the company’s $2.8 billion merger with Gamesys, a global online gaming operator based in the United Kingdom.
Bally’s chairman Soo Kim said in a statement last month that the combination marks a “transformational step in our journey to become a leading integrated, omnichannel gaming company with a B2B2C business.”
DeCree said the market is giving very little valuation credit for Bally interactive, both relative to other companies and as a standalone business.
“While investors are beginning to scrutinize market share estimates for many players in the U.S. betting and gaming space, Bally is poised to surprise to the upside,” DeCree said.
Shares of Bally’s closed at $55.17 in trading on the New York Stock Exchange Monday, down $3.10, or 5.32%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
