Following the Bally’s bouncing ball and singing along is not easy and it is getting harder. Bally’s seems always to be in motion and the narrative constantly shifting.
On Saturday, December 6, Bally’s opened its casino in Baton Rouge. The company spent $140 million to sink the former riverboat, the Belle of Baton Rouge, and build a new casino. The casino site has a checkered and challenged past; it has had enough owners and names to form its own baseball team. As the Belle, it had financing and legal challenges; one ownership group even managed to become entangled in the famous scandal involving the governor and the owner of the San Francisco 49ers. It was a Catfish, a Rouge, and a Belle. New owners and new names did not bring instant success, however. Bally’s stands a better chance than its predecessors. Bally’s Baton Rouge was built on land and that by itself has proven to be an important element for success in Louisiana.
The opening was a rare occurrence for Bally’s. The new casino was greeted with enthusiasm and praise by local media, city officials, the business community, the state’s gaming regulatory agency, the general public, even the investment community. Initially at least, Bally’s Baton Rouge is receiving the exact opposite reception that Bally’s Chicago was subjected to, panned by one and all. Bally’s undeclared project in Las Vegas is not being warmly reviewed and Bally’s New York City too has had more critics than supporters.
Many of Bally’s critics have been in the media and the investment and lending communities. In Chicago, the press has been relentless in criticizing the project there. Every month, one or more outlets gleefully report Bally’s failure to reach its predicted numbers. Investors and lenders are equally critical; the property is going to cost nearly $2 billion and will pay 30 percent of its gaming revenue in taxes and fees. There is not a lot of room for error. Critics in Las Vegas wonder if Bally’s has the skills or financing to build a successful property on the Las Vegas Strip.
New York is going to be as challenging, if not more so. The buildout of the Bally’s Bronx project will cost about $4 billion, with a tax rate of 50 percent. That leaves even less room for error. Until recently, the critics in New York were echoing their counterparts in Chicago and Las Vegas.
That may be changing and Baton Rouge may be contributing to the change. The Baton Rouge property is small potatoes compared with Chicago, New York City, and Las Vegas. But it appears to be a win for the company. And a win or two it needed. Barry Jonas of Truist Securities thinks a deal to sell Twin River Lincoln in Rhode Island to GLPI and lease it back is the narrative shifting big. Jonas said, Bally’s is now “in better graces with lenders.”
Bally’s is a 21st century gaming company. In 2004, a group of investors bought a couple of racetracks in the UK and U.S.; one of those, a dog track with slot machines in Rhode Island, set the stage for the company that would become Bally’s. The recession hit that company hard. In time, a new group of investors took the reins and eventually, with a reverse merger, the company wound up on the public market. Several more changes led to the current structure: Standard General is the primary stockholder and Soo Kim is the chairman and driving force. Bally’s storied name came along with one of its purchases; deeming Bally’s to be a more recognizable brand than Twin Rivers, the company switched.
Kim’s leadership resulted in the casino licenses in Chicago, New York City, and most recently control of Star Entertainment in Australia. The company also has online sports betting and igaming in the United States and abroad. Kim appears to be a master of procuring both opportunity and financing. Although every time Bally’s bites off another big piece of something, the critics predict that it will not secure the necessary financing. In the game between Bally’s and the critics, Kim and Bally’s are still way ahead on the scorecard.
It is hard to guess what the long-term goal might be; Bally’s could be set on replacing Caesars as the big dog in gaming, or the Sands Las Vegas as revenue champ, or possibly Wynn Resorts with a stellar reputation for class, profit, and dividends. Those are high bars, but for the moment, Bally’s is the most active and entertaining company in gaming, its narrative constantly shifting and its reach expanding.
