Possibility of Bally’s Sports Betting Unit Sale Under Consideration

Posted on: August 7, 2023, 09:52h. 

Last updated on: August 7, 2023, 09:52h.

Bally’s (NYSE: BALY) is considering a sale of its sports betting segment, which is part of its Bally Bet arm offering iGaming and online sports wagering assets.

A roulette table at Bally’s Twin River Lincoln Casino Resort in Rhode Island. A rumor surfaced that the company is looking to sell its sports betting business. (Image: Bally’s Corporation)

A recent rumor suggests that Bally’s might sell its sports betting unit in order to generate value for its investors. Although Bally’s had plans to revamp its online sports betting operations through a new technology partnership with Kambi, it is struggling to gain sufficient market share in the states where it offers mobile sports wagering. An anonymous source stated that selling the sports betting segment could be a better option than letting the business decline, as was the case with 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 currently available in six states: Arizona, Colorado, Indiana, Iowa, New York, and Virginia, as well as Ontario, Canada, which is a small portion compared to the 34 states and Washington, DC where sports wagering is legal.

Land-Based Casinos Not Helping Bally’s Cause

Rhode Island-based Bally’s operates casinos in 10 states, but these venues are not contributing to the company’s success in the sports wagering market.

For example, Bally’s operates its own casino resorts in Atlantic City, Lake Tahoe, and the Las Vegas Strip. However, it does not offer mobile sports wagering in Nevada or New Jersey, two of the largest sports betting markets in the country. Similarly, Bally’s has four casinos in Colorado, but it has minimal market share in the state’s sports betting industry.

Bally’s is facing increased losses in its North American interactive unit in the second quarter, adding to its challenges in the digital gaming sector.

“Given BALY’s transition to a variable-cost tech strategy and the trend towards profitability in the broader US OSB/iCasino space this earnings season, the sequentially worsening losses are disappointing for investors and could affect expectations for the timing of profitability,” wrote Stifel analyst Jeffrey Stantial in a recent report.

What’s Next for Bally’s in the Sports Betting Space

Bally’s has several options for its online sports wagering arm. It could allocate financial resources to increase its market share, but this could be costly and not necessarily profitable considering the dominance of FanDuel and DraftKings in the regulated US sports wagering market. Another possibility, as suggested by the OSGA, is for Bally’s to become a business-to-business player in the iGaming industry, licensing its well-known brand to internet casinos while allowing partners to use the sports betting brand of their choice.

Alternatively, Bally’s could pursue a sale of its online sports betting unit. The company’s licenses in states like Arizona and New York, where the number of permits is limited, could attract interested buyers. However, the price potential buyers are willing to pay remains uncertain.

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