Bally’s to Cut Sports Betting Losses, Emphasize Online Casino in 2023

Incoming CEO Robeson Reeves says that the future of Bally’s Corporation lies in online casino gaming more than in sports betting. It’s the latest of several companies to have made that pivot in the face of headwinds in the highly competitive US sports betting space. The decision may come as a small consolation to investors. Bally’s reported $425 million in losses for 2022, including a $390 million write-down for the North American Interactive Division. 

Bally’s Interactive products include the Bally Bet sportsbook, Bally Casino, and Monkey Knife Fight. The latter daily fantasy sports site announced its shutdown this week.

According to Reeves, the silver lining in all this is that Bally Casino has been performing well. He will officially take over at the end of March, replacing Lee Fenton, who has led Bally’s since it acquired his former company GameSys. Reeves has already outlined his plan to turn the company around and make it profitable again.

Under Reeves’ leadership, Bally will focus on the iGaming business while still making improvements to Bally Bet. He predicts that losses in 2023 will decrease significantly to between $50 and $60 million and that the company and its Interactive division will both achieve profitability in 2024.

Reeves will also oversee retail expansion for the company. Existing plans include an upcoming $1.7 billion resort casino in downtown Chicago and a bid for one of New York’s downstate casino licenses.

Bally’s Posts Increase In Revenue, But Massive Losses

Bally’s Corporation reported strong revenue growth in 2022, with $2.26 billion in revenue, up by 70.6% year-on-year. By the end of the year, that growth had slowed considerably. Q4’s  $576.7 million represented just a 5.3% year-on-year increase.

Bally’s reported losses of $487.5 million in Q4, including asset impairment charges of $464 million. Such charges are a formal declaration that the intangible value (or “goodwill”) associated with a brand or product is less than its previous valuation. They’ve become commonplace in recent decades as a result of historical overvaluations that created the dot-com bubble and subsequent recession.

In Bally’s case, the write-down included a $390 million reduction in the valuation of Bally Bet and Monkey Knife Fight, while the rest came from the division’s international components.

Bally’s Interactive consists of GameSys and other recent acquisitions. The North American component is still relatively small. In Q4, Bally’s Interactive saw only $26 million in revenue from North America, 60% of which came from Bally’s online casino in New Jersey. The company also operates an online casino in Ontario, Canada, and a sportsbook in six states plus Ontario, all of which combined to provide the other 40%.

Bally’s Will Focus on iGaming in 2023

The Interactive Division’s poor results have already led to a 15% reduction in its workforce. However, Reeves says that most of the losses come from the sports vertical, while iGaming is performing better.

Reeves attributes Bally Casino NJ’s success to adding new payment options and other enhancements. He believes the Ontario online casino is on course to produce similar results.

As a result, the CEO announced he plans to prioritize iGaming going forwards. He’s not the only one. 888 Holdings (SI Sportsbook) and Kindred Group (Unibet) have similarly told investors they will focus on states where they can offer online casino games rather than only sports betting. Some smaller sports-focused companies like Fubo and TwinSpires have exited the online betting space entirely.

One of Bally’s objectives for 2023 is to expand its online casino into Pennsylvania in the first half of the year. Beyond that, the company has pushed for the legalization of online casinos in Rhode Island, its home state. The state’s Senate President, Dominick J. Ruggerio, has expressed support for the idea, though a bill has yet to appear.

Reeves has yet to indicate whether the iGaming division will expand into other states with online casinos, including Michigan and West Virginia. Nevertheless, he emphasized to investors that Bally’s will be “iCasino first” going forward.

Bally’s To Offload Bet.Works, Improve Bally Bet

Reeves admits the company’s acquisition of Bet.Works has been a failure. The platform has not provided Bally Bet with the necessary performance to remain competitive, and the company did not recognize this issue quickly enough.

As a result, Bally’s will seek to offload Bet.Works and contract with a third-party supplier to improve its sports betting product and save on costs. Reeves believes that such strategic partnerships are necessary to make Bally Bet competitive.

In the Q4 earnings call, Reeves stated that he plans on taking a data-based approach to leading the company:

You should expect me to follow the data. I’ll be analytical in our approach to decision making to deliver customer-centric, profitable solutions. I believe the most valuable asset to deploy is focus. I will focus on opportunities with scale and go after them harder.

Observers also expected the company to sell Monkey Knife Fight, which generated only $4.7 million in revenue in 2022, a 36% year-on-year decline. Instead, on Feb. 28, it simply decided to discontinue the brand and take the losses.

American Plans Also Include Retail Expansion

On the retail front, Bally’s most significant project is its $1.7 billion downtown Chicago resort. The company has made enormous strides on that plan recently, including formal approval for a temporary casino and the decision to evict current tenants from the site of the permanent property. The casino is set to open in 2026, and the hopes are for the temporary casino to begin operating this year.

The company is also eyeing New York. Recently, it entered negotiations with Trump Golf Links to obtain land for a Bronx casino bid. The process is in its initial steps, and competition is fierce, with the New York State Gaming Commission fielding hundreds of questions from interested parties.

Outside those massive projects, Bally’s is involved with plans to open a mini-casino in State College, PA. However, that is facing a legal challenge from Stadium Casino, which is looking to the PA Supreme Court to overturn the regulator’s decision to award a license to Bally’s business partner, Ira Lubert.

About the Author

Chav Vasilev

Chav Vasilev

After years of managing fast-casual restaurants, Chav turned his passion for sports and occasional slot wins into a career as an iGaming writer. Sharing his time between Europe and the US, he has been exposed to betting and gambling for years and has closely followed the growth in the US. Chav is a proponent of playing responsibly and playing only at legal online sites. When not writing, you will find him watching and betting on sports, especially soccer, or trying to land the next big bonus on a slot.
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