Bally’s Corporation released its Q3 2023 financial results detailing record revenue and then announced it expects to lay off around 300 people from its North American Bally’s Interactive division. The division comprises the company’s sportsbook, Bally Bet, and Bally Casino.
The layoffs aren’t happening because of underperformance. Bally’s (Bally’s Corporation 11,52 +0,88%) posted record revenues and growth among all divisions, including Bally’s Interactive in North America. CEO Robeson Reeves expressed confidence the division will continue to grow in 2024 while achieving better financial results by implementing strategic cost cuts.
Bally’s Q3 2023 Financial Highlights
The quarter saw a record company-wide revenue of $632.5 million, an increase of 9.4% year-over-year (YoY). Three divisions accounted for that revenue:
- Casinos and Resorts — $359 million, up 9.3% YoY
- International Interactive — $243.9 million, up 7.2% YoY
- North America Interactive — $29.6, up by 33.6%
However, while revenue reached record levels, Bally’s recorded a $61.8 million loss during the quarter, compared to a $593,000 profit a year ago. The losses were primarily due to increased costs, which accounted for $595.2 million, up 13.5% YoY. Some of those costs include the delayed launch of Bally’s temporary casino in downtown Chicago, which opened on Sept. 9. Bally’s had planned to open the casino in the summer.
But even with the Q3 losses, the company’s net income for the year is still positive — $90.9 million. Meanwhile, revenue for the first nine months is $1.84 billion. But while revenue grew to record levels, Bally’s changed its guidance for 2023 to a range of $2.4 billion to $2.5 billion. That’s down from the previous $2.5 billion to $2.6 billion forecast.
CEO Expresses Confidence in NA Interactive
While it’s the smallest division, North America Interactive, achieved the highest increase in revenue. Most of that revenue came from iGaming. Because the company’s sportsbook temporarily shut down to switch to a new software platform.
During Bally’s Q3 earnings call, Reeves expressed confidence that the company has the experience to gain market share in mature markets. He added that Bally Casino is on track to achieve the goal of 6% to 8% market share in New Jersey. Furthermore, Reeves said early results from Bally Casino in Pennsylvania are encouraging. Meanwhile, at the end of the quarter, the division received a boost as Bally Bet relaunched in four states and five retail locations. Reeves expects the sportsbook to be live in seven states by the end of the year.
For 2024, the CEO expects to launch Bally Casino in Rhode Island, Bally Bet in additional states, and continued growth and profitability for North America Interactive. Additionally, he announced that after the successful Bally Bet relaunch, the company will move Bally Casino to the new platform by White Hat and Kambi.
Reeves expressed confidence in White Hat and Kambi and said their platform is the better product for the company in the long-term. Both believe the move will benefit users and will create a better experience for them. While no states were mentioned, moving both the sportsbook and casino to the same platform could mean we finally see Bally’s first multi-vertical state.
Are Layoffs Going To Be From GameSys?
Bally’s CFO Marcus Glover added that switching Bally’s online casino to the same platform as its sportsbook is part of the focus on cost-cutting. As a result of those efforts, Bally’s announced a “headcount reduction” of approximately 300 people. While not specified, these layoffs will likely come from GameSys. The subsidiary is the current platform provider for Bally Casino and Virgin Casino in New Jersey.
Bally’s bought GameSys in 2021 for $2.7 billion and used its platform to launch its online casino in New Jersey. After the deal, GameSys’ CEO Lee Fenton took over as Bally’s CEO. Reeves replaced Fenton in Q1 2023. Some of the first major decisions by Reeves were to to change Bally Bet’s platform from Bet.Works and to shift the company’s focus on iGaming.
Moving on from GameSys’ platform could also be part of Bally’s international plans. In September, GameSys introduced Bally Casino in the UK, replacing Megaways Casino. That made Bally’s the second US operator in recent history to launch overseas after BetMGM. Reeves said that a UK launch of Bally Bet and growing the online casino are part of 2024 goals. GameSys’ UK background could mean the company shifts focus to international markets.
Whether at GameSys or not, the upcoming layoffs will be the latest personnel reduction for North America Interactive. In January, Bally’s announced its plan to lay off 15% of the division’s employees. The company stated it over-hired during the pandemic. There are also speculations that Bally’s might lay off Nevada employees. Earlier this year, the company struck a deal with the Oakland A’s to build a ballpark at the site of the Tropicana Las Vegas.