Bally Bet could be the next sportsbook to close in the U.S.

Bally’s Corp announced in May that it was revamping its sports betting platform, partnering with Kambi in the process, starting in July as it wanted to provide a better sports betting experience. The company currently operates Bally Bet in six states including Arizona, Colorado, Indiana, Iowa, New York, Virginia and the province of Ontario and they are near the bottom of revenue in every state. In fact, in New York Bally Bet had just $338,000 in total revenue for the first year (they launched in July so it represented 6 months of revenue) but that figure barely covered the licensing fee in the state and 2023 to date isn’t much better. In comparison, Fan Duel had about $650 million in revenue in its first year, DraftKings had about $355 million, BetCaesars had around $215 million and BetMGM had over $80 million in gross gaming revenue. The other books operating in the state, including BetRivers, WynnBet, PointsBet, ResortsWorld and BallyBet, only had 5% of the handle and revenue, making one wonder what their future is also, but that’s a different article altogether.

I contacted one of the speakers at the SBC conference who was discussing the future of the U.S. interactive market, including sports betting, and asked if he had any opinion on the future of BallyBet and he said that he has no doubt Bally Bet is on the way out and is just looking for a way to escape that keeps the shareholders satisfied.

“Don’t quote me personally on this, but 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. And let’s not try to put lipstick on a pig, even in states where they have physical casinos, the sports betting revenue has been abysmal. If I recall correctly, they have just over zero percent of the market share in Indiana, despite owning a casino hotel in Evansville, and the company has done nothing in Colorado, where they own a lot of their properties. I believe in New Jersey they didn’t even launch Bally Bet despite the large Atlantic City hotel and instead used PointsBet who itself couldn’t make a go of it in the USA.

I understand the decision to put a halt to the BallyBet to fix the product, but the company executive is smart and they know the issue isn’t the product itself, but rather just being a small fish in a big pool with the sharks ready to eat them at any moment. The only companies with any notable market share at this time in U.S. markets are FanDuel, DraftKings, BetMGM, BetCaesars and Barstool Sports and the other companies are scrambling to pick up the crumbs. There is just no future for BallyBet regardless of what they do to better the platform.”

I asked the contact why he believed they are even bothering to fix the sports product then rather than just pulling out altogether as FoxBet recently announced.

“Two of the biggest assets they have are licenses in markets that have strict limitations on the number that can operate and brand recognition for their slots. If you go to any casino most of the slots are either Bally’s, IGT, Aristocrat, Scientific Games and Kambi. And in states where they will be able to offer online casinos, I assume they will do well. But they need the product to be good all around in order to flip it and I think they are working with Kambi to create a product that has good intrinsic value both in the area of sports betting and casino play that might be of interest to one of the other foreign operators that are eying the U.S. market. And, it might be of interest to the big boys who would love another skin with the Bally’s name to use for a casino/slots only product in the future.

Kambi still has connections to the Kindred Group through its sale of Unibet a decade ago and they have connections to LeoVegas, which was purchased by MGM. So, it wouldn’t surprise me if the ultimate target is a partnership with Kindred or some sort of sale to MGM who would use the Bally’s name for states where it can offer casino betting. It could also be part of a larger amalgamation that includes Unibet and MGM. Right now, online casinos are limited, but they are going to blow up in the next few years and in that space the Bally’s name could be quite valuable. It’s also feasible that Bally’s will become a B2B company that licenses its name for online casino betting but allows the other company to use whatever sports betting features they come up with as part of the purchaser’s sports betting platform.”

It appears my contact could be right. In the area of physical slot machines there is really no bigger name than Bally’s, but there are no sportsbooks called IGTBet, SGBet, AristocratBet or KambiBet because those companies realized there was really no place for them in the sports betting field other than as a B2B supplier of information and data, and their strength was the casino games and particularly slot games, which they simply license to online casino companies. I have no doubt that Bally’s has few regrets in trying to launch a sports betting product, but they must now have come to the realization that there is no place in the USA for them as a B2C sports betting company and are now exploring opportunities of how to leave and get something back for their shareholders, so it’s not a complete waste of money. And as PointsBet discovered, the licenses in some states, particularly New York, can be quite valuable to a company who may be interested in taking over the license without having to reapply on its own. But it’s uncertain what other “Fanatics-type sports books” are out there with endless resources that may be interested. One name that has arisen is Bet365, which applied for a New York license and was turned down, but sources I spoke to at Bet365 recently have told me they dodged a bullet and as long as New York wants 51% tax, it’s a losing proposition. And as for the other states where BallyBet is licensed, Bet365 already has licenses in Colorado, Iowa and Virginia. It’s doubtful Bet365 would be prepared to fork out a lot of money just for access to Arizona and Indiana. And Entain (formerly Ladbrokes-Coral) is already affiliated with BetMGM and Bwin-Party, so it’s doubtful they will have any interest in BallyBet’s licenses since BetMGM is operating everywhere.

So, if the rumors are true and if my contact is accurate, we are likely seeing the last of BallyBet as a stand-alone sports betting product in the United States and news will come in the next few months of a merger with an existing operation or sale of the product to a name like MGM. And if there is no improvement to the sports product or if they can’t find an interested partner, then, as was the case with FoxBet, the announcement will be that BallyBet simply couldn’t make a go of it in the U.S. and are just leaving the sports betting space.

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