Bally’s Continues Expansion

Rhode Island-based Bally’s Corp. has agreed to buy U.K.-based iGaming company Gamesys. It’s the latest in a flurry of mergers and acquisitions for the company, which recently bought DFS supplier Monkey Knife Fight.

Bally’s Corp. is continuing its rapid expansion into new markets, announcing an agreement in principle to acquire U.K.-based online gaming platform supplier Gamesys Group PLC.

It’s the latest in a flurry of moves made by the former Twin Rivers Worldwide Holdings since it went public through a reverse acquisition by Dover Downs Gaming & Entertainment in 2018. All of it increases the operator’s footprint in both the land-based and online gaming markets. And none is more significant than the Rhode Island-based operator’s acquisition last October of the Bally’s casinos from Caesars Entertainment, after which the company was renamed Bally’s Corp.

The Gamesys deal is valued at around $2.75 billion. Bally’s will pay 1,850 pence (US$25.48) per share in cash for the company, the company said in a press release. That’s a 13 percent premium from Gamesys’ closing price the day before last week’s announcement. The company’s also offering an alternative payment of 0.343 Bally’s shares for every share of Gamesys, or about 1,655 pence apiece.

Gamesys shares jumped 18.76 percent to 1,950 pence in London trading at 13:10 p.m. on the day of the announcement. Bally’s closed at $66.34 in New York the day before the announcement.

Gamesys develops online games focusing on casino and bingo. Its shares have soared over the past year, alongside rival operators, as online gambling firms have benefited from the Covid-19 shutdown of land-based casinos.

“We believe that this combination would mark a transformational step in our journey to become a leading integrated, omni-channel gaming company with a B-2-B-2-C business,” Bally’s Chairman Soo Kim said in the press release. “We think that Gamesys’ proven technology platform alongside its highly respected and experienced management team, combined with the U.S. market access that Bally’s provides, should allow the combined group to capitalize on the significant growth opportunities in the U.S. sports betting and online markets.

“We are truly excited about the opportunities that this combination would offer and the enhanced and comprehensive experience and product offering that it would enable us to offer our customers.”

The combined group would be headquartered in Rhode Island and its shares would retain their listing on the New York Stock Exchange, where Bally’s trades under BALY.

“From our first meeting to now it has been the entrepreneurial energy of the two businesses that has brought us to the edge of creating a uniquely powerful company,” Gamesys CEO Lee Fenton said in the release. “Our shared passion and vision to capitalize on technology disruption to better serve our customers, wherever they may be, should make for an exciting journey for our employees, customers and shareholders alike.”

Fenton would become the CEO of the combined group after the merger, and two Gamesys directors would join Bally’s board. George Papanier, president and CEO of Bally’s, would stay on the board after the merger and oversee Bally’s land-based casinos.

The Gamesys announcement constitutes only one of many irons Bally’s currently has on the fire. Last week, the company announced that it has completed the previously announced acquisition of Monkey Knife Fight (MKF), the award-winning gaming platform and third-largest daily fantasy sports (DFS) operator in North America.

The acquisition makes Bally’s only the third sports betting company in the U.S. to have a fantasy sports segment, and advances the company’s long-term growth and diversification strategy to become the first truly vertically integrated sports betting and iGaming company in the U.S. with a B2B2C business model.

“We are pleased to have closed on our acquisition of Monkey Knife Fight,” said Papanier, “and are now focused on integrating this unique asset into our Bally’s Interactive division. Entering the daily fantasy sports market is an integral component of our omnichannel approach and an important milestone for our company as we continue our long-term diversification strategy.

“We look forward to providing sports fans across the nation with a dynamic and engaging DFS platform that is commensurate with the premier offerings that define the Bally’s portfolio.”

Monkey Knife Fight’s distinctive, user-friendly platform has approximately 200,000 registered users and 90,000 depositing players, which will contribute to Bally’s growing player database and provide the company with a significant advantage in launching its own B2C sports betting operations. In addition, the acquisition allows Bally’s to combine MKF’s expansive geographic presence.

Also last week, the company picked up a major partnership connected to its sports betting operation when Major League Baseball announced that Bally’s will be an authorized gaming operator. The deal gives Bally’s access to official league and team marks, logos and data, which it intends to use across its sports betting products, according to a news release. Bally’s also will include these in content that will be integrated into live MLB game coverage by its 19 regional sports networks that account for more than half of the U.S. MLB teams.

Bally’s has also announced partnership deals with the NBA and NHL since mid-February. Bally’s online sports betting and iGaming offerings are powered by Bet.Works. Last November, Bally’s Corp. bought the sports-betting platform and acquired naming rights to the 19 regional sports networks of Sinclair Broadcast Group.

The casino operator said there’s no guarantee that a firm intention to bid will be made for Gamesys, and any offer will be subject to shareholder and regulatory approval. Gamesys founders Noel Hayden, Andrew Dixon and Robin Tombs and shareholder HG Vora have indicated that they’ll support the deal, Bally’s said in the statement.

Meanwhile, Bally’s continues an effort to expand its land-based footprint. Last week, the company announced that it has been selected as one of three finalists for the new casino license in Richmond, Virginia. The $650 million Bally’s Richmond Casino Resort is the largest proposal for Richmond, and would come with the largest proposed upfront payment to the city, $100 million.

“We are excited and honored to have been selected as a finalist and have the continued opportunity to partner with the city of Richmond, its residents and businesses on this campaign,” Papanier said. “The Bally’s Richmond is truly a Richmond-first project, dedicated to supporting local businesses and minority organizations by driving job creation and developing sustained economic opportunities.

“We are confident that our proposal will provide incomparable economic benefits to the greater Richmond community, and we look forward to continuing our dialogue to prove to the city and its various stakeholders that Bally’s is for RVA.”

Bally’s Richmond would be strategically situated on a 61-acre parcel located at the intersection of the Powhite and Chippenham Parkways. Bally’s is currently working with its civil and traffic engineers, who have been conducting various surveys and assessments, to ensure multiple access routes into and out of the property that are not only convenient for patrons, but also efficiently direct traffic away from local major roadways.

Bally’s is also committed to preserving and enhancing the natural beauty of the site, including the natural, wooded surrounding and wetlands, which it intends to seamlessly integrate into its overall design.

The Bally’s proposal has the support of multiple leaders of the greater Richmond community.

Currently, Bally’s owns and manages 11 casinos across seven states, a horse racetrack and 13 authorized OTB licenses in Colorado. After pending acquisitions are final—Tropicana Evansville (Evansville, Indiana), Jumer’s Casino & Hotel (Rock Island, Illinois), and MontBleu Resort Casino & Spa (Lake Tahoe, Nevada), as well as construction of a casino near State College, Pennsylvania—Bally’s will own and manage 15 casinos across 11 states.

In its fourth-quarter earnings announcement earlier this month, Bally’s reported net income of $20.2 million in the quarter. Net income in the 2019 fourth quarter was $13.4 million.