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As Bally’s Corporation is on the verge of going private, the company has announced it is divesting from the online gambling business in Asia. That’s the first concrete sign that big strategic changes are ahead for Bally’s.
An 8-K filing announcing the transaction stated that the company wants to focus on its European and North American operations. With the merger with Standard General pending, though, there are any number of directions it could be planning to take those operations.
One question is whether those changes will impact players on the Bally Bet and Bally Casino platforms. Given the weak performance of its online division, it’s natural to worry that it might begin winding down those operations. On the other hand, part of its rationale for going private may be to escape shareholder pressure to do so.
In our assessment, Bally’s online casino sites are likely safe for now, though we could see an exit from certain sports betting markets.
Will Bally’s reduce its US online gaming activities?
When a corporation the size of Bally’s goes private, it’s fair to assume that every aspect of the business will get a serious inspection. That’s especially likely given the fact that Bally’s announced the sale of its Asian digital assets to the public and the circumstances surrounding the merger that will take the company private.
Before the Bally’s board of governors accepted Standard General’s offer in July, major shareholders expressed their displeasure with the performance of the company’s online gambling products. One such investor, K&F Growth Capital, clearly stated that it felt Bally’s should sell its international digital assets.
Bally’s has now done that, to an extent. Another point from that April letter to shareholders from K&F was the reduction of Bally’s online gambling operations in the US.
That letter specified a guiding principle for that reduction. With Bally’s going private, though, there’s no telling whether the company will stick to that strategy.
Online gaming as marketing for physical casinos
In short, K&F wanted Bally’s to scale back its US digital gaming products to focus on pushing players to the brick-and-mortar casino properties. K&F’s reasoning was that Bally’s makes most of its revenue from physical gaming, so it should be emphasizing that segment.
Following that strategy could represent a significant downsizing of Bally’s digital operations in the country. That risk appears to be more significant for sports betting than online casino play, though.
Where might Bally’s cut back, if it does?
Currently, Bally’s operates physical casinos in 10 US states.
- Colorado
- Delaware
- Illinois
- Indiana
- Louisiana
- Mississippi
- Missouri
- Nevada
- New Jersey
- New York
- Rhode Island
The Bally Bet online sportsbook is also live in 10 states, but there are just three where Bally’s pairs a land-based casino with online sports betting. Those states are Colorado, Indiana, and New York.
The other seven current online sportsbook states are:
- Arizona
- Iowa
- Maryland
- Massachusetts
- Ohio
- Tennessee
- Virginia
Bally’s online casino is live in three states, with both New Jersey and Rhode Island also home to physical Bally’s casinos currently. At this time, Bally’s does not have a land-based casino in Pennsylvania despite the presence of its online casino platform there.
If Bally’s is to follow K&F’s recommendation, it would seem that states like Arizona, Iowa, and Massachusetts could be spots where Bally’s might cut its online sportsbook losses due to a lack of a physical presence there (with the exception of brick-and-mortar sportsbooks).
At the same time, there’s reason to remain skeptical that Bally’s will cut US digital operations as it did in Asia.
Bally’s not following the K&F playbook exactly
Though the sale of the Asian digital gaming assets follows the prescription from K&F, other decisions run contrary to that strategy. K&F characterized the Bally’s brick-and-mortar casino projects in Chicago, Las Vegas, and New York as distractions and urged the company to divest.
That doesn’t appear to be happening, as of yet, anyway. Construction is moving forward on permanent facilities in both Chicago and Las Vegas.
Thus, any expectation that Bally’s will pull its digital gaming operations out of US states it doesn’t have physical properties in or reconfigure its online casino product to be a marketing tool for those casinos is premature. There seems to be little incentive to do so, especially for the online casino markets.
Lack of logic in shuttering US online casino apps
An exit for online casino offerings for Bally’s in New Jersey, Rhode Island, or Pennsylvania would be a shock. In Rhode Island, Bally’s has a state-sanctioned monopoly and was the primary proponent of legalizing online casino play there.
The math simply might not support an exit in New Jersey. In September 2024, for example, Bally’s online casino won almost $5.4 million from New Jersey players.
It’s unclear what it cost Bally’s to win that amount, but even if Bally’s online casino in New Jersey is less profitable than Standard General wants it to be, punting on millions of dollars in win each month could be a hard pill to swallow.
An exit in Pennsylvania also seems far-fetched. Pennsylvania is arguably the most lucrative market for online casino play in the US right now and if punting on win in New Jersey is untenable, that could be even more the case in Pennsylvania.
A cost analysis might also show that making the platforms over to focus solely on pushing players to brick-and-mortar gaming isn’t a loss leader. It’s just a loss.
Online casino app as a commercial
Limited online gaming platforms that are essentially marketing tools for connected land-based casinos are not unprecedented or even rare. Such platforms have been especially present in US states where online casino play for real money remains illegal.
For the companies offering these amenities, they likely look at such platforms as a marketing expense and hope that they produce the same return as any other marketing effort. It’s all about getting people in the doors.
For Bally’s though, at least in the three existing US markets, this might be a toothpaste is already out of the tube situation. With consumers already accustomed to full suite online casino apps in New Jersey and Pennsylvania, scaling back those operations could sabotage their use as ads for physical casinos.
That doesn’t mean that Bally’s won’t necessarily take that approach in other states or that the states where Bally’s operates its online sportsbook without a brick-and-mortar casino won’t see change. Those are options on the table.
Future cost analysis reviews might spur such decisions in the course of Bally’s going private. For the moment, though, players in North America shouldn’t expect any immediate changes to their access to Bally’s online gambling platforms.
