Let the rampant and wild speculation about the ramifications of Bally’s going private begin.
On Thursday, July 25, the Bally’s Corp. announced it has agreed to terms from Standard General, L.P. that represent a merger. The clear, immediate effect is that Standard General will substantially expand its holdings in the gambling industry in the United States if shareholders approve of the transaction.
What it means for Bally’s online casino product in New Jersey, Pennsylvania and Rhode Island is a matter of absolute speculation.
Details of the Bally’s-Standard General merger
According to a release from Bally’s, the company will present shareholders with the offer from Standard General, asking them to ratify the merger. The net effect is that Bally’s will be part of a new, privately held company.
Should they approve of the offer, shareholders face a choice. They could either accept a cash buyout of $18.25 per share or they can have their shares preserved in the new company.
Bally’s says the cash offer represents “a 71% premium to the company’s 30-day volume weighted average price prior to the initial Standard General proposal.” The March 2024 offer from Standard General was $15 per share.
As part of the transaction, Standard General would also combine its existing gaming-industry holdings, The Queen Casino & Entertainment, Inc., with Bally’s operations. The Queen operates four brick-and-mortar casinos, three of which bear the company’s branding.
As a result, the new company would operate, own, or both in terms of 19 gaming facilities across 11 states in addition to online gambling products in 10 states. At present, that’s about all that is certain about this development.
Merger presents a multitude of questions
Right now, there are far more questions than answers as to what this means for the physical gaming properties and Bally’s online casinos. To begin, it’s unclear how many of the people in positions of leadership with Bally’s will stay in such roles.
A likely “holdover” will be Soo Kim, the chair of Bally’s board of directors. Kim is also the managing partner of Standard General, which probably signals that he isn’t going anywhere unless he has his designs on a departure.
Another question pertains to how the merger might affect Bally’s relationship with Chicago. Bally’s had just announced that it had secured financing to fulfill its commitment to develop a new casino in the city. It’s unclear currently how the contract language between the parties will treat this merger.
Another substantial question is how this will affect Bally’s interest in a potential license to operate a physical casino in New York. In February, Bally’s confirmed that it was scouting out potential locations within New York City and interested in submitting a bid.
For the online gambling products, there is uncertainty as well. Shareholder dissatisfaction with the return on Bally’s online gambling offerings was apparent earlier this year.
How this merger could steer the future of Bally’s digital products is total speculation right now. For the moment, all that is certain is that all the challenges and opportunities that Bally’s faced now belong to the new company.