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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, 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.
