Bally’s CEO affirms interactive focus despite $19m Q1 EBITDA loss
Lee Fenton suggests online division was in “ramp-up mode” as Bally Bet 2.0 debuts in Arizona
Bally’s CEO Lee Fenton has defended the financial performance of its igaming and online sportsbook division after the operator posted a $19m adjusted EBITDA loss.
Speaking as part of the firm’s Q1 2022 earnings call, Fenton affirmed his confidence in the “high-growth” opportunity of investment in the US market, suggesting the interactive division’s loss was due to a “ramp-up” in its plans.
These plans include a scaling up of the Bally’s igaming offering in New Jersey ahead of the winding down of Bally’s B2B operations in partnership with Tropicana under the Virgin online casino brand with the aim of accelerating its B2C business.
Elaborating on this, the CEO suggested there would be a full launch calendar in interactive’s future, with the business making “good progress” against company objectives.
“Our new bespoke front end combined with the Gamesys PAM and data analytics is a big step forward for the business. Throughout the year, we will launch sports integrations with our Sinclair partnership and multiple iterations to our sportsbook products,” said Fenton.
Aside from its igaming ambitions, Bally’s is pinning its US hopes on the new improved Bally Bet product, which is slowly being rolled out across multiple markets following a significant development and testing phase.
“We launched in Arizona yesterday with our foundational 2.0 product, and New York will follow later this quarter. This is a significant milestone for us and represents a huge effort by the team and I’m proud of all the work that’s been done to bring our technology stacks together.
“Arizona is a key market for us with our groundbreaking WNBA partnership, marketing spend with the Diamondbacks and our media partnership with Sinclair. In New York we will be cautious and keep a keen eye on marketing spend and how to navigate a high-tax environment in sports betting. We are on track to launch in Ontario in the summer.
“In the second half [of the year], we will focus on states where there are icasino opportunities or where we expect [there] to be icasino opportunities in the near-term,” he added.
Bally’s North America interactive division posted Q1 2022 revenue of just $15m, with a net loss of $25.3m and an adjusted EBITDA loss of $19m.
In contrast, the international digital division, inclusive of the UK and Asia businesses, had a stellar Q1, generating revenue of $253m, net income of $28.8m and a positive adjusted EBITDA of $73.3m.
Despite the US loss, Lee Fenton reiterated Bally’s expectation of a $60m EBITDA loss in full year 2022 rather than upping its loss estimates based on the poorer-than-expected results.
“We had a heavy lift in Q1, we built the foundational 2.0 and we’re now reallocating some of the resources that helped us to do that back to international interactive now we’re out the door,” Fenton explained.
“Combine that with a growing igaming business and more efficiencies on the B2B side of the business, that makes us more optimistic to hold to the guidance, there’s always the chance that we could decide to put our foot to the floor and the roll out plan, but we have haven’t made that call now. We’re sticking with where we were.”