Bally’s to sell Asia-facing online arm to division’s management team
Rhode Island-based firm to part ways with business segment in a bid to devote further attention to its North American and European operations
Bally’s has agreed to sell its Asia-facing online gaming business in an undisclosed deal to the division’s current management team.
As part of the deal, Bally’s will part ways with certain intellectual property, which has been placed in trust and licensed to the buyer for an initial term of five years, in exchange for licence fees and royalties.
Bally’s will also provide the acquiring team with certain transition services as part of the transaction.
Beyond that, Bally’s will play no part in the management or operations side of the offloaded asset, which alongside Asia also includes “certain other international markets”.
The operator said the Asia management team will acquire the carved-out business in “exchange for a note”. No other financial details were provided.
Bally’s boasts a significant presence within the Asian market, particularly in Japan where it operates four brands in the form of CasinoSecret, Vera & John, InterCasino and Yuugado.
Vera & John is a market leader within the Asian online casino space.
The company did highlight this decision has been taken largely to allow Bally’s to dedicate more resources and attention to its operations in both North America and Europe.
The news was revealed via a Form 8-K filing released on Friday, 1 November, in which Bally’s outlined that the “financial impact of the transaction is not expected to be material to adjusted EBITDA or free cash flow of the company”.
However, Bally’s did note that by offloading its Asian interactive arm it will see a “modest decline” in adjusted EBITDA and free cash flow, but any decline will be offset by the cost-cutting impact of the operator’s organisational structure being simplified.
The news comes just three months after Bally’s Q2 results revealed a notable decline in International Interactive revenue, largely attributed to the difficulties Bally’s has faced in Asia.
Of the $229.4m (£176.8m) revenue amassed in that division, just 21% of it was contributed by the operator’s Asia-facing segment. The majority of Bally’s Asian revenue comes from its Japanese operations.
Speaking in the aftermath of the results release in August, Bally’s CEO Robeson Reeves issued a defiant response to the disappointing display in Asia.
He said: “Outside the UK, our business in Asia was challenged in the quarter as we continue to work through several logistical and operational hurdles which directly impacted players.
“We believe the Asian Interactive market remains an attractive opportunity and we will continue to work to manage and grow our position in this important region.”
Those same results documented how Bally’s standout segments remain the UK, which saw a 9% rise in revenue and contributed to 74% of the firm’s topline figure.
Bally’s is set to release its Q3 earnings report on Wednesday, 6 November.
The sale of the Asia-facing assets also comes with Bally’s set to be taken private by Standard General in a deal that values the Rhode Island-based firm at $18.25 a share.