Bally’s to delay New York launch to April amid marketing spend concerns

Bally’s chairman Soo Kim has revealed the US casino and BallyBet operator will not launch in New York State until at least April in order to avoid the Empire State’s high initial promotional spend.

New York has enjoyed a hugely lucrative sports betting debut, with the state’s four initially licensed operators generating $48.2m in revenue and taking more than $600m in bets in just the first nine days of operation.

The launch has been the subject of a furious market share grab by operators, who have offered bettors increasingly large amounts in respect of promotional incentives and sign-up bonuses.

In an interview with broadcaster CNBC, Kim suggested the high promotional spend was contrary to market expectations of the New York launch and the strategies of operators licensed there.

“I think people thought, well, maybe things will be a little more relaxed, a little more reasonable about promotion and advertising in New York because of the fact that there are fewer operators and it also has a 51% tax rate, which is the highest in the country,” Kim said.

“I don’t want to cast aspersions on other operators, but you could open an account with one operator, open an account with another, get your free promotional money and bet separately, but different ways on the same game and you’ll win on one of them, I don’t know why everyone’s not doing that,” the Bally’s chairman added.

BallyBet is one of three operators not having launched in New York State, along with WynnBet and Resorts World Digital, who have all not received clearance to do so from the New York State Gaming Commission (NYGSC).

Kim, for his part, suggested Bally’s was in no rush to commence operations in the Empire State. “We will launch sometime in April, and we’re okay with that, we have a longer-term plan,” he explained.

“I think this is why maybe our plan isn’t being fully grasped by the public trading markets, these markets tend to be very short-term oriented. We think that actually the current version of sports betting is not a great business, it’s a fine business but not a great business.

“We think that there’ll be a wave of consolidation, that will rationalise promotions, but more importantly, I think what operators will do is stop competing with just free money, instead pivoting to competing with product,” Kim continued.

“I’m a little concerned that all the operators are spending just too much money, just being too promotional. That’s going to create a bloodbath of earnings and then it’ll only be a little time before the consolidation occurs and some of the weaker hands can be taken out.

“The industry is getting hit by both of those trends, and we as a hybrid company that has both casino and online gaming are being affected by both of those trends,” he added.

Kim was speaking on the day that his Standard General fund, which owns 21% of Bally’s launched proposals to acquire all remaining outstanding stock in the firm at a price of $38.00 per share, a move which would take the company into private ownership.

The proposal represents a significant reduction on the $66.00 per share paid as part of Bally’s merger with the Gamesys Group in October 2021, with many questioning the rationale and incentive for investors to sell their stock, including Gamesys founder Noel Haydon, who owns a 10% shareholding.

In the wake of the proposal, Bally’s shares jumped 23% in 24 hours trading on the New York Stock Exchange. Addressing this speculation, Kim said: “This is something that’s going to come out as part of the special committee deliberations.

“Most likely we’ll have an option for investors to remain with us, as we take the company forward. I’m very much a fan of fairness, I’m doing this because I think it’s the right thing to do, it’s a great opportunity and I think the markets are wrong.

“If other shareholders want to join us, who am I to say that’s not right,” Kim added.