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This Year’s Model

Why the restoration of Bally’s as a brand spells out a new way to build a gaming company

This Year’s Model

Virtually all casino companies now have a digital arm. Whether it’s social casinos, mobile sports betting or real-money online gaming, a casino company would have to be operating with blinders on to ignore the potential for these digital tools. But so far, these tools have just been an add-on to a land-based casino, whether the company has one or more than 100.

But the connections are tenuous at best. A truly expansive experience connecting all channels of delivery has yet to be established by any traditional gaming company. That may change now that Soo Kim has added a brand name to his vision.

Bally Blockbuster

The Bally’s brand has been around for almost 90 years, dating back to when, as Bally Manufacturing, it launched a pinball game known as Ballyhoo in 1932. The company soon began to manufacture slot machines and later got into casino operations.

But the company that represents the brand today has only been around since 2004, when a group that included Sol Kerzner and Len Wolman, two of the principals behind the original Mohegan Sun in Connecticut, paid more than $400 million for a small Rhode Island racetrack, Lincoln Park, which it renovated for an additional $200 million and renamed Twin River Casino. But the 2007-08 recession forced that group to default to a group of lenders that included Bank of America and Wells Fargo, and Twin River Worldwide Holdings was born, now majority-owned by Standard General, a New York-based hedge fund.

Kim, the managing director of Standard General, had been a director of Twin River since 2016 and was named chairman in November 2020. He had help to cement decisions made by Twin River for several years, starting with the purchase of Rhode Island’s only other casino, the Newport Grand. The license was moved to Tiverton on the Massachusetts border and a new $140 million casino hotel was built.

The birthplace of the current Bally’s Corp. can be traced to the Twin River casino in Lincoln, Rhode Island

In 2019, Twin River purchased Dover Downs Gaming & Entertainment, whose main asset was a racetrack and casino in Delaware, but the real attraction was a reverse merger where Twin River went public under the Dover Downs shell.

Kim says it was a defining moment for the company. In addition to being the vehicle for the company to go public, he talks about improved cash flow, upgraded facilities and added marketing capabilities. And the addition of former Dover Downs controlling shareholder Jeff Rollins has been a big benefit to the Bally’s board.

“When you do one good deal, it helps you do future deals,” says Kim, “because it gives you more capacity and more confidence. So actually Dover was a very important deal, even though it was a small deal, because it worked out so well in such a short period of time, that it allowed that snowball effect to keep rolling down the hill.”

In early 2020, Twin River bought three Colorado casinos from Affinity Gaming and then in April took advantage of the Caesars-Eldorado merger, picking up Bally’s Atlantic City for a mere $25 million, plus Eldorado Shreveport and Montbleu in Lake Tahoe, Nevada. In July, another Eldorado casualty was scooped up, the Isle of Capri in Kansas City.

But Kim says the true identity of the company was cemented when it bought the Bally’s brand from Caesars in November, a thought that germinated when Twin River bought the Atlantic City property.

“We asked the Caesars folks that were selling it at the time, then in the middle of the merger with Eldorado, if they were willing to sell it, they said ‘no.’ But when Eldorado ultimately closed on the purchase of Caesars, they agreed to sell it. So, we’re really thankful to Eldorado for entrusting us with what I believe is one of the iconic names in gaming.”

Practically, it saved the company the money from having to rebrand Atlantic City, but Kim says it was bigger than that. It tied into his vision for the future of the company.

“We have a plan,” he explains. “We’ve been operating with a plan to figure out what do we do in this world of online gaming. It’s massively disruptive to the industry as a whole, so how do we choose to face this disruption? We’ve chosen to face it in a positive way and embrace it, embrace the change, and not be scared of it. We needed to decide what we need to do to be relevant in an online future—an omnichannel future. We frankly wanted a unified identity because regional identity makes sense in the physical world, but online, across the nation, having one brand makes a lot more sense.”

Kim says the brand was once very important in gaming and he hopes to extend that reach, and recounts its history that extended far beyond gaming.

Bally’s started off as Bally Manufacturing, a pinball company in the 1930s, and expanded to building slot machines and later operating casinos

“It’s an iconic name that’s been around for almost 100 years,” he says. “Actually, I loved the roots as a pinball company—the Midway games. I love that entertainment, and engaging audience roots, because frankly as gambling goes online, in some ways it becomes more ever-present. You can’t hit people with gambling all the time. We want to position ourselves as the interactive entertainment brand. Bally’s started as an entertainment brand. At one point, (Bally) owned amusement parks and sports clubs and gyms. I love the history of the name.”

Even when it comes to gaming, Bally’s holds a special place, according to Kim.

“It was the center of East Coast gaming for years,” he says. “Can you get more exclusive than Boardwalk and Park Place (the Monopoly location of Bally’s AC)?”

More exclusive could be the intersection of the Las Vegas Strip and Flamingo, where the current Bally’s Las Vegas stands. When Kim reached the deal to acquire the Bally’s brand from Caesars, he gave them rights to the Bally’s name on this building as long as they wanted it. Even with Caesars previously stating that the company would sell one of its Las Vegas Strip properties following the Eldorado merger, Kim doesn’t believe that property will be Bally’s, simply because of its location.

“It’s at the heart of the action,” he says.

Right before press time, however, Bally’s announced that it is buying the operations of the Tropicana in Las Vegas from the gaming REIT Gaming and Leisure Properties Inc. (GLPI) for $150 million plus a yearly lease of $10.5 million for 50 years. In addition, Bally’s would sell the properties occupied by the Bally’s Black Hawk and Bally’s Rock Island (formerly Jumer’s) to GLPI for $150 million, with a $12 million annual lease payment for Bally’s to operate both properties. Therefore, when the deal closes in early 2022, no cash will change hands.

Kim says his company needed to be in Las Vegas.

“If we have aspirations of being a national brand, we had to have a presence on the Strip,” he explains. “Now we have a place to send our customers who want to make that annual trip to Vegas.”

He believes Bally’s got in at a reasonable price, but time was of the essence.

“The Tropicana is 36 acres at the beginning of the Strip,” he says. “It only has 600 slots and in some instances it feels like it hasn’t been touched since 1960. We truly believe that Las Vegas is going to recover quickly, and this gives us a chance to be there, invest a little money, and decide later what would be the best fit as a real attraction.”

Kim didn’t comment about whether the Tropicana would be rebranded as a Bally’s. But with Bally’s Las Vegas being the only Bally’s brand left in the Caesars’ portfolio, one has to wonder whether it would make more sense for that property to be rebranded a “Horseshoe” casino, the third powerful mark behind Caesars and Harrah’s, a valuable asset for the company. Judging by how quickly Bally’s has been making deals, and given the good relationship Bally’s has with the management team at Caesars Entertainment, Tropicana may be Bally’s by the time this article is published.

Sports Focus

The purchase of Bally’s Atlantic City from Caesars Entertainment in 2020 opened the door to buying the brand for $20 million

Following 2020’s property buys, Kim’s next step was to arrange a deal with Sinclair Broadcasting to brand the sports channels in Sinclair’s network of channels as Bally Sports. In a previous business dealing, Kim had built a broadcasting company featuring 77 television stations making $450 million a year and then sold it to Sinclair’s main competitor. So his familiarity with the company was apparent, and his interest in working with them was piqued.

“There was a lot of mutual respect,” says Kim.

In sports, Sinclair has the largest portfolio of “local rights” versus ESPN, which has the largest national rights. Kim says the local rights were more important than the national rights because sports betting is a localized action, rather than national. As a result, Bally Sports is now branded in 19 different regional sports networks (RSNs), serving some of the most densely populated regions of the nation, many of them with legal sports betting.

The Sinclair sports channels were branded as Fox Sports, and Kim convinced them to rebrand.

Then the next purchase was a technology company called Bet.Works, which he believes has superior sports betting technology compared to some of the other national brands, and he says it was proven during the Super Bowl, when several of the platforms of the national brands went down, but the Bet.Works technology stood up.

“It was our access footprint, it was our technical capacity, our branding, all coming together to work with Sinclair’s amazing footprint of rights,” he says. “If we can bring this together in the right way, it’s going to be huge.”

In April, Kim announced that Bally’s would collaborate with Sinclair to facilitate the production and broadcast of Bally’s-produced content during the current non-game windows on Sinclair’s 19 RSNs recently rebranded Bally Sports.

“We continue to seek innovative ways to allow fans to further engage with the Bally’s brand, and are confident that the engagement opportunities we will create will elevate the live viewing experience in a manner not seen before,” he says. “The gamification of live sports is the next phase of interactive gaming, and we look forward to continuing to create lean-in experiences for sports fans across the nation as our content strategy continues to expand.”

The company’s sports betting app, Bally Bet, will play a huge role in the development of the Bally’s-Sinclair content, says Kim.

Other Bally’s acquisitions include SportCaller, a B2B free-to-play (F2P) game provider for sports betting and media companies across North America, the U.K., Europe, Asia, Australia, LATAM and Africa, and Monkey Knife Fight, the fastest-growing gaming platform and third-largest daily fantasy sports (DFS) operator in North America.

These deals, says Kim, will broaden the appeal of the Bally’s experience.

To listen to the podcast or view the video with Bally’s Chairman, Soo Kim, Click Here.

“They know who their customers are, and they bring them through a journey,” he explains. “In a physical world, I think that might be less important, because it’s about who owns what and on what corner. But online, everyone is equal, so it’s important that you offer a better software, a better product, and then also to keep better control over who your customers are, and keep them loyal. So with Sinclair’s media rights, our technology access footprint, and brand, we really have the potential to put together a very differentiated product that really can not only give a customer a great experience at a physical casino, but also pull them along online, and give them products that are really important to them.”

In some ways, Kim believes a change of how viewers consume sports is already under way, and he believes that the direction he’s leading Bally’s will de-emphasize betting.

“What we’re trying to do is deliver more entertainment,” he says. “We think that watching a game should be more interactive, should be more engaging, should be more entertaining. As the audience starts to fragment, they’re disengaging from traditional media, because meanwhile there’s millions of people that watch other people play video games on the internet.

“Is it really that much more engaging to watch some video feeds, versus an actual player hitting a ball or running, something like that? I think that’s pretty clear that’s not the advantage. The advantage is it’s more interactive. Kids are watching video games, playing video games, talking to others about playing video games, talking to the people playing video games.”

iGaming Future

Four strategic acquisitions have transformed Bally’s into a technology company

Another acquisition by Bally’s recently was the purchase of the British-based iGaming company Gamesys, an early entry into the U.S. market in New Jersey. The platform has been used by the Tropicana and Virgin Games in New Jersey and other B2C companies in the U.S.

“As you know, iGaming is where the money really is,” says Kim. “And in Gamesys, we found the company that has been doing it for a long time, has built a really unique product set, and owns it. They’re very profitable. They operate in relatively mature markets. We decided we can pay mature market prices, and then bring them to the growth market, which is the U.S.

“Gamesys has very good market share in Europe, leading with bingo versus leading with sports, which gives them a really interesting, differentiated skill set. We can add our sports on top of that, and so to essentially hit both demographics, and bring all that knowledge and expertise. I’ve always told people that we want to be a tech company. And with the merger with Gamesys, we will be a tech company.”

Kim is cagey about the future for Bally’s Corp., but clearly he’s not done yet. He admits that he’s doing things differently than other casino companies have done them. Most companies hire technology partners to provide their products to generate business, but Kim wants Bally’s to own the technology so the company can control the journey of the player from the land-based casino, to viewing sports, to playing online for real money. But how’s he going to get there? Well, he’s keeping those cards close to his vest.

“I don’t want to read from the framework, because we have it and we’re still executing parts of it,” he says. “I’m happy to tell you about the parts that we’ve executed, but the parts we haven’t, not quite yet. But it’s common sense. Once you see the whiteboard, it won’t be a mystery.”

Being considered a technology and an operating company is tricky, something few have been able to accomplish. Kim outlines the challenge.

“Some of the tech is not profitable, right? So you must be careful about that,” he says. “With a company like Gamesys, it is a profitable tech company, and so we’re trying to balance the ability to fund and grow. Look, we are a gaming company, we’re a technology company, we’re a media company. We’re actually all three. And I think you can make the assumption that we’re going to continue to expand our expertise, our breadth, our offerings, on all three. On the gaming side, it’s obvious we are bidding on new projects. I’m sure we’ll participate in additional M&A activities. That stuff will continually happen.

“On the technology side, I would say that Gamesys is a very important anchor, and it helps us complete the major pillars of what we think we need to own. But there are many other interesting technologies and businesses that we believe will fit really well into an online future, and especially the engaging and entertaining online future that we’ve talked about. So we’ll continue to make acquisitions there. And stay tuned on the media side. We think the integration to media is our competitive advantage.”

With the rapid growth and development of Bally’s, competitors wouldn’t be wise to dismiss Kim’s plan. And for new entries into the business, well, now you’ve got a new blueprint for success.

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.