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Using words like “complement” and “connection,” Bally’s Board Chairman Soohyung Kim told Online Poker Report the future of online gambling is working together with land-based casinos, not against them. He said the company’s merger with Gamesys “positions Bally’s to be a market leader.”
Elaborating on what he believes the April Bally’s merger with UK-based online gaming operator Gamesys will allow Bally’s to do with online gambling and sports betting, Kim said:
“This merger will prepare Bally’s to provide the next gen experience to jurisdictions across the US. The combination of the online and physical casino options will allow Bally’s to provide a user experience unlike anything else in the market right now.”
Kim, who usually goes by the nickname “Soo,” is also the managing partner and chief investment officer of Standard General. That New York-based investment firm is the largest shareholder in Bally’s casinos.
Bally’s owns 12 retail casinos and debuted its Bally Bet online sportsbook in Colorado on May 24. Now, the company is poised to expand its empire to three new states, bringing the total to 15 land-based casinos across 11 states. Bally Casino will also make its debut in New Jersey soon.
For a variety of reasons, states have been slower to legalize online casino gambling than sports betting. One of those reasons is the worry that online casinos might hurt land-based casino revenue. To what extent this actually occurs is a matter of debate.
One recent example of casino revenue cannibalization concerns came from Illinois Rep. Robert Rita. He voiced those exact thoughts on Apr. 28, during a committee meeting about the pending Internet Gaming Act. That bill failed to make it out of the House before the Illinois General Assembly adjourned its regular session this week. Lawmakers did, however, manage to push through some last-minute changes to the state’s sports betting law.
Since then, a Deutsche Bank analyst has found what he believed to be signs of gambling revenue cannibalization. In an article published on May 27, Legal Sports Report cited the analyst’s finding that New Jersey and Pennsylvania‘s retail casino revenue had not bounced back as quickly from coronavirus-related shutdowns as that of states without legal online gambling.
However, iGaming advocates like Kim have long pointed at the early years of online casinos in New Jersey and other jurisdictions as evidence that online gambling options won’t siphon off retail casino revenue. Such arguments were also brought up at the Illinois hearing.
Kim goes a step farther, saying US online gambling will only help land-based casinos – especially those run by Bally’s.
“The future of Bally’s is extremely bright. We believe in the value of physical experiences, and will continue to serve the tens of millions of customers in that space. We ultimately envision the online experience being an additional benefit and complement to this already exceptional experience. The future of land-based casinos will go hand in hand with online gaming. Bally’s will strive to continue to be a leader in both.”
Bally’s also announced Q1 2021 results on May 10 that showed its income from operations representing its strongest quarter since Q2 2019. The earnings report obviously didn’t include Bally Bet, as it hadn’t launched yet. Even so, Q1 2021 revenue was up 76.2% to $192.3 million from $109.1 million in Q1 2020.
So far, what Bally’s has said it will offer with Bally Bet isn’t unique. Perhaps the most interesting feature mentioned in its press release was the integrated social features for online betting. However, DraftKings Sportsbook has just rolled out its social features, and WynnBet Sportsbook is racing to add similar ones.
Kim acknowledges there will be similarities between Bally Bet’s offerings and those of its competitors. He said he respects what the bigger companies are doing and that Bally Bet won’t be focusing “too much on the market positioning conversation.”
“While there is overlap, and we have the ability to compete in the same space as mobile sportsbooks, our ultimate focus is not gaining market share there. We’re striving to offer a more seamless connection between sports and media through partnerships we’ve formed with heavy-hitters, like Sinclair.”
There, too, there is overlap. Nevertheless, Kim is correct that there’s opportunity. For instance, despite FanDuel having a huge content marketing and distribution capability with Fox Sports, their parent corporations Flutter and Fox are in a tussle that may eventually jeopardize that relationship. Plus, many of the operators with less market share than those Big Three online gambling operators have content partnerships with smaller entities than Sinclair Broadcast Group.
In the April 12 announcement about the casino chain’s collaboration with Sinclair, Bally’s planned for Bally Sports to provide “Bally’s-produced content during the current non-game windows on Sinclair’s 19 regional sports networks.”
Kim and Bally’s, as an organization, both have high hopes for Bally Bet. Even so, they acknowledge the app isn’t yet where it needs to be.
The May 24 Bally Bet app announcement said:
“The beta launch, which will be accompanied by limited marketing, will focus on the deployment, testing and refinement of the Bally Bet app and its content. Bally’s intends to incorporate enhancements to the Bally Bet app over the coming weeks.”
Taking a closer look at the announcement, it shows Bally’s made the unusual choice of deploying in Colorado vs. New Jersey for the beta testing. That choice hints at those hopes for the future. Bally’s owns three casinos in the Centennial State and, as Kim said, the app will complement the physical casino operations of Bally’s Golden Gates, Golden Gulch and Mardi Gras casinos in Black Hawk, Colo.
New Jersey is actually in a subsequent launch, the Bally’s site showed. That state is among the sportsbooks slated to arrive in three more markets in 2021, with more debuting in 2022. In addition to New Jersey, the site lists the following states as having a Bally Bet sportsbook “coming soon”: Illinois, Indiana, Iowa, Nevada, Pennsylvania and Virginia.
Kim told OPR:
“As restrictions begin to ease, we think Bally’s land-based casinos will continue to thrive, and anticipate a record year from now through end of year. With continued reopenings, online gaming might slow a bit, but we anticipate being able to really showcase our business model to the public and differentiate ourselves from competitors. Ultimately, we’re offering an omnichannel experience. We’ll still have the online options and marry that with the in-person experience. We’re very excited about it.”
What Kim talked about was an integration of mobile and land-based experiences. One way app developers outside the gambling industry integrate the two is through QR codes. For instance, restaurants used QR codes at outdoor tables as a way of providing diners with contact-free menus while pandemic restrictions were in effect.
However, integrating apps with physical spaces can jumpstart other user experiences, too. A more ambitious goal would be virtual or augmented reality.
BetMGM talked about augmented reality (AR) in casinos working this way:
“Imagine pulling out your phone in front of your favorite slot and seeing when the last time it paid out on its progressive jackpot, or doing the same for roulette and seeing where the ball landed on the last five spins. AR could also allow you to view digital promotions, bonus offers, or even games and characters that you couldn’t see or interact with without an AR-enabled device.”
Virtual reality is another option, but is far more complicated and costly. While some examples exist – in a non-gambling form on the Las Vegas Strip and in rather ’90s-looking online gambling offerings – these mobile integrations may not be commonplace for awhile.
Indeed, Kim told OPR that VR isn’t something he would bring up in describing Bally Bet’s plans.
“Over time, we are looking to create a seamlessly integrated experience on- and off-property.”
As of now, clicking on one of the Bally’s online sportsbook links on the site brings visitors to a page for Bally Interactive, which consists of Bally Bet, Bet.Works, Monkey Knife Fight and SportCaller.
There, a visitor learns that the app will combine “deep media integration” that looks like the content discussed earlier. That is, it will combine free-to-play games, sports betting, daily fantasy sports and online casino gambling.
Plus the Bally Bet announcement mentioned that eventually, the app will let customers earn Bally Rewards points – once the loyalty program debuts this summer. The points Bally Bet bettors earn wagering on sports will qualify them for rewards including “gaming, dining, retail and other amenities” at Bally’s casinos nationwide.
Kim said he anticipates online casino gambling will slow down momentarily as pandemic restrictions ease. In the long run, though, he says it will continue to grow overall. He thinks “iCasinos will ultimately become a well-accepted and popular form of entertainment and a revenue generator for states that allow them.”
As for Bally’s, he said:
“While Bally’s land-based casinos have physical card rooms, we don’t currently have an online product. One of the many reasons we’re excited about the partnership with Gamesys is so that we’re able to offer that online option too. The balance between the physical and online experiences is what we’re striving to continue to develop and ultimately perfect. We’re excited for what comes next, we have a lot of innovative projects in the works.”