Soo Kim, a hedge fund manager known for investing in distressed assets, is making significant moves in the European gambling sector through his leadership at Bally's Corporation. Born in South Korea and raised in Queens, Kim has built a reputation for turning around faltering companies via his investment firm, Standard General, which focuses on underperforming assets that others shy away from. Critics label him as opportunistic, while supporters recognize his disciplined approach.
His latest ambition is the formation of a transatlantic gambling conglomerate, significantly visible in the UK market. Bally's Intralot is eyeing the acquisition of Evoke plc, which owns William Hill, 888, and Mr Green, potentially creating one of the largest online gambling entities in Britain. However, industry sources indicate that Evoke might not be the sole target; Bally’s Intralot is reportedly also considering a bid for LiveScore Group, which operates LiveScore Bet and Virgin Bet.
This dual pursuit raises questions about the rationale behind targeting another UK betting brand while attempting to integrate William Hill and 888. One interpretation is that Kim's strategy for the continent is far-reaching and involves accumulating various assets.
Kim’s approach deviates from traditional business-building methods; instead of creating a brand from scratch, he acquires existing pieces. Under his guidance, Bally's has grown into a diverse gaming conglomerate, including nearly 20 casinos, an online gaming platform called Bally’s Interactive, and various casino projects under development in major U.S. cities like Chicago and Las Vegas.
During a recent interview with GGB Magazine, Kim expressed his lofty aspirations for Bally's: “We believe in gaming in all its forms, and maybe our ambition is to become the first truly global gaming company.”
Britain’s gambling market is particularly appealing due to its scale, liquidity, mature regulations, and operational proficiency. While some view the UK as burdened by excessive taxes and regulations, Kim sees an opportunity for consolidation and growth. Kim commented at this year’s ICE conference that stricter laws might inadvertently reduce competition, as smaller operators struggle to remain viable.
Chad Beynon of Macquarie Capital notes a similar trend in the UK, observing that larger companies are reaping rewards from diversified branding strategies. He points out that Bally's ongoing focus on Britain underscores the potential for greater resilience and strategic advantages in this market. “The UK business has been quite resilient, and management’s attention highlights potential synergies,” Beynon remarks.
The changing fiscal landscape in Britain further favors larger companies like Bally's. Beynon explains that the company’s high debt levels, combined with its ambitions for growth, have not prevented effective financial maneuvering in terms of capital acquisition. Kim’s flexibility in capital strategy includes sale-leaseback deals and the recent Intralot transaction.
Skepticism about Bally's financial strategy persists, with some asserting that the company is acquiring disparate assets without a clear direction. Brendan Bussmann of B Global critiques the lack of a coherent strategy, suggesting that the company is becoming a collection of ventures rather than a singular, aligned operation. He cautions that Kim may be pushing boundaries too far and too fast amid high debt levels and underperforming projects.
While some express doubts about Kim’s vision for Bally's, others see potential coherence in his plans. The acquisition of Evoke, along with possible plans for LiveScore, could position Bally's as a major player in the UK online gambling scene while simultaneously leveraging a valuable media asset. In this scenario, Bally's could reduce customer acquisition costs significantly through its proprietary platform.
The road ahead remains fraught with challenges as Bally's juggles ambitious projects across various sectors while navigating stringent regulations. Despite the risks, Kim's ongoing investment in the European market may signal that Bally's ambitions are just beginning.
