Bally’s North America Interactive has undergone a major overhaul, and will continue to do so throughout the summer. However, the changes are not yet generating a profit.
The management indicated that the sports betting and online gambling unit would not be profitable until 2024, at the latest. This is because the group will continue to invest in the platform “prudently”, but still.
In a Q2 investor conference call, CFO Marcus Glover told investors that the unit could not make a profit until 2025.
Glover, when asked for a timeframe on when North American Interactive could become EBITDA-positive, admitted that the date was not yet set. He explained: “It’s hard to say if we’ll be there by the year’s end, or even next year.” We expect our losses to be significantly reduced by the second quarter of next year, but our focus is to continue to build this platform within our infrastructure in order to be strong in gaming on our strategic partners.”
CEO Robeson reeves stated that BallyBet will be launching in three states this summer, and seven more later in the year, using the Kambi , and White Hat platforms.
Reeves stated: “We’ve made significant progress in transitioning Bally Bet to the Kambi technology platform and White Hat, which will be rolled out this summer.” By the end of summer, we plan to have three states live and at least seven and four retail locations.
Bally’s announced its Q2 financials today. Revenues were $606.2m, an increase of 9.7% over the previous year. The record revenue from casinos was $333.2m. This is an 11% increase over the previous year.
North America Interactive generated revenues of $25.3m, thanks to the success in online casino markets in New Jersey as well as Pennsylvania. The unit made a loss in Q2, however, of $35.5m.
The management still believes the changes will be worthwhile. Reeves said that the relaunch Bally Bet would act as a funnel for catching new online casino players. He is pleased to see Bally’s invest in the sports platform in order to achieve these conversions and a strong performance in online casinos.
He said to investors: “I view sports betting as much more of a funnel. When we enter the sports market, we will invest prudently. In terms of the estimates for North America Interactive, we will be more prudent with our investments.
North America Interactive will always be cautious. I am very confident in the igaming possibilities. Pennsylvania has done well from a launch standpoint, we’ll balance that from a taxable perspective to ensure that we get good profitability.”
Bally’s said that outsourcing the sportsbook platform can reduce costs but also lead to a greater focus on data analytics to attract a better type of customer.
Reeves said that data analysis is crucial to improve the bottom line for the flailing unit.
“Our essence is how we can analyse and understand consumer leads, and integrate them into our product experience.” This is what has driven growth in the past for our interactive businesses. You can then spend more efficiently to acquire the exact right consumer, and retain them by communicating with their language and offering the optimal level of rewards.
Bally’s was the only operator of the online casino Rhode Island that will launch next year. The passage the bill gives Bally’s a monopoly on the market starting next year.
Investors were worried that online casinos could affect the Twin Rivers Casinos in the state. However, management shrugged off this concern.
“We’ve seen it everywhere we’ve launched, igaming is right alongside casinos and resorts. It’s a completely different way to engage. Spending has been layered on top of each other. It protects us at different times. It’s not cannibalizing, but it is additive. Retail stores are a place where people can socialize and engage at home.
“We are the only operator and therefore we view this as a totally incremental project. Rhode Island is a place I am very excited to visit. “I think it’ll be a big factor in driving North America Interactive and igaming business.”