Bally’s Sell Asian Division to Focus on Europe and America
Bally’s is divesting its digital gaming operations in Asia in order to increase its focus on other strategic markets.
Bally's sing. Bally’s agrees to sell Asian interactive business.
LISTEN TO THIS ARTICLE:A recent Form 8-K filing with the US Securities and Exchange Commission revealed the company’s intentions and clarified that the sale is projected to have a “neutral” effect on Bally’s EBITDA (earnings before interest, taxes, depreciation, and amortization).
The sale transfers the Asian gaming unit, known as the Carved-Out-Business, to members of its existing management, who have expressed interest in acquiring and expanding it. While financial specifics of the transaction have not been published, Bally’s doesn’t expect the sale to have a material impact on adjusted EBITDA or free cash flow in the short term. Instead, it expects that future operational efficiencies will compensate for any initial performance dips.
Related: Bally's Has Ambitious Casino Plans on Former Tropicana Site in Vegas
Bally’s to Generate Income from Licensing
Bally’s has said that it plans to continue generating income from the divestiture through licensing and royalty agreements with the buyers.
Going forward, the financial statements of the Company will only reflect licensing and royalty revenues received from the Buyer, which are expected to be lower than revenues under the current accounting treatment, but the profitability margins associated with those licensing revenues are expected to be higher as is customary in the gaming industry for IP license business models.
However, Bally’s is not retreating from the digital gaming sector entirely. Instead, the company is planning to reallocate resources toward North America and Europe, where despite increasing competition, there is a larger potential for profit.
The decision to exit Asia may appear sudden, especially given CEO Robeson Reeves’ comments following the company’s second-quarter update when he acknowledged that there were challenges in Asia but remained optimistic about local growth opportunities.
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Redirecting Resources to Core Markets
With the Asian digital division no longer a concern, Bally’s now plans to channel more resources into the UK, its leading market in terms of digital performance. Details surrounding the sale’s initiation remain unclear; it is not known whether Bally’s had actively sought a buyer or simply responded when interest emerged.
The company is also known to be working on a new property in Las Vegas, which it hopes to open at the same time as the new Oakland Athletics stadium, which is due to be complete in the spring of 2028.
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