CEO Lee Fenton tried to put a brave face on the results by explaining that the company was still in the process of identifying non-performing and loss-making assets that were part of its wave of acquisitions over the past two years.
Bally Company today published its results for the third quarter of 2022reporting negligible third-quarter profits of $593,000 compared to $61 million in the same period last year.
The entertainment giant, owner of the legal sports betting operator Bally bethowever, reported total quarterly revenue of $578 million, a significant year-over-year increase of 83.7% from last year’s third quarter revenue of 314 .8 million.
Third-quarter revenue was also a marginal 4.7% increase from the $552.5 million in the prior quarter, while earnings per share of $0.01 barely pushed Bally’s in. positive territory, although this is well below street expectations of 30 cent EPS.
Casinos and resorts reported EBITDA of $119 million, which includes a positive EBITDA of $9.5 million for Atlantic City. Excluding Atlantic City, the EBITDA margin was 39.5%, which was in line with Bally’s guidance in the top 30.
Bally’s Corp CEO Lee Fenton tried to put a brave face on the results by explaining that the company is still identifying non-performing and loss-making assets that were part of its wave of acquisitions over the past two years.
These acquisitions include its Acquisition for 2.7 billion dollars of the online games operator Gamesys Group, Acquisition for 148 million dollars of the Tropicano Hotel and Casino in Las Vegasand Takeover of Bet.Works for $125 millionone of the leading providers of sports betting platforms.
“We have amassed quite a large number of assets in a short period of time,” Fenton said during a conference call following the income report. “We’ve now had 12 months to watch this and knit this picture together [and] assets that don’t show us a path to near-term profitability will of course be under the microscope, as they should be.
Fenton added that they are evaluating how all of their assets fit together and will make “quick” decisions regarding what is not working.
“The overall strategy remains,” Fenton said. “We effectively identify what becomes non-essential.”
Bally focuses on New Jersey, Pennsylvania, Ontario
Fenton particularly hoped that New Jersey will become a significant driver of earnings growth for Bally’s North American iGaming operations, noting that they are targeting 6-8 points of market share in 2023.
“North America interactive continues to be in both development and ramp-up mode,” Fenton said. “New Jersey had $12 million of GGR and $8.3 million of NGR from our iGaming offering in the third quarter – We expect New Jersey iGaming to continue to grow and be profitable for the remainder of the year. “
Fenton also explained how Bally’s is following a ‘master plan’ when it comes to entering new markets, which will see it focus more on product offerings rather than ‘being too aggressive’ in its rollout strategy. .
“Our progress in sports has taken longer than expected and we will not support sports iGaming markets with marketing dollars until we are sure we have the user experience and technology where we are. want it,” Fenton said. “Different states will have different characteristics, and our goal is to create the plan for states of a similar type before investing in deployment.
During the conference call, Bally’s chief financial officer, Bobby Lavan, indicated that he believed future growth prospects would depend more on online casino operations that online sports betting siteswhile expressing his enthusiasm for the first figures from the Canadian province of Ontario.
“There’s about $7 million in losses in the third quarter, which we consider non-essential or need a plan to make sure they’re at least flat,” Lavan said. “iCasino in New Jersey continues to ramp up, we are very pleased with the early results in Ontario, and we will have iCasino Pennsylvania next year.
“We’re going to minimize sports betting losses – and at the end of the day, that’s what North America Interactive should be. The trajectory is positive, and we’re very confident about that – we really have to look inside those $7 million in losses and having a path. Because burning cash for cash was where the market was two years ago, that’s not where we’re going in the future.
North American expansion and high expectations for the Ontario market
Fenton also expressed excitement over the company’s continued expansion into the North American market as well as the launch of a new Bally Bet sports betting app in the largest market in Canada.
“Yesterday in Ontario we launched our first combined casino and sports betting app,” Fenton said. “We will continue to focus on the online gaming sector in Ontario, which we believe will become one of the most important scale markets in the North American footprint.”
He also noted that Bally’s recently launched Tropicana Las Vegas and plans to continue running a multi-channel portfolio in the United States, hoping to match the status of Bally’s international arm.
“International Interactive returned to growth in the UK, with record margins across the platform, offset by exchange rate headwinds,” Fenton added. “While North America Interactive has seen continued growth with New Jersey iGaming and the launch of our new combined app hosting both sports and iGaming in Ontario.”