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Bally’s CEO on M&A, sports betting… and Gamesys

| By Robin Harrison | Reading Time: 4 minutes
Bally’s Corporation has gone from a single asset operator to a nationwide US brand in just seven years, and is on the cusp of agreeing what could be the deal of the year. Chief executive George Papanier discusses a flurry of activity that has taken the business formerly known as Twin River to the pinnacle of the industry.
Twin River

At the start of it all was a greyhound track. Lincoln Park in Rhode Island, then owned by a British company trading under the Wembley brand, was acquired by an investment consortium in 2005, followed by a deal for Colorado’s horse racing track Arpahoe Park later that year. 

Chapter 11 bankruptcy followed in 2009, before Twin River Worldwide Holdings emerged from that process. It was not until 2014, with the acquisition of Hard Rock Biloxi, that the business operated more than one casino. 

Seven years on the business now known as Bally’s Corporation maintains a network of 15 casinos across 11 US states, with a database of 15 million players. It can offer sports betting in 13 states.

Through a wide-ranging partnership with Sinclair Broadcast Group, there will be a network of regional sports networks under its brand. Customer acquisition and retention will be aided further by its acquisition of daily fantasy operator Monkey Knife Fight, and free-to-play sports specialist SportCaller.

It’s also aiming to pioneer what it describes as a B2B2C model, running supplier and customer-facing businesses in tandem, through its acquisition of Bet.Works. All of these elements could be considered transformational. 

But it’s the potential deal to acquire Gamesys that stands above everything else. It would bring together a business with a thriving and diversified igaming operation, with Bally’s sports betting and brick-and-mortar assets. 

“Gamesys is one of the small handful of online gaming businesses which have successfully penetrated the mass market segment; it also has its own technology and has demonstrated that it can work successfully with big grown-up brands,” Regulus Partners’ Paul Leyland wrote of the deal. 

“The Virgin brand is also present and moderately successful in New Jersey. In this context, what Gamesys can bring to the developing US igaming market is as clear as it is attractive. Bally’s also fixes Gamesys’s tardy US state access situation.

“With dynamic management and a strong access footprint, a vertically integrated approach to igaming makes a lot of commercial sense,” he continued. “Equally, Gamesys was one of the few listed gambling companies with US exposure that was not enjoying much (if any) of the hype premium: the valuation is therefore attractive too.”

The structure for the combined business is already in place. When Bally’s announced its $125m deal for Bet.Works, it outlined plans to split the business into brick-and-mortar and interactive divisions. This will see Papanier manage the land-based portfolio and Bet.Works founder and CEO David Wang become chief executive of the newly minted Bally’s Interactive arm. 

Papanier is limited on what he can say, as an announcement of ongoing talks, under Rule 2.4 of the UK Takeover Code has been made. It won’t be until an announcement under Rule 2.7, announcing a firm intention to go forward with the deal, that the full plan can be set out. 

However, he tells iGB the land-based and interactive structure announced in the wake of Bet.Works will be implemented: “We will initiate that structure once we close on the Bet.Works deal, which is slated to close in Q2, and that structure will remain in place,” he says. 

“All the interactive assets will fall into that division, so all of those, including Gamesys, will fall under that silo.”

This will see Gamesys chief executive Lee Fenton take charge of the combined entity, per the agreement announced in March. The Jackpotjoy operator’s founders and executives have already announced they will back the deal, with Robeson Reeves also taking up an executive role, and two directors joining the Bally’s board. 

The restructuring will most likely take place in June, when the Indiana Gaming Commission holds its next meeting. Once the Bet.Works deal is approved by the regulator, Papanier is confident that the transaction can be closed “almost instantaneously”. 

While this means a proprietary sportsbook, under the Bally Bets brand, will not go live until the second half of the year, there will be no knock-on effect to the partnership with Sinclair Broadcast.

This will see its regional sports networks, previously under the Fox Sports brand, rebranded as Bally Sports. 

“The renaming is underway as we speak,” Papanier says. “You’ll see the roll-out of that with the start of the baseball season, so you’ll see all the rebranding and signage changes, from Fox Sports to Bally’s. 

“The Fox Go application, which has more than 30m subscribers, will be rebranded as Bally Sport as part of this. That is going to be significant in reducing acquisition costs. None of that is being limited by the closing of the Bet.Works transaction.”

Nor are these deals likely to slow Bally’s M&A drive, he adds. 

“We’re going to continue to be opportunistic,” Papanier continues. “We’ll prioritise access to sports betting and igaming, both via brick-and-mortar and through open agreements, but we’re always going to look for complementary technologies and platforms for igaming, such as the Gamesys deal. 

“We’ll also look for more deals similar to Monkey Knife Fight and SportCaller, so wherever that takes us, that will be our motivation.”

And this won’t be limited to sports betting. While the pace of regulation and market openings are outpacing those of igaming, Papanier is confident online casino will catch up, especially in the post-Covid world. States are going to be looking for new revenue sources, and opportunities to generate additional revenue, he says, which makes igaming a natural progression from sports betting. 

While brick-and-mortar remains his “wheelhouse”, Papanier says his position on the board will allow him to participate “in an intimate role” as Bally’s expands online. And he’s certainly keen to keep that engagement going. 

“I was privileged enough to ride the wave of casino expansion in the US, and now I get to participate in a complementary wave of expansion through igaming and sports betting,” he explains. 

After all, he says, the business has changed beyond recognition from the one he joined as chief operating officer in 2004. Now with 15 casinos in 11 states, plus robust betting and igaming operations, and with the potential to be one of the first operators to offer a truly omni-channel product range.

“I’m really proud to have participated in that transformation in the company in such a short space of time,” Papanier says.