Bally’s Largest Shareholder On Future of Sports Betting, Return To In-Person Gambling & More
George Rose/Getty Images. Pictured: Bally’s Casino in Las Vegas.
A year after the COVID-19 pandemic shuttered virtually every American casino — and much of the rest of the hospitality and entertainment industries — gaming stakeholders are seeing a steady return to pre-pandemic conditions. In the meantime, many of the future gaming trends beginning before the shutdowns have accelerated, helping shape an industry that’s increasingly online but still excited for its brick-and-mortar potential.
Soo Kim, managing partner and chief investment officer of Standard General, says gaming’s future will be shaped by not just online and retail casinos, but further integration into American’s daily entertainment consumption. Standard General is the largest shareholder of Bally’s, the former Twin Rivers Worldwide Holdings and now one of the nation’s major gaming expansion and growth catalysts.
In an exclusive interview with The Action Network, Kim explains retail casinos’ rebounds, online gaming’s future and how Bally’s looks to take on an increasingly competitive U.S. sports betting market.
Ryan Butler: Online casino gaming, poker and sports betting were steadily expanding even before the COVID-19 pandemic. How has retail casino shutdowns, and the pandemic overall, shaped the growth of online gaming?
Soo Kim: Like so many businesses, I think the pandemic has helped accelerate this change.
Our Twin River casino near Providence, Rhode Island was the second casino in the country to close. We didn’t even have a way to lock the doors. We had to go out and buy chains. We literally were structured to never close and all of a sudden, we’re closing. This started to accelerate everything in life, including what the future would look like.
I think it’s clear that online gaming writ large — not just online mobile sports betting, but online gaming overall — is the future.
RB: How does this online growth impact long-term retail casino developments?
SK: I’m a long-term believer in the retail experience. I think that there’s absolutely a communal experience that a physical casino offers that online gaming cannot. I think they will very much complement each other in the future. I think that’s a huge amount of growth. It’s very exciting.
RB: What about in the short term? How have regional casino operators such as Bally’s handled the pandemic and what about near-term growth as more properties reopen with larger capacities?
SK: Regional casinos have done fine. Their retail volumes are constrained somewhat because of (COVID-19 restrictions), but that being said, for the most part, most of them have had very good bottom lines. Essentially what they’ve done is they’ve let go of some of the less profitable revenue sources so what revenue sources remain are very profitable. I think that they’ve done well. I think as the world starts to reopen, I think that the revenues will grow dramatically.
I also believe that costs will not grow as much. I think that at least for the near term, I think we’re in a sort of golden age of profitability for physical casinos because so many casinos have done a good job of cutting some costs. As revenue starts to come back on its own, I don’t think costs necessarily increase. Now I think that over time as the reopening goes longer and longer I think the costs will start to slowly crawl back because people will fight hard for the revenues, But I think in the very near term, I think revenues will continue to strengthen the casinos as the reopening occurs. And I think that profitability will be great.
RB: Even during the pandemic, leading gaming companies made major retail and digital moves. Will this continue in a post-COVID world?
SK: I think we’re just getting started. It’s almost like a land grab and I don’t think that it’s clear exactly who is going to win and lose just yet. I think you’ll see continuous mergers and accusations, as people fill in the gaps, make up for lost time and fulfill their strategic plans.
I think it just naturally flows that there’ll be consolidation as the business starts to gravitate to the handful of vendors. But I do think that even though there’s going to be consolidation, I do think that there is hope in any given market for any given operator.
RB: Bally’s has been a major player in this ‘land grab’ in the past year by acquiring multiple retail casinos and several online gaming platforms. It also struck a groundbreaking media deal with Sinclair Broadcast Group, one of the nation’s largest television station owners, that gives the company content deals across multiple platforms and renames the former Fox regional sports networks. What does Bally’s envision with this partnership?
SK: We believe that understanding the relationship between media and gaming is critical. Look at the success that Penn National has with its genius partnership with Barstool. Barstool ultimately is a new media company. It’s a media company and content generation engine, I thought that that was a really interesting lesson in terms of what happens if you tie the media and the gaming together.
[For Bally’s], it was taking that idea and seeing where we can with it.
RB: What will that look like practically on the new Bally’s-branded Sinclair properties?
SK: The relationship with Sinclair is actually not just about integrating the sports on the pregame or postgame show, but we also have the ability to grow that relationship in terms of intellectual property and content to the rest of the network. And that’s really what should send interest into us. I think what you’ll see from us in that not only are we going to be making advancements in gaming technology, but we’re also going to be making advancements in media in terms of content. Our goal right now is to ensure that we can offer something very differentiated to our subscribers.
RB: Bally’s is preparing to launch its first eponymous sportsbook in the next quarter. How does it use this partnership to compete against larger industry leaders such as DraftKings, FanDuel and BetMGM in an increasingly competitive sports betting market?
SK: Our differentiating strategy is not just to launch a sportsbook but to figure out a way to seamlessly integrate our sports betting and make it interactive. What is sports betting? Well, it’s actually in some ways not any different from QVC and television shopping in that it’s a way to directly interact with the content that you’re seeing in front of you, and does so in a way that’s entertaining or gives you something.
So we’re working through the technical problems of creating interactivity. That’s not unique to us, but we’re the ones with the relationships with the sports media rights holders. I don’t think the other companies are as focused as we are on solving that particular problem. If we solve it correctly, then what we’re actually offering is a very differentiated product from wherever else.
RB: With gaming changing rapidly, what do you expect for the industry’s future and how can a company continue to stay competitive?
SK: I think there’s going to be a lot more winners, and I don’t want to even say ‘losers’ because I don’t think anyone’s going to ‘lose’ per se, but I think there are going to be people that that do face some level of attrition in their businesses if they don’t embrace the future. If anything, I think you just have to embrace the future and technology, because if you don’t, then someone’s going to embrace it for you.