Bally’s Will Wait Until April to Launch New York Mobile Sports Betting App, Says Kim

Posted on: January 27, 2022, 04:01h. 

Last updated on: January 28, 2022, 01:18h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

In case you haven’t heard, mobile sports betting in New York is all the rage these days. As the biggest state to launch a multi-operator system, New York quickly established itself as the nation’s top sports betting market, and that was with some approved operators – such as Bally’s Corp. – still on the sidelines.

Soo Kim
Soo Kim, chairman of Bally’s Corp., talks to CNBC on Tuesday regarding a proposal by a hedge fund he manages to buy the gaming company. Kim also discussed why Bally’s isn’t in a rush to launch its mobile sports betting app in New York. (Image: CNBC)

And according to Bally’s chairman, don’t expect the company to launch its app in New York any time soon.

Soo Kim spoke with CNBC reporter Contessa Brewer earlier this week. He said that BallyBet won’t roll out until “sometime in April,” and that he was fine with missing out on the upcoming Super Bowl.

We have a longer-term plan,” Kim said. “I think part of this is why maybe our plan isn’t fully being grasped by the public markets. Public markets tend to be very short-term oriented.”

Since Bally’s Corp. stock (NYSE: BALY) hit its 52-week high of $75.92 last March, the stock has trended downward. After a slight uptick last fall, shares continued their fall and reached the 52-week low of $26.11 just last week.

Kim attributed the tumbling price to the gaming industry in general spending too much on promotion. He said that will eventually show up in poor earnings reports.

This week, though, the stock has rebounded after Standard General, a hedge fund that owns a 20 percent stake in Bally’s, offered to buy the remaining shares for $38 each. Kim is the managing partner for Standard General. However, he told Brewer that he recused himself from acting as Bally’s chairman on the deal.

A special committee from Bally’s is looking into the offer. According to Standard General’s offer, the deal will only take place if that panel signs off on it.

Changing Business Model

The long-term play in sports betting, he said, will involve a market contraction. While New York will have nine operators competing when they all launch, Kim noted that other states have more licensees – or the ability to offer more.

In Indiana, for example, BallyBet is one of 13 operators. However, the state law legalizing sports betting allows for up to 39 sports betting apps to get licenses.

We think that actually, the current version of sports betting is not a great business,” Kim explained. “It’s a fine business, not a great business. We think that there’ll be a wave of consolidation that will rationalize promotions. But more importantly, I think that people will stop competing with just free money, but people will start competing with product.”

Kim didn’t explain in detail in the interview what that product may look like. However, in early December at SBC Summit North America – in another interview with Brewer – Kim described the current sports-betting environment as a niche of a niche market.

Only a fraction of people who have cable or streaming packages watch sports regularly, he explained. And of those people, only a fraction of them bet on point spreads and moneylines. But Kim did say that he thinks there is a big opportunity with a younger generation, who may want more luck-based opportunities in gaming.

New York Promos Concern Kim

Kim also seemed shocked at how the first wave of mobile sports betting apps have operated in New York over the first couple of weeks.

He told Brewer that he thought the smaller number of operators, coupled with the 51 percent tax on gaming revenue, would lead to “a little more reasonable” approach to customer acquisition and promotion.

It’s kind of funny, like literally, without casting aspersions on all of our fellow colleagues and industry participants, but you could literally open an account with one (operator), open an account with another (operator), get your free promotional money, and bet. I don’t know why everyone’s not doing that,” he said this week.

It may not necessarily be as easy as Kim makes it out to be. The free bets and promotional opportunities vary among the six operators currently live in New York. In many cases, there are certain terms and restrictions placed on the credits or bonuses received.

What’s Available in New York

PointsBet, which launched this week, is offering a risk-free first bet of up to $500 and a risk-free PointsBetting wager of up to $1,500.

Caesars, the current market leader in the state, is offering $300 in free bets for new customers who make a $20 wager on their first bet. BetRivers is offering a $250 bonus match on first-time deposits

DraftKings is offering a risk-free first bet of up to $5,000 if new users make an initial deposit of $1,000 or more. BetMGM and FanDuel are both offering risk-free first bets of up to $1,000.

Those specials are only for first-time customers with that specific app. For example, someone who set up a DraftKings account in New Jersey would not qualify for that operator’s first bet promo in New York.

According to data from the New York State Gaming Commission, the four sportsbooks that launched on Jan. 8 – BetRivers, Caesars, DraftKings, and FanDuel – reported a handle of more than $600 million for the first nine days of operation. It’s unknown exactly how much sign-up bonuses, site credits, or risk-free wagers contribute to the handle.

Besides BallyBet, the other New York operators awaiting approval to launch are Resorts World and Wynn Interactive.