Bally’s to sell Asian interactive business to focus on North America and Europe
Bally’s will sell its interactive business in Asia and other markets to a company comprised of management from the interactive business.
Key Points
- Bally’s will be selling its interactive business to a company comprised of management from the interactive businesses being sold
- Bally’s will no longer manage, operate of govern the business, but will receive licensing and royalty revenue
An 8-K Form has confirmed that Bally’s Corporation has entered into an agreement to sell its interactive business in Asia and other international markets to a company comprised of members from the interactive business – labelled the ‘Carved-Out Business’ in the 8-K Form.
Certain Bally’s intellectual properties will be licensed to the carved-out business’ management company for a five-year term, subject to extension. Bally’s will also provide certain transition services to the company, as the company is purchasing the interactive business in exchange for a note.
Bally’s will therefore play no role in managing, operating or governing the carved-out business going forward.
According to the 8-K Form, ‘The transaction is intended to allow Bally’s to focus its capital and resource allocation on North American and European business, and this carved-out business will benefit from focused management attention and aligned ownership.’
Good to know: The Bally’s-owned Tropicana on the Las Vegas Strip was demolished on October 9, making way for the new Oakland A’s baseball stadium
The transaction is not expected to be material for Bally’s adjusted EBITDA or free cash flow, though a modest decline in both of these metrics is expected. This is due to the fact that the carved-out business will now only generate revenue for Bally’s via licensing and royalty revenues. This is expected to be offset by high profitability margins for IP licensing, however.
The document was signed by Bally’s Chief Legal Officer Kim Barker.
Bally’s North America Interactive segment revenue grew by 94.7% year-over-year in Q2 2024, totaling $49.2m. This is despite International Interactive revenue dropping from $247.8m in Q2 2023 to $229.4m in Q2 2024. Overall, company-wide revenue rose 2.5% year-over-year during the quarter.
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