ollowing the announcement that Bally's Corporation would expand its footprint into the Pennsylvania gaming market with the development of a mini-casino with real estate and private equity investor Ira Lubert in Centre County; and the company's recent acquisition of daily fantasy sports company Monkey Knife Fight, George Papanier, President and Chief Executive Officer, spoke with Yogonet to provide further details.
Papanier also delved into the company's expansion plans and how it managed to keep growing in a year marked by the ongoing Covid-19 pandemic, having entered into numerous deals in the past nine months.
Which aspects of the category 4 license offered by the state of Pennsylvania were appealing to the company when you decided to develop this project?
The opportunity to enter the Pennsylvania gaming market was extremely appealing as we continually and strategically look to expand our national brick-and-mortar footprint. Centre County is an untapped region within Pennsylvania’s attractive gaming market and we look forward to leveraging our experience in greenfield development to bring our first-in-class amenities and offerings to the Centre County community. We see a bright future for gaming in Pennsylvania, especially given the explosive growth of sports betting and online gaming, and we are excited to be a part of that.
An equally appealing element of the project is the opportunity to work alongside Ira Lubert who has significant ties to the Centre County community and using this transformative project to have a positive impact on the redevelopment of that community.
What are the benefits of the Pennsylvanian gaming and sports betting markets? How do you think residents will receive this casino?
We expect Pennsylvania to be one of the largest sports betting and iGaming markets in the U.S. In 2020 alone, the state generated more than $270 million in sports betting revenue, and $566 million in iGaming revenue.
Why have you chosen the Penn State University location for the casino?
We believe Centre County is an untapped region within Pennsylvania’s attractive gaming market, and look forward to leveraging our experience in greenfield development to bring our first-in-class amenities and offerings to the Centre County and Penn State community.
We hope and anticipate that the Centre County community will embrace the casino. It is a transformative project that we expect will have a positive impact on the redevelopment of that community.
Last month, you announced that construction is expected to begin in the first half of 2021 and will take approximately one year to complete. Are these estimations still standing or have there been any delays due to the ongoing Covid-19 pandemic?
Our project timeline has not changed.
Could you detail the amenities and services that the property will include? Are you planning to include a sportsbook as well as online casino gaming and betting?
The property will house up to 750 slot machines and 30 table games, while the casino will also provide, subject to receipt of separate licenses and certificates, retail sports betting, online sports betting, and online gaming.
We have an agreement with Ira Lubert to jointly design, develop, construct and manage the casino, and look forward to combining our proven track record with Ira Lubert’s local knowledge and expertise to bring Bally’s first-in-class gaming experience and amenities to customers and sports fans across Pennsylvania.
Bally’s owns and manages 11 casinos across seven states and, following the completion of pending acquisitions, it will own and manage 15 casinos across 11 states. Why do you think the company managed to continue expanding its footprint across the U.S. despite the difficulties that arose due to COVID-19?
We have always operated with high levels of liquidity and low leverage, which positioned us well to capitalize on strategic M&A throughout the pandemic. Over the past months, notwithstanding the current operating environment, we have successfully implemented our strategic growth and development initiatives, and expanded our gaming and entertainment operations by announcing five acquisitions in just the past nine months, a market access partnership in Iowa, and plans to construct a category 4 casino in Pennsylvania.
Are there major differences in terms of regulations, legal requirements, and tax rates across the different U.S. states? How do you manage to adapt to those differences?
While there are certainly differences across markets in terms of regulations, legal requirements, and tax rates, Bally’s has proven to be extremely adaptable as a company, working closely with government and regulatory officials to ensure that we operate within all necessary guidelines.
Could you briefly comment on some of the adaptations the company had to include and the impact the ongoing Covid-19 pandemic has had on your operations?
At one point during the pandemic, we were forced to close seven of our casino properties due to COVID-19 restrictions. At that time, we took the opportunity to review and optimize our operations.
Since reopening, we have implemented meaningful marketing efficiencies, increased sanitation and safety protocols, and reduced operating expenses. We have also become more selective with our amenities, focusing on higher-margin products. As a result, Bally’s now operates at a higher margin than it did before the pandemic.
We believe that many of the efficiencies we realized are sustainable over the long term and will result in improved profitability for our properties. As always, we will remain adaptive to ever-dynamic market conditions.
The company also announced it acquired daily fantasy sports company Monkey Knife Fight. How do you plan to integrate this with the rest of your gambling and entertainment offerings?
Acquiring Monkey Knife Fight is the next step in Bally’s long-term growth and diversification strategy. The pending acquisition, which will become an integral component of the “Bally’s Interactive” division, will provide us with market-leading fantasy sports content and a brand whose player database can be developed and leveraged to support the launch of Bally’s sports betting and iGaming operations. Daily fantasy sports is a high-growth element in what is a rapidly-expanding industry and adds another differentiation to our omnichannel approach.
Monkey Knife Fight will complement our recently announced acquisition of Bet.Works and media partnership with Sinclair Broadcast Group. We look forward to combining Monkey Knife Fight’s expansive geographic presence, which spans 37 states, the District of Columbia, and Canada, with Sinclair's expansive media footprint to provide unique daily fantasy sports offerings to sports fans nationally.
Why have you chosen specifically Monkey Knife Fight to broaden the scope of your operations?
Monkey Knife fight is the fastest growing gaming platform and third-largest daily fantasy sports operator in North America and makes Bally’s just the third sports betting company in the U.S. to have a fantasy sports segment.
The acquisition was a logical decision to expand the scope of our operations, allowing Bally’s to leverage both its current robust database with Monkey Knife Fight’s collection of over 180,000 registered players. We believe that this will provide Bally’s with a significant advantage in launching our own B2C sports betting operations.