Good afternoon everyone,
Wink and you might miss the latest news on Dover casino-racetrack owner Bally’s.
The company that recently rebranded the former Dover Downs to the Bally’s name is busy building an international empire off a vaguely familiar name in the gambling business.
The deal-making kicked into high gear in 2019, with the acquisition of Dover Downs.
Earlier, the Delaware General Assembly made Delaware properties more attractive to would-be buyers through regulatory changes that provided financial relief During the 2009 financial crisis, Delaware opted for a revenue-sharing formula that when coupled with fewer out-of-town patrons moved Dover to post break-even results and even small losses.
The acquiring company, then known as Twin River, operated casinos in Rhode Island and smaller properties in a few other locations. The expansion post-Dover was a bold move, given the uncertainties coming from the Covid-19 pandemic.
Like Delaware, Rhode Island was facing intense competition from neighboring states, notably from the Wynn Las Vegas-style casino in Boston. Unlike Dover Downs, the answer for Twin River was expansion.
As part of the buyout, privately held Twin River, controlled by New York billionaire hedge fund investor Soo Kim, took the company public via Dover Down’s public traded status and snapped the aging Bally’s casino in Atlantic City as well as other regional gaming spots.
Twin River gained financial flexibility by selling the real estate at Dover Downs and other casinos to a company in return for a long-term operating agreement.
While moving into electronic gaming and sports betting, Twin River opted to buy the Bally’s name from gaming giant Caesars in its effort to build a national brand. Among Bally’s electronic holdings is a sports fantasy game known as Monkey Knife Fight that will not bear the Bally’s name.
The new Bally’s is about to snap up an aging Las Vegas strip casino, the Tropicana (no relation to the Atlantic City casino of the same name). The Trop’s history dates back to the early mob-dominated early days of Las Vegas.
Bally’s started out as a manufacturer of pinball machines with a natural expansion into slots. It later became a casino company that was dogged by allegations of ties to organized crime. It also made a foray into fitness clubs that ended up in bankruptcy court.
Bally’s casinos later became part of what is now known as Caesars, a company that has gone through various name changes and buyouts.
Last week, Caesars said it will rebrand its last Bally branded casino on the Las Vegas strip to its Horseshoe brand used in Baltimore and other locations.
Kim responded by indicating that the Tropicana will more than likely be rebranded to the Bally’s name. Options include renovating the casino-hotel or imploding it and starting over, a popular pastime in Las Vegas.
There are also reports that the Oakland A’s baseball team might join the NFL Raiders in Las Vegas. Once the Tropicana purchase is completed, Bally’s will have 35 acres available for a stadium.
Finally, Kim’s private equity firm announced plans to buy out Bally’s shares at a premium to the current price. Shares rose, although the deal is subject to approval by stockholders. Kim’s company controls about 20% of Bally’s stock.
I’ll stop here. By the time you read this, Kim’s company might have announced another deal. – Doug Rainey, chief content officer.