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Bally’s Unloading Asia Digital Gaming Division
Bally’s is dropping off its digital gaming unit that operates in Asia, with the company streamlining operations and focusing on other markets
A Form 8-K filing with the Securities and Exchange Commission has detailed the company’s plans for its Asian gaming division, with the company not expecting the deal to have a “neutral” impact on its earnings before interest, taxes, depreciation, and amortization or EBITDA.
Bally’s Sheds Asian Business to Refocus Operations
Bally’s is selling the division to a number of members of management of the Carved-Out-Business, referring to the Asian gaming division and international operations, who have shown interest in retaining and developing the asset, while mustering the cash to acquire it. Financial details were not disclosed immediately.
The financial material is not expected to be material to Adjusted EBITDA or free cash flow, the company said in the updated file to the regulatory watchdog. However, there will be a drop in these performance markers, which will be later offset by what Bally’s has described as a simplification of the organizational structure of the company and streamlining its operations.
Bally’s went on to outline that it expects to continue generating revenue from the model of the sale, which includes royalty fees and licensing agreements in place.
“Going forward, the financial statements of the Company will only reflect licensing and royalty revenues received from the Buyer, which are expected to be lower than revenues under the current accounting treatment, but the profitability margins associated with those licensing revenues are expected to be higher as is customary in the gaming industry for IP license business models.”
Pulling the plug on its Asian digital operations, however, does not mean that Bally’s is going out of the online gaming arena. Rather, the company is hoping to redirect resources back to North America and Europe, where competition has been growing more cut-throat by the day, but where profit margins have been tempting, nevertheless.
The decision to cut ties with Asia may also come as a bit of a surprise however as, after the second-quarter update by the company, CEO Robeson Reeves said that despite challenges in Asia, Bally’s was determined to continue pursuing local growth and opportunities.
Seizing the Day and Divesting Where It Matters
“We believe the Asian Interactive market remains an attractive opportunity and we will continue to work to manage and grow our position in this important region,” he said, dodging questions about a rumored merger at the time.
With Asia out of the way, however, Bally’s can indeed plough significant resources back into the United Kingdom, which is the company’s strongest digitally performing market it seems. As to the actual deal concerning the sale of the Asian division, the details are not clear.
It is not exactly known who initiated the transaction, and whether Bally’s had been actively trying to sell its division or just pounced on the opportunity as soon as it presented itself.
Although Fiona doesn't have a long-spanning background within the gambling industry, she is an incredibly skilled journalist who has built a strong interest in the constantly growing iGaming network. The team at GamblingNews.com is glad to have her on our roster to help deliver the best stories as soon as they hit. Aside from writing, she loves to dabble in online casino games such as slots and roulette, both for her own enjoyment and also as research to better improve her understanding of the industry.
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