When the dust settled on the deal struck between Bally’s Group and Ameristar in November, the deal included an agreement to “facility the consolidation of some of Ameristar’s Bally’s slot and gaming properties in the Midwest and South markets into a joint venture”. But that’s all it was. Now the question becomes, what happens now?
The key for Bally’s is to prove it can recapture its former glory and maximise its profitability. When I visited the casino and non-casino sites in December 2016 (that’s the look of things at night), the andthe collapse of the emerging Bally’s/Ameristar tie-up was already a given. The properties were remarkably run but probably not well enough to generate the profit levels necessary to keep them viable.
That suggests Bally’s will be looking to reinvest in itself as much as the Betfair group did in 2016 with a far more concentrated group of properties. At the same time, the new Bally’s/Betfair alliance represents a way to further expand and extend the brand into other markets.
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The challenge at the moment is where exactly the money will be spent. While Bally’s produces more than half of all the slot revenue in the US, what they don’t have is enough live table gaming: only three new full-sized tables in 2018, despite the fact that baccarat is in the ascendant in the US. Hence the need for extra baccarat tables at Bally’s Chicago and Philadelphia properties. Also, too, is the decision to locate a baccarat facility in Alberquerque, rather than St Louis.
Plus, there’s the issue of tax in the regulated casinos themselves: local bodies are watching closely how Bally’s shares the tax burden with its competitors. I suspect the big question is whether Bally’s will withdraw from some of its markets in the Midwest, specifically Kansas, Missouri and Illinois. It seems obvious to me that the Mariani and Monmouth casinos in Maryland are two relatively untapped outlets, but Bally’s probably won’t do any deal there – that part of the country is already dominated by MGM, and Seneca’s Resorts Chicago is eyeing a second facility, with slots inside a golf course clubhouse.
Reinvigorating the casino brings instant profit to the table, and while Ameristar will take a charge, the real value is yet to be seen. Bally’s needs to evolve, bring new channels of revenue online, and roll out high-definition screens in the environment to realise its potential. Everyone knows what it would look like.