Strategic Casino Acquisition: Standard General Completes Purchase of Bally’s Casino

Standard General, a prominent hedge fund, has officially finalized its $4.6 billion acquisition of regional casino operator Bally’s Corporation (NYSE: BALY). This significant takeover marks a new chapter for the gaming company, expanding its reach and potential. The deal, which was initially announced in March of last year with an offer of $15 per share, saw Standard General increase its bid to $18.25 per share in July 2024, ultimately gaining acceptance from Bally’s investors.

The financial backing for this substantial acquisition came from a combination of sources. According to statements released by the companies involved, the cash consideration was primarily financed through the issuance of $500 million in senior secured notes due in 2028, provided by funds managed by Apollo. Additionally, Bally’s utilized its existing cash reserves and other available funding sources to complete the transaction.

Expansion of Bally’s Casino Portfolio

A key aspect of this acquisition involves the integration of Queen Casino & Entertainment Inc., which is majority-owned by Standard General. This brings several valuable assets under the Bally’s umbrella, including the Belle of Baton Rouge and Casino Queen Marquette in Iowa. These riverboat casinos are currently undergoing conversions to land-based facilities, with completion expected later this year. Furthermore, Queen also operates DraftKings at Casino Queen in East St. Louis, Illinois, and the Queen Baton Rouge, enhancing Bally’s presence in the sports betting and iGaming sectors.

Bally’s Stock Structure Post-Acquisition

Interestingly, unlike many public company takeovers by private entities which typically result in delisting, Bally’s investors were offered the choice to receive cash or retain their equity. A significant portion of shareholders, 17.9 million, opted to keep their shares. This means that 48.4 million shares of Bally’s common stock will remain outstanding. Additionally, there are warrants allowing for the purchase of up to an additional 11.6 million shares.

These remaining shares under the ticker ‘BALY.T’ will continue to trade on the New York Stock Exchange and will revert to the familiar ‘BALY’ ticker symbol starting Monday, February 10, 2025. This continuity aims to provide stability for investors.

Bally’s Future Plans and Growth

With the acquisition now complete, Bally’s Corporation, headquartered in Rhode Island, now operates a total of 19 casinos across 11 U.S. states. Beyond its existing casino holdings, the company also manages a golf course in the Bronx, New York, and a racetrack in Colorado, demonstrating its diversified approach to gaming and entertainment. A significant focus for Bally’s is its bid for a casino license in New York City, with plans to transform a golf course into a premier gaming destination. This ambitious project represents one of the company’s most substantial investments to date.

Bally’s has also established a strong presence in the sports betting market, holding licenses in 13 jurisdictions across North America. While there has been speculation about potential asset sales within the company, particularly its sports wagering unit, no such deals have been finalized. The company’s iGaming platform, known as Bally Casino, is currently accessible in four states, showcasing its commitment to the online gaming sector.

Standard General has not publicly commented on any potential future asset sales, but they have affirmed their commitment to successfully launching Bally’s Chicago casino. This project is considered crucial to the company’s long-term growth strategy and represents a significant investment in the gaming industry.

Conclusion

The completion of Standard General’s acquisition of Bally’s Corporation is a pivotal moment for the company, marking an expansion of its portfolio, a strengthened financial foundation, and ambitious plans for future growth. This deal brings together a wealth of assets, including established casinos, emerging land-based conversions, and a growing presence in both sports betting and iGaming. With a focus on key markets like New York City and continued investment in existing projects, Bally’s is poised to remain a significant player in the competitive casino and gaming landscape. The strategic decisions made by Standard General will undoubtedly shape the future trajectory of this prominent gaming operator.

Image: Standard General Founder Soo Kim