Bally's Corporation (NYSE:BALY) has announced that it will cut headcount in its digital games division by up to 15% as it seeks to return to profitability in the North American market.
The Rhode Island-based casino operator made the announcement late Wednesday in a Form 8-K filed with the Securities and Exchange Commission (SEC).Bally's shares rose 3.58% in after-hours trading after falling 0.36% during standard market hours.The small-cap gaming stock is down 12% over the past 41.53 months.
この報告書によると、「役職の廃止に関する決定は、現地の法律や特定の国での協議要件、および当社の事業上の必要性に左右されます」。"当社は、本計画に関連して、約1000万ドルから1500万ドルの現金退職費用が発生すると見積もっています。"2023年の第1四半期に発生する予定です。Bally's has admitted it may have overhired its digital staff during the online gaming boom early in 2020 during the coronavirus pandemic.
As per the regulatory document, there is no assurance that costs related to job reductions will be limited to $1500 million, and that the company "may not be currently envisioned due to possible unforeseen events, including those related to the implementation of the plan." There is no guarantee that no other costs or cash outlays will occur.”
Bally's bets digitally
In recent years, Bally's has been one of the most active acquisitions in the gaming industry, many of which involve online gaming and sports betting.
In 2021, Bally's made its largest acquisition to date, offering $27 billion to buy British online gaming company Gamesys.It also acquired Bet.Works for $1 million, as well as other related assets, including Daily Fantasy Sports (DFS) Monkey Knife Fight (MKF) and free-to-play game provider SportCaller.
Still, it has struggled to gain a foothold in the ultra-competitive US sports betting market.For now, Bally is a bitplayer in many states that offer online games, and has yet to reach the scale of rivals such as BetMGM and FanDuel. Bally is bullish on iGaming and sports betting in North America, but CEO Lee Fenton recognizes that these efforts will take time to pay off.
"As a business, we've done a lot of self-reflection to come to this conclusion. In a letter to digital employees, Fenton said, 'Everyone worked so hard last year and what we achieved together. I am proud of you,” he wrote. “However, we have not achieved all that we hoped for. Mature businesses continue to grow, but face macro uncertainty. Our North American business remains an investment market, We need to have good cost control as it will take time to get the returns.The pandemic has boosted our business and we have kept hiring at full capacity. I think I went too far, and I take full responsibility for that.
Cost savings envisioned by Bally's
Assuming Bally's caps costs related to layoffs at $1500 million, that's not a huge amount, but it could show analysts and investors that the company cares about costs. .
Some Wall Street analysts have expressed concerns about the company's spending plans, including a $17 billion integrated resort project in Chicago.
Still, striving to make online gambling profitable is crucial at a time when rivals are already profitable or trying to end their loss-making trajectory.
Comment