With the official closing of daily fantasy sports app Monkey Knife Fight on Tuesday, February 28, Rhode Island-based Bally’s is looking to move on without looking back at its previous $90 million purchase that occurred in 2021.
In this regard, the official page of Monkey Knife Fight released an official final post on Twitter.
However, that’s not all; as it also reports its intention to exit Las Vegas-based sports wagering technology platform Bet.Works.
Unsuccessful attempts to save Monkey Knife Fight App:
Commenting on the official closure of the application, Lloyd Danzig, Managing Partner at Sharp Alpha Advisors, said: “There were attempts to sell and salvage the Monkey Knife Fight business, which still maintains a passionate user base.
“But, today’s announcement suggests that burn rate had grown too high for the platform to sustain operations without further infusions from Bally’s.”
After the press release, Bally’s shares rose 1.3% and are currently trading at $19.72 per share.
Monkey Knife Fighting App and Bet.Works as the company’s initial mistakes:
Bally’s newly appointed Chief Executive Officer, Robeson Reeves, when commenting on the closure of the MKF app and Bally’s exit from Bet.Works, which the company purchased for $125 million, said: “We’re not going to make the same mistakes we made previously, so we’re looking at all adoptions to [grow] in the most profitable way.
“On sports, we recognize that the Bet.Works acquisition did not give us the platform required to develop a competitive product. We didn’t react fast enough there, and this will not happen again.”
As for Mr. Reeves, he will start as Chief Executive Officer from March after Lee Fenton, the former Chief Executive Officer, formally resigned in the middle of “unacceptable results in North America” in February.
Funds are reduced:
Between Bet.Works and Monkey Knife Fight, Bally’s noted down a non-cash impairment charge of $390.7 million in the fourth quarter of 2022, according to an investor presentation for the quarter.
This represents the second operator in less than a year powerless to use the assets it purchased to enter sports wagering, because Fubo was powerless to find a buyer for the sportsbook it purchased from Vigtory.
Bally Bet, a new sports betting app owned by Bally’s Corporation, has now launched in Colorado, Indiana, Iowa, New York, Arizona and Virginia and will launch in Massachusetts in May. However, the company has not yet started operations in the 11 other states where it has market access.
Bally’s is aiming for a later profitability date:
The company’s analysts forecast a loss of between $40-$50 million in adjusted EBITDA from its North American online sports wagering and iGaming businesses this year.
It officially reported a total loss of $487.5 million for the quarter and entered the year reporting a 15% workforce reduction in an attempt to save $35 million.
However, while Bally’s predicts the division will turn a profit in 2024, contenders such as FanDuel, BetMGM and Caesars are targeting large revenues this year, emphasizing how far Bally’s has to spend in its latest venture.
Bally’s plans for the future:
One company that could potentially be on Bally’s list to purchase this year is PointsBet, if it has the money. However, PointsBet is currently in negotiations to sell its Australian sports wagering business.
But that’s not all; as PointBet also dropped Massachusetts and its Sunday Night Football deal, focusing its attention on local markets. It owns live markets in 14 states compared to Fubo which was only available in three states.
In this regard, Mr. Reeves said: “We are confident there are more economical and nimble solutions out there and have spent the past five months analyzing them deeply.”
However, specifically speaking about finding a replacement for Bet.Works, he said: “A more likely route to replace Bet.Works could be third-party leasing.”
This should benefit companies like Kambi and Endeavor, whose customers abandoned them as soon as they displaced their technology in-house.
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