Decreased competition from tax hikes is ‘healthy’

Bally’s International Chairman Soo Kim told ICE’s World Regulatory Briefing on Monday he didn’t think higher gambling taxes were necessarily a bad thing. 

“In most jurisdictions, as the taxes go up, there’s less competition,” he said in response to questions on competition and plans for expansion in Europe. 

“We don’t necessarily advocate for higher taxes everywhere, but we don’t necessarily think it’s a bad thing, actually,” he said.

Kim added that decreased competition was “healthy” for the sector, and European markets facing tax increases would see significant consolidation in the next few years. 

He hinted that shrinking competition was beneficial for an operator of Bally’s size and scale, and highlighted markets where it had a competitive advantage due to the high tax rate.  

“We pay the highest taxes in the country in Rhode Island, but we have a monopoly on casinos and online games,” he told the audience. “[But] Nevada has the lowest taxes in the country at 6.9%, and because of that there’s unlimited competition.”  

However, Kim also touched on the compliance challenges presented by increasing tax rates, noting some bad actors will seek to mitigate increased costs.  

“We think the market will balance out at any tax rate. The higher the tax rate, the fewer the operators, and the bigger they have to be to compete,” he added.  

Customer data ‘most valuable’ operator asset

Digging into Bally’s merger with European lottery giant Intralot, Kim said he didn’t see Allwyn “or any other company” as competition. He then touched on leveraging lottery player data and how valuable it is to an operator. Kim noted state lotteries did not utilise player data historically, but the next wave of operators will leverage it to improve the player experience.

“We want to meet our customers everywhere they are. I do think at some point there is a question of lottery operators not wanting to know who their customers are. But in reality, that customer data is super important. It’s the most valuable thing the business has.

“Historically, the government lotteries have not taken that data. Next-generation platforms will have a consumer-facing wallet or player account engine built into them,” Kim told the audience.

Bally’s’ ‘disciplined’ investment strategy

Bally’s has been prolific in its expansion efforts of late. Its portfolio has grown to include the troubled Star Entertainment business in Australia and its successful bid for a $4 billion integrated resort in the Bronx, New York.

Moderator Nadine Dereza questioned Kim on Bally’s investment strategy, as many have questioned how it could be funding these major deals.

“I look at the world as opportunistic and every asset has a price,” he replied. “We don’t believe that something can be priceless. We try to be disciplined about the price that we engage at. And that’s why we’ve been successful at continuously acquiring and merging with companies, because we’ve been able to be disciplined about the price we acquire something [for].

“We don’t blow all of our capacity on any particular investment, so that we always have some capacity to deal with new RFPs, new opportunities.”