A leading US provider of land-based gaming and immersive entertainment, Bally’s Corporation has entered into a definitive agreement to acquire Monkey Knife Fight (MKF), North America’s third-largest daily fantasy sports (DFS) operator and one of the fastest-growing gaming platforms.
Bally’s all-stock transaction makes it only the third US sports betting firm to have a fantasy sports section. In 2020, SponsorUnited listed MKF, which offers its users a diverse and innovative slate of everyday sports and e-sports competitions, as the sixth most-searched and tenth fastest-growing sports and entertainment brand.
Long-term growth and diversification strategy
The acquisition of MKF by Bally represents another step in the long-term growth and diversification strategy of the organization to become the first B2B2C business model truly vertically integrated sports betting and igaming company in the US. It complements its recent media relationship with the Sinclair Broadcast Group and, including its proprietary technology stack, its pending acquisition of Bet.Works.
As part of the transaction, MKF will acquire instantly exercisable penny warrants to buy up to approximately $50 million in common shares of Bally (subject to adjustment) at closing, and contingent penny warrants to buy up to approximately $20 million in additional common shares of Bally on each of the first and second anniversaries of closing, for a potential total of up to approximately $40 million.
The contingency relates to the ongoing operations of MKF in the jurisdictions in which it is involved at closing. The deal is scheduled to close, subject to customary closing conditions, in the first quarter of 2021.
High-growth DFS market
George Papanier, Bally’s Corporation’s President and CEO, stated: “With this acquisition, we are pleased to enter into the high-growth DFS market. Monkey Knife Fight is a unique asset that we look forward to incorporating into Bally’s constantly growing omnichannel portfolio of land-based casinos and igaming platforms.
“As with all of the properties and services that fall under the iconic Bally’s brand, we are committed to providing a best-in-class DFS platform to sports fans around the country.”
MKF’s exclusive, user-friendly gaming platform will become an integral component of the ‘Bally’s Interactive’ division with approximately 180,000 registered users and 80,000 depositing players, as well as add to the rising player database of the business.
Database of players
In states such as California, Florida and Texas, which are projected to account for 20-25 percent of US sports betting revenues, the gaming site would help Bally’s efforts to build a future sports bettors database. It will also allow the company to develop a database of players in Canada, a market that is expected to soon legalise sports betting.
The acquisition will lead to the production of fresh and engaging content for its clients through Bally with MKF.
Papanier continued: “The MKF acquisition will allow Bally’s to leverage both its current customer database as well as DFS’s collection of depositing players. These assets will also provide Bally’s with a significant advantage in launching its own B2C sports betting operations.”
Expansive geographical reach
Bally aims to combine the expansive geographical reach of MKF, which covers 37 states, the District of Columbia, and Canada, with the large media footprint of Sinclair, including its 21 regional sports networks portfolio, to engage sports fans across the US by delivering exclusive DFS deals.
Bill Asher, Monkey Knife Fight Founder and CEO, added: “Since our inception, we have distinguished ourselves from competitors by providing the best experiences for our valued players, forming strategic partnerships with teams, ownership groups and players unions, and acquiring strategic assets to bolster our position in the market.
“I am immensely proud of all we have accomplished over the past three years at MKF and am confident that the talented Bally’s team has what it takes to continue to grow and develop what is already a great business.”