Soo Kim, the founder and managing partner of Standard General LP, is demonstrating a strong and unwavering commitment to the casino gaming sector despite what he describes as a “soft” market. His confidence in the industry is highlighted by his recent acquisition of Bally’s Corp., a publicly traded casino and resort operator, where he also holds the position of chairman of the board. This strategic move, valued at $4.6 billion, is set to merge Bally’s with The Queen Casino & Entertainment Inc., a regional gaming operator. Once completed, this deal will significantly expand the combined company’s footprint, creating a new powerhouse in the casino and resort industry.
Strategic Expansion and Vision
Kim’s enthusiasm for Bally’s future is evident in his public statements and strategic actions. In an exclusive interview with the Las Vegas Review-Journal, he highlighted his positive outlook and forward-thinking approach. “We’ve been nothing but positive and optimistic and forward-leaning about the prospects for Bally’s,” Kim asserted. He emphasized that the company’s transparent communication with the market, alongside its strategic investments, showcases their confidence in Bally’s potential for future success.
The $4.6 billion acquisition will increase Bally’s gaming portfolio to 19 properties spread across 11 states. This expansion aligns with Kim’s broader vision for Bally’s, positioning it as a major player in the competitive casino gaming industry. A significant aspect of this vision involves Las Vegas, a city Kim views as crucial to Bally’s long-term strategy. Currently, Bally’s operates the Tropicana casino-hotel, a landmark property that is slated for demolition. The 35-acre site, located at the corner of Las Vegas Boulevard and Tropicana Avenue, is planned to be redeveloped into a baseball stadium for the relocating Oakland Athletics, alongside a new Bally’s resort project.
Commitment to Las Vegas and Strategic Positioning
Kim’s strategic focus on Las Vegas is integral to his vision for Bally’s. “We aspire to be an omnichannel operator and an international operator. But I think you have to be in Vegas,” Kim emphasized. His commitment to maintaining and expanding Bally’s presence in Las Vegas highlights the city’s strategic importance in his growth strategy. Las Vegas is not only a key market but also a symbol of Bally’s ambition to become a dominant force in the casino gaming sector.
Addressing Market Criticisms
Despite Kim’s optimistic outlook, Bally’s has faced several criticisms and challenges. Analysts and critics have pointed to a declining stock value and difficulties in securing capital for Bally’s Chicago casino project as evidence of potential troubles. Additionally, there are concerns about the financial feasibility of the new ballpark project in Las Vegas. Kim has responded to these criticisms by showcasing recent successes and addressing concerns head-on.
For instance, Bally’s recently secured nearly $1.5 billion in financing from its real estate investment trust landlord, Gaming & Leisure Properties Inc., to complete the Chicago casino project. This achievement demonstrates Bally’s ability to overcome financial hurdles and underscores Kim’s commitment to the company’s growth. Regarding the Tropicana site, Kim described it as a “tremendous opportunity” despite the market’s skepticism. He believes that the right project will ultimately be financed, even though the original plan of building a ballpark first has evolved. Kim now envisions a project that will complement the ballpark, potentially in multiple phases, rather than a single, large-scale development.
Industry Outlook and Future Prospects
Kim’s optimism extends beyond Bally’s specific projects to the broader casino gaming industry. During Bally’s second-quarter earnings call, executives from Gaming & Leisure Properties Inc. expressed confidence in both Bally’s and the Oakland A’s projects, indicating that development timelines are proceeding as planned. Kim echoed this positive sentiment, asserting that Bally’s future, and the overall industry outlook, remain bright. “Our messaging has been consistent. We haven’t really veered off our message,” he stated. “We continue to believe that our future’s bright, the future for the industry is bright, and we’re excited for tomorrow.”
Kim’s assertive stance and strategic investments underscore his strong belief in Bally’s growth potential and the broader casino gaming industry. His vision for Bally’s reflects a commitment to leveraging market opportunities and overcoming challenges, positioning the company for success in a competitive and evolving industry landscape.