Thousands of employees were laid off by Fortune 500 companies in 2022 and 2023. There is no surprise that some sportsbook companies are doing the same because cutting back on payroll to maintain revenue has been taken by many companies. Additionally, being involved in the gaming industry makes it difficult to allocate money through various channels.
Bally is Letting Go Up to 15 Percent
The sports betting industry can be ruthless if one company fails to acquire new customers, maintain existing users, and maintain market share in numerous states. BallyBet is one of the companies that will let go of up to 15 percent Of interactive employees.
Letters were sent on Wednesday as CEO Lee Fenton confirmed the news of the mass firing in an SEC filing shortly after the markets closed for the day. During the first quarter, Bally expects severance costs to be between $10 million and $15 million, following its $2.8 billion acquisition of Gamesys.
The CEO believes the company has a resilient business model and will strive to work through these challenging conditions. Many sportsbook and casino companies have lost over 50 percent of their stock value when looking at the year-to-date price differences. The favorable settlement ended there though as the outlook doesn’t seem as optimistic as one would hope.
Fenton stated, “However, we always need to be acutely aware of the macro-economic conditions and adjust accordingly to come through what is a challenging environment in the best possible shape. Companies who take tough but decisive steps to effectively manage costs will be stronger and fitter for the future. I am committed to ensuring that Bally’s is one of those that is best placed to flourish in the long term.
According to the statement, the company will reduce its workforce by 15 percent in the next few weeks. Other sportsbook-based companies like Fubo have exited the sports betting industry after taking massive quarterly losses in 2022.
Profitability Has Been Hard to Come By
Sports betting and online casinos have been the main focus of many companies that are involved in the sports betting and iGaming industry. However gaining market access, and conducting business throughout the United States and North America as a whole comes at a massive cost.
Bally took a significant gamble by big on regional sports networks, but companies that can seek these types of ventures have to wait years before becoming profitable. However, there are too many internal and external factors that can prolong the process if the money and revenue are not allocated appropriately.
For example, BallyBet is live in six states in the United States and has failed to gain an edge against many competitors. Among the most recent reports for Arizona, Indiana, Iowa, New York, and Virginia.
Bally’s market share of sports betting handles is below 1 percent. In addition, Bally Interactive has a partnership with the New York Yankees, but FanDuel may be winning in that regard as the two companies have similar partnerships with the iconic franchise. The stock price continues to fail, and the sportsbook unit is failing to put up a fight in not only New York but also in other jurisdictions as well.