Good morning. Welcome to this Bally's Corporation Investor Call. After the prepared remarks, there will be a question-and-answer session. In order to ask a question, please press the star key followed by the number one on your touch-tone phone. I would now like to turn the call over to George Papanier, President and Chief Executive Officer of Bally's. Please go ahead.
Well, thank you, operator. Good morning, everyone, and thank you for joining us on today's call. We're delighted to take this time to provide some additional color on today's announcements, and we appreciate you joining us. On the line with me today is Sinclair Broadcast Group's President and Chief Executive Officer, Chris Ripley, Bet.Works Founder and Chief Executive Officer, David Wang, and Bally's Executive VP and General Counsel, Craig Eaton. As a reminder, we have posted to the investor relations section of our website the deck that we will refer to on this call, and the press releases outlining the announcements. I'll turn it over to Craig to briefly discuss forward-looking statements before we get started. Craig?
Thanks, George. Before we begin, we would like to remind everyone that comments made by the management teams today will contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that involve significant risks and uncertainties. These risks are discussed in the company's press releases and SEC filings. During today's call, the management teams will refer to certain non-GAAP financial measures. Reconciliations for the most comparable GAAP financial measures are included in the schedules contained in our presentation. I'll now turn it back over to you, George.
Thanks, Craig. With that, let's start with slide four. Today is a truly pivotal moment for the evolution of our company, as we have made two exciting announcements that together, we believe, will revolutionize the U.S. gaming and media industries. On Bet.Works, we are pleased to announce that we have entered into an agreement to acquire 100% ownership of Bet.Works Corp for $125 million, subject to customary adjustments. Half of the purchase price will be paid in Bally's common stock, which Bet.Works shareholders have agreed to hold for at least one year. Bet.Works is a premier U.S.-regulated sportsbook technology platform provider to operators in New Jersey, Iowa, Indiana, and Colorado. Its proprietary tech stack, in turn, these solutions, including marketing, operations, customer service, risk management, and compliance. Bet.Works technology is GLI 19 and GLI 33 certified and uniquely positioned for the regulated U.S. market.
In addition, Bet.Works' proven expertise as a B2B provider of player account management and sports betting technology will transform Bally's into the premier full-service, vertically integrated sports betting and iGaming company in the United States with a B2B2C business model. Our B2B2C model will enable us to develop new and unique products, improving our offering to consumers, execute on new innovative solutions, and most importantly, provide the necessary liquidity required to deliver engaging offerings to our player base. The acquisition also provides us with a suite of advanced omni-channel products, platforms, software, and content solutions to advance our sports betting and iGaming capabilities. Moreover, Bet.Works' veteran trading and risk services cover every corner of the sports betting world, maximizing margin and profitability.
Owning Bet.Works' superior technology platform will give Bally's a long-term margin advantage online and allow us to adapt our innovative product suite to go where sports betting and iGaming customers are headed quickly. Specifically, we expect to receive a margin advantage of approximately 2 percentage points-4 percentage points for owning Bet.Works player account management technology and approximately 8 percentage points-12 percentage points for owning its sports and gaming engine. The acquisition is subject to regulatory approval. We expect it to close in the first quarter of 2021. Importantly, Bet.Works Founder and CEO, David Wang, along with his team of 130 employees, including 90 engineers, will join Bally's and lead our new interactive division. David and his team have built Bet.Works into a great business. We are very glad to have them on board.
We look forward to working together to bring this technology to our over 14 million active customers, and will experience Bally's Casinos and Bally's Interactive as a unified brand with a single player card and reward systems. I'd like to take this opportunity to formally introduce Bet.Works Founder and CEO, David Wang, who will provide some additional color. David?
Thank you, George. Hello, everyone. First and foremost, I am thrilled to be joining the Bally's team. Bet.Works had a number of opportunities in terms of combining with gaming entertainment companies, but Bally's was by far the best fit. Bally's tremendous brand, strong balance sheet, portfolio of successful casino operations, and significant market access across the country were extremely appealing to us. In addition, Bally's exceptional regulatory expertise, large database of 14 million customers, and recently added strategic partnership with Sinclair, which will provide access to approximately 70% of the total U.S. households, will allow us to challenge major operators in this space. I'm also excited to create new and innovative sports betting products for Bally's and apply Bet.Works' proven expertise as a B2B provider of player account management and sports betting technology to Bally's B2C arena.
Finally, I look forward to driving Bally's Interactive's growth and expansion in the fast-growing U.S. sports betting and iGaming market. Bally's Interactive offerings and our associated properties will help shape how sports entertainment is defined for years to come and ensure we maintain a leading position in the B2B sector. George, back over to you.
Thank you, David. We could not be more pleased to welcome you and the entire Bet.Works team to the Bally's family. Welcome again. Building on David's comments, we're also thrilled to announce that we have entered into agreements for a long-term strategic partnership with Sinclair Broadcast Group that will combine national leaders in sports broadcasting, omni-channel gaming. Sinclair is, of course, a diversified media company that owns a leading portfolio of regional and national sports rights and assets. As a result of this partnership, Sinclair will provide superior regional and national integration and content creation opportunities for Bally's across its linear and digital assets, enabling us to create an unmatched sports betting experience for millions of customers. Together, we will rebrand Sinclair's 21 Fox RSN brands under the iconic Bally's name.
Under the terms of the agreement, Sinclair will receive penny warrants to acquire 14.9% of Bally's common shares, as well as warrants to purchase up to a total of an additional 10% of Bally's common shares, contingent on the achievement of various performance metrics. Sinclair will also receive options to purchase 5% of Bally's common shares in four tranches, which purchase prices start at $30 per share and escalating to $45 per share, exercisable after four years. Over the 10-year term, Sinclair RSN portfolio will also receive annual naming rights fees and a committed percentage of Bally's Interactive marketing spend. Turning to slide five. We'll now provide an overview of how Bally's corporate structure will evolve as a result of these transformational announcements. We're turning to slide six. As we announced in our press release last night, Bally's Corporation will now have distinct operating divisions, Bally's Casinos and Bally's Interactive.
Bally's Casinos will comprise our physical casinos and land-based operations, while Bally's Interactive will include new and existing contracts for sports betting and iGaming, including all of Bet.Works' sports betting operations. This revised structure will better position us to pursue lucrative opportunities in new and attractive markets in the fast-growing U.S. sports betting and iGaming industry. Let's turn to slide seven. Over the past few years, we've engaged in strategic and opportunistic expansion of our gaming and entertainment operations, even amid the COVID-19 pandemic. With the recent closing of Bally's Atlantic City, our physical property portfolio now includes 10 casinos across six states. When all pending transactions are completed, our geographic reach will expand to 14 casinos across 10 states, with additional states expected to come.
We will also have live sporting betting operations in six states, which currently account for approximately 80% of the total U.S. sports betting revenues, with a strong database that will include approximately 14 million customers. Clearly, we are a proven buyer with sellers, given our ability to close during the most difficult times. We've been able to acquire and integrate casinos because of our strong balance sheet coming into the crisis, a land bank of assets that we have just begun to tap and return to positive free cash flow in Q3 2020. Just the last year, we have expanded into seven additional states, so we have really achieved explosive growth and we are just getting started. Turning to slide eight.
Through these transactions, we will achieve seamless player card integration between land-based and digital play, enabling us to have a 360-degree view of our offerings, thereby enhancing the player experience. Importantly, we will also have the ability to provide advanced bonuses and rewards along with new and unique promotional opportunities. Our omni-channel strategy will allow us to significantly expand our strong player database while capturing all key demographics and enhancing engagement with players across different channels and mediums. Turning to slide nine. Our vision is to become the premier, full-service, vertically integrated omni-channel U.S. gaming company with a B2B2C business that integrates physical casinos and online gaming. In just a few short years, we have evolved from a regional casino operator to what we believe to be an undisputed national leader in gaming and entertainment. These announcements further advance our goals and objectives. Turning to slide 10.
We look forward to the road ahead and are confident that we have all of the ingredients to achieve our vision and deliver significant long-term value for shareholders. First, on our capital. We continue to maintain strong liquidity, a considerable unencumbered real estate portfolio, and a conservative balance sheet with one of the lowest leverage profiles in the gaming industry. Along with historical strong free cash flow generation, the combination has allowed us to be opportunistic in our objectives for growth as an omni-channel provider of brick and mortar and interactive gaming and entertainment to a large and growing customer base. In terms of market access, as I mentioned earlier, we have engaged in strategic and opportunistic expansion of our gaming and entertainment operations. When all pending transactions are completed, our geographic reach will expand to 14 casinos across 10 states, with additional states expected to come.
We remain disciplined in our approach to evaluating M&A. Our player database will have approximately 14 million customers, a strong foundation on which to build our future sports betting and iGaming services. Upon closing the Bet.Works acquisition, we will have an opportunity to participate in all states where we own a property or have market access with our own unique sports betting and iGaming operations, subject to regulations. Bet.Works also has contracts in place to operate in 11 more states subject to regulation. In terms of local access and regulatory acumen, we retain a unique local touch across our operations. In addition, we have deep knowledge of the markets and regulatory landscape across the regions in which we operate. As you know, we recently acquired the iconic Bally's brand, which is synonymous with U.S. gaming and entertainment, and commensurate with the premier properties and amenities in our portfolio.
We will be undertaking a comprehensive national rebranding initiative by which we will unite our high-quality customer offerings and future mobile and online sports betting and iGaming initiatives under the Bally's brand. By acquiring Bet.Works' proprietary tech stack and turnkey solutions, which include marketing, operations, enhancing our competitive positions within the U.S. gaming and entertainment industry. Finally, our partnership with Sinclair will provide us with immediate national brand recognition that will support the development of our player database, which I mentioned will include roughly 14 million customers. The regional structure of Sinclair's networks will also allow us to market, design, and integrate products on a state-by-state basis, and deliver one-of-a-kind online gaming experiences through bespoke offerings tailored to local audiences. Importantly, Sinclair's 21 Fox RSN brands will be rebranded using the Bally's name.
When you combine all of these elements, we feel we have really transformed what was already a highly successful company and created new and significant opportunities for long-term value creation. Turning to slide 11. We believe the market opportunity in U.S. sports betting and iGaming is large and rapidly growing. Through our long-term strategic partnership with Sinclair and the acquisition of Bet.Works, we believe that we are very well positioned to capture a significant share of the fast-growing U.S. sports betting and iGaming market. According to research by the major investment banks, as well as our estimates, the U.S. sports betting and iGaming market is expected to grow to $12 billion by 2025 and reach $50 billion at maturity. I'll now turn it over to Chris to provide some additional color on Sinclair and our partnership.
Thanks, George. Turning to slide 13. Sinclair is a leading and diverse portfolio of media assets across TV stations, Tennis Channel, RSNs, national networks, and streaming assets. Combined, the RSNs and broadcast stations reach 70% of U.S. households. We are one of the largest owners and operators of TV stations covering 88 markets. We have affiliation agreements with all the major networks and a leading news organization with over 2,500 hours of local news content produced each week. We have the largest portfolio of RSNs, 23 RSN brands in total, covering 45 professional sports teams in MLB, NBA, and NHL. We have Tennis Channel, which is a linear and digital network covering all things tennis and tennis lifestyle, with rights to 96% of the live tennis on U.S. television.
We have Stadium, a sports-focused linear and digital network that produces unique original sports studio content and has rights to numerous Division I conferences and secondary professional sports leagues. We also have many digital platforms, including STIRR, our free ad-supported streaming platform that has over 100 channels and a unique locally focused channel, STIRR City. STIRR combines access to local and national news, sports, movies, and entertainment, both on a live and on-demand basis. Turning to slide 14. Our RSNs are the largest portfolio in the U.S., reaching tens of millions of subscribers in 17 of the top 25 DMAs across three networks, including YES, Marquee, and the 21 RSN brands which we plan on rebranding with the Bally's name. Sinclair is the exclusive provider of local sports content to more than half of the U.S. MLB, NBA, and NHL teams.
We have long-term rights with these teams with a weighted average remaining life of 10 years. Sinclair's massive RSN distribution footprint provides viewers with over 4,600 games and 24,000 hours of new content per year. We have significant shelf space across our footprint to air new content that can drive calls to action for Bally's, deliver studio shows focused on sports betting, and instructional videos. Turning to slide 15. Our broadcast portfolio includes 190 TV stations covering 88 DMAs across the U.S. Some of the most popular content including Big Four affiliate coverage to all major professional leagues, college sports, and tentpole events. Many of our stations are award-winning for their quality reporting and are the go-to source of local news and sports with trusted talent, producing over 2,500 hours per week of local news and having the most significant sporting events on television.
Furthermore, they have a significant digital presence with over 100 million average monthly uniques on their sites and mobile apps. Slide 16. Tennis Channel is all things tennis sports and tennis lifestyle through Tennis Channel, tennis.com, Tennis Magazine, TC Plus, and Tennis Channel International. It has comprehensive coverage rights to 119 live tournament events, representing 96% of all live tennis on U.S. television, including the ATP, WTA, ITF, and Grand Slams. There's always a match to watch and bet on. It has a prime audience for sports betting as the fastest growing U.S. cable network among adults 18-49 and 25-54. Sports betting is an integral part of the tennis culture globally, with tennis being the second-most betted on sport in the world. Stadium has 24/7 coverage of breaking news and highlights across all collegiate and professional sports.
It reaches 19 million linear households and 40 million OTT households and is experiencing rapid growth. It has an efficient and award-winning content production capability that will provide exciting opportunities for Bally's to deliver unique sports betting-focused studio shows. Turning to slide 18. George covered some of these points in the beginning, but I will provide a little bit more detail on our partnership. In terms of the commercial arrangement, this is a 10-year term with mutual options to extend. Bally's will integrate content into Sinclair's broadcast stations and sports networks, Tennis Channel, and our digital assets. Furthermore, our Stadium network and programming will also integrate with the Bally name and content. Our RSN portfolio, currently branded as Fox Sports, will be rebranded using the Bally name. Over the 10-year term, Sinclair's RSNs will receive annual naming rights and a committed percentage of Bally's Interactive marketing spend.
As we dig into more detail later in the presentation, Sinclair and Bally's will co-develop apps to create additional monetization opportunities and content offerings. The agreement also provides flexibility for Sinclair to monetize its assets with other gaming operators and for Bally's to grow media with other partners. As George noted upfront, a hallmark of this transaction is strong economic alignment between Sinclair and Bally's. Sinclair will receive penny warrants to acquire 15% of Bally's common shares, as well as warrants to purchase up to an additional 10% of Bally's common shares, contingent on achievement of various performance metrics. Sinclair will also receive options to purchase 5% of Bally's common shares in four tranches with purchase prices starting at $30 per share and escalating to $45 per share exercisable after four years. I'll turn it back to George to cover slide 19.
Good. Thanks, Chris. Let's turn to slide 19. This transformative partnership combines leaders in sports broadcasting and omni-channel gaming to create what we believe is an unmatched sports betting experience for millions of customers. By leveraging the expansive reach of Sinclair's leading portfolio of regional sports networks, stations, Tennis Channel, and other digital assets, we will now be able to reach viewers across national, regional, and local platforms on an unprecedented level. Importantly, we gain the ability to engage directly with local sports fans, the single most desired audience for sports betting. We will also have national integration opportunities across Sinclair's linear and digital assets with the ability to customize marketing programs at all levels. We expect to deliver an enhanced customer experience that will increase viewership and fan engagement, effectively attracting and retaining customers to the Bally's Interactive platform.
Partnership also provides us with immediate national brand recognition that will support the development of our player database, which will also include roughly 14 million customers, delivering significant shareholder value. This partnership is fully aligned both strategically and economically, and Sinclair will own a minority stake in Bally's Corporation as we work together to deliver unrivaled sports betting and iGaming offers on an unprecedented level. I'm going to turn it back to Chris.
Thanks, George. Turning to slide 20. Our national, regional, and local linear and digital platforms will allow Bally's to customize its marketing strategy specific to local fans and preferences or reach the masses. 21 of our regional sports network brands covering over 40 professional sports teams that are currently branded Fox Sports will be rebranded using the Bally's name across all linear and digital properties. In addition to our RSNs, our local broadcast TV station networks, covering almost 40% of the U.S. TV households, will provide Bally's additional opportunities to be integrated into the local sports conversation nationwide. As our integrated partner, Bally's will have access to our national networks and platforms, which include Tennis Channel, Stadium, and STIRR, that complement Bally's local marketing strategy. Focusing on the map, following Bally's acquisition, they will have market access in 10 states, of which six are covered by one of our RSNs.
With the regionalized rollout of sports betting legalization, state-by-state advertising is essential for customization and reaching targeted audiences in sports betting markets. We bring that in spades. Our portfolio of assets do just that. As Bally's continues to execute on their market access strategy, as legalization continues to roll out, we will be able to leverage an increasing amount of our assets as it relates to sports betting for the benefit of Bally's. Slide 21. We believe that gamification of live sports will enhance the fan experience and drive engagement and viewership across Sinclair's linear and digital properties. This gamification experience or real money and will create a virtuous cycle of gaming driving viewership, driving more gaming, and so on and so forth. Survey data confirms that sports bettors watch more sports than non-bettors. They also follow more teams.
Additionally, the demographic with the most interest in gaming is adults ages 18 - 24 and 25 - 34, the most valuable demographic from a media perspective. Across this demographic, a staggering 60% are interested in sports betting. Slide 22. Viewing enhanced content across Sinclair's linear and digital properties, including jointly developed gaming-focused content, will significantly enhance the viewer's experience. With gaming content with their favorite local teams and players, free-to-play games allowing viewers to compete with an opportunity to win unique local prizes in a secondary environment, and the ability to interact with local talent and connect with other local fans across digital and social platforms. Slide 23. We are excited for Bally's to be our exclusive integrated partner across our linear and digital sports properties in markets where they operate.
We believe by integrating odds and other sports betting content and insights into our programming across the local TV stations, Tennis Channel, and the RSNs, and by providing innovative ways for our audience to interact with our talent, we will enhance the viewer experience. A key initiative we are working on is our new sports app that is intended to give viewers a more dynamic and personalized viewing experience. As part of the naming rights, Bally's will be branded across our new app we plan to launch in the spring. The increased functionality of the app will allow for greater interactivity and a superior viewing experience. Additionally, we're very excited to work with Bally's and leverage the technology of Bet.Works to deliver a more gamified experience and sports betting activities for viewers in a best-in-class mobile and digital environment. Slide 24.
The combination of the assets and capabilities that Sinclair and Bally's are bringing to the table will create an unmatched consumer experience and will efficiently attract and retain customers to the Bally Bet platform. We think this partnership is a big win for local sports fans and will drive audience and audience engagement. Wagering increases time spent on linear and digital platforms. In a recent study, approximately 50% of RSN subscribers noted that they are much more likely to watch games if betting is allowed. Action on the game, either free to play or real money wagering, will drive tune in. Our integrations do not exclude the teams and leagues from striking their own marketing deals. There is plenty of room in the category for various deals with different parties.
With Bally's land-based footprint and ability to successfully execute accretive acquisitions, Bally's has been able to secure select market access partnerships with other major online gaming operators. Bally's is supportive of us engaging with such partners on other marketing opportunities on our assets. The partnership will integrate Bally's into the local sports conversation, which will drive efficient customer acquisition and retention while enhancing the overall viewing experience for our users. Now I'll pass it back to George to close.
Thanks again, Chris. Let's turn to slide 25. Now, I thought it would take a moment to recap highlights of the Bet.Works and Sinclair agreements. Through these transactions, we believe Bally's will become the premier full-service, vertically integrated sports betting and iGaming company with B2B2C business, enabling us to capitalize on lucrative opportunities in the fast-growing U.S. sports betting and iGaming industry. Bet.Works and its proprietary tech stack and turnkey solutions will provide us with a suite of advanced omni-channel products, platforms, software, and content. Through our partnership with Sinclair, we will have the ability to reach and engage directly with local sports fans, the single most desired audience for sports betting. As we have said, we are strategically and economically aligned with Sinclair, as they will receive a minority stake in Bally's Corporation.
We look forward to partnering with Sinclair to create unrivaled sports gamification content on a national scale. Today's announcements represent the latest step in our long-term growth, development, and unification strategy, and advance our recent accomplishments by positioning us to deliver significant long-term value creation for our shareholders. We hope to get out on the road, virtually of course, over the next couple of months and provide further updates. We will now open up the call for any questions. Thank you, and thank you for your time.
At this time-
Operator?
If you would like to ask a question, please press star then the number one on your telephone keypad. Again, to ask a question, please press star one. We will pause for just a moment to compile the queue of the roster. Your first question is from the line of Barry Jonas with Truist Securities.
Good morning, congratulations, guys. I'd like to start with getting a sense what sort of market share expectations or maybe aspirations do you have now as you think about the sports betting and iGaming opportunity? Thanks.
Sure. This is George. We developed a range of expectations for sports betting and iGaming, but I think safely, we could take an average of 10% of market share.
Great. George, how are you thinking about customer acquisition cost strategies? I guess more directly, how much losses will you be willing to tolerate for Bally's Interactive?
Let me start by saying, as a result of having 14 million physical customers in our database as a result of our regional portfolio of assets, we believe that our customer acquisition cost is going to be less than some of our competitors. We think there's just going to be certainly some margin improvement as a result of that. I could tell you the range where we believe those acquisition costs will be. We think we'll be in the less for conversion of our physical customers, but we'll probably wind up being in the about $300 range per customer.
Great. Just in terms of overall losses or any expectations, how long the path profitability could be?
We're obviously requiring a tech stack provider that's already been providing to a few states. They're relatively self-contained, as far as profitability. We're just going to be adding to their opportunity to expand into our markets where we're going to be able to provide access to those markets. They'll be continuing to focus on their B2B, but also on the B2C as it relates to the access to new markets that we're currently in.
Okay, great. Just last one. Sorry, go ahead.
Sorry, this is Chris. I just wanted to point out one of the reasons that we found Bally's such an attractive partner, is they produce significant free cash flow on an annualized basis, which could be used to fund this interactive opportunity. We'd expect very little dilution going forward as this platform gets built out.
Great. Then I guess the last for me, does Sinclair plan to pursue gaming licensing now or down the road?
No, that's not in the cards for Sinclair. This is a passive for us, and we're counting on Bally's to be our license partner.
Thank you.
Your next question is from the line of John Janedis with Wolfe Research.
Thank you. Good morning. Two for Chris. Chris, first, with this transaction touching all of your properties, how did the economics flow between the Stations and Diamond? Separately, you're in carriage negotiations with a couple of distributors for Star. On a practical level, do you think this transaction has any impact on those discussions?
Okay, yeah. There are streams of payments going to the RSNs. As I noted, the naming rights fee and also a very significant marketing commitment, which will go against the RSNs. The equity that I mentioned, is the compensation for the overall deal and the other properties that are involved in the transaction. In terms of our pending negotiations around distribution, I think this absolutely will be a factor. As I mentioned, it's a proven phenomenon, not only from research, but also markets overseas that have legalized that gaming, in particular, real money sports betting, creates a virtuous circle of viewership. More gaming creates more viewership, creates more gaming, which creates more viewership. This is going to be a huge mega trend in sports washing through and ultimately making sports and sports rights more valuable.
Thank you.
Your next question is from the line of Daniel Kurnos with The Benchmark Company.
Great. Thanks. Good morning. You guys talked about sort of co-production here. Is there any more color you guys can provide us on sort of investment from both parties around either content and/or app development, sort of quantity of apps or where we might find those falling?
We already have a significant amount of content and studio shows. We'll just now be integrating Bally's. We're already creating a brand new state-of-the-art digital platform, which is due to launch in the spring, which will house our direct consumer offering that you referenced. Now we'll roll in Bally's, and we'll roll in more features focused on sports betting and sports betting information. We don't expect a significant incremental cost here, and it really just leverages everything that we're already using day -to -day.
If I could follow up on the advertising piece, because I think there's a little bit confusion out there, in terms of the interactive spend. Is there any inventory either being given at the broadcast level and/or the RSN at either a discounted rate, or is there any incremental inventory freed up? Is it all just integration around ancillary programming, new programming you might create, and Bally is spending incremental advertising dollars at the RSN level to promote the entire product?
Yeah. There is no advertising given away, per your question. Bally's will be integrated into pre-game, game, and post-game content, and then has committed to spend and to buy additional advertising through those time periods to create the calls to action. It's all incremental from our perspective.
All right. Perfect. Thanks very much, and congratulations, guys.
Thank you.
Your next question is on the line with John DeCree with Union Gaming.
Good morning, everyone, congratulations again on assembling this partnership here. I have one question related to slide 18, perhaps for Chris and George, maybe separately. I think the second to last bullet talked about the flexibility of each partner to either, I think, monetize some of your assets, Chris, or Bally's, George, to use some other media partners. Maybe Chris, if you could talk about what that might entail, anecdotally, what that might look like, and George, the same for you, how you could use other media partners potentially.
Look, I think the spirit of this transaction is that we are picking each other as our primary and preferred partner. Bally's to us for sports betting and then vice versa for media. There's a recognition that this is a big space. Bally's won't be able to buy all of our ad inventory. There are no restrictions on us doing sales and partnerships with other sports betting partners. For Bally's, we're not in every single market, though we're in most markets. Bally's can certainly do other media partnerships as well.
John, Chris touched on what I was going to say, is currently, once our pending transactions are completed, we'll have 14 casinos in 10 states. Currently, there is some overlap. Obviously in the overlap with Sinclair's RSNs, we'll take advantage of that, which I believe initially will be Mississippi, Missouri, Louisiana, Nevada, Indiana, and Illinois. We're going to continue to focus on expanding into opportunities in states that we're currently not in. They're free to continue to evolve their business as we are.
That's helpful. That clarifies it. Thanks. Got David in here. Pending the timing of a reasonable timeframe would be before we see maybe a Bally branded sports betting app actually be able to get live. Is there a target state or jurisdiction, George, that you'd look to get going in first?
Yeah. I'm not going to speak to the technical aspects, but I could tell you our thought process is Q2. We will be in, let's say, four of the six states, New Jersey, Colorado, Iowa, and Indiana. There's other states that we're working on to participate in. We're going to move very quickly.
Question, please press star, then the number one on your telephone keypad. Again, that is star one. Your next question is- [inaudible]
Thanks. Taking the questions. Chris, maybe a couple. First, I just wanted to be clear on the economics. There's the naming rights and the marketing commitment and the viewership upside. Is there a revenue sharing arrangement as well on the sports betting, or does the equity stake kind of take the place of potential revenue share? Will that stake be held at the TV station level or at the Diamond level of Sinclair? Then also, Chris, I was just wondering if you could speak a little to the agreements with the teams. I think you've always kind of got a rolling basis of team renewals.
Do you think it's going to change the way that they look at the value of the RSNs? The way they look at kind of a cost or a revenue share, as well as how you and the teams might think about the OTT opportunity going forward. Thanks.
You might be on mute, Chris.
Oh, sorry. I was on mute. Thank you. Lots to cover there. This is a system-wide deal that includes all of our sport outlets which are quite significant outside of the RSNs. You are right in your statement that there is no explicit revenue share. We have solved for that part of the equation via the ownership, the significant economic alignment there.
Yep.
The equity will sit at SBG. In terms of your question around how the teams will view it, look, if you ask any of the leagues or you talk to the teams, they're very excited about sports betting because it creates more engagement. At the end of the day, that's what drives value for teams-
Yep.
Are engaged fans. Furthermore, most of the leagues have sports betting authorized partners which get them a direct stake in the handle related to their sports. It's a win-win for everybody.
Great. Thank you.
Your next question is from the line of Jordan Bender with Macquarie.
Morning, thanks for taking my question. Can you talk about the performance metrics for Sinclair to acquire the additional equity, and then any timeframe for those metrics?
Sure. The metrics are around Bally Bet's first time depositors and we have not disclosed a specific number that will be easily achievable with them.
Okay. Towards your omni-channel approach, what percent of those?
We had a conversion rate of about 10%.
All righty. Thanks for the color. Thanks, guys.
Thank you.
Your next question is from the line of Patrick Barrett with Octagon.
Hi, guys. Congratulations. Wanted to ask about the app and curious to know if the end state or a future ambition for the app is to have in-game wagering that is alongside viewing, like on an iPad or on a smart TV. If so, how do the RSN agreements with the teams and the leagues allow for that? I mean, do you have to be in market? Do you have to have a cable subscription? Can you describe how you expect that dynamic might evolve?
Sure. Look, the overall vision, which this is a keystone component of, is to gamify sports. I talk about this a lot, but to say it in as briefly as we can is to make watching sports like playing a video game. We think this will dramatically increase the attractiveness of sports engagement, especially from the younger generation. As I noted, 60% of all 18 -3 4 year-olds are interested in sports betting, and a lot of that's driven by their connection to video games. Ultimately we wanna make that a single screen experience or single screen all visual experience with a second screen used for control. That is the direction we're headed in.
The more people, the more viewers that we can convert from traditional linear viewing over to our new app, or to Bally's app, the faster we can get to that vision. That's where we're headed and getting people onto digital and streaming experiences will help us get there.
At present, does the app have the ability to offer to games right in market? If you're in Cleveland, can you watch the Cleveland Guardians on the app?
Yes. Its first iteration when it launches in the spring will have authenticated streaming for existing subscribers, and then shortly thereafter will start to offer direct consumer experiences for people that are outside of the pay-TV bundle.
Great. Thank you very much.
Your next question is from the line of Alexia Quadrani with JP Morgan.
Hi. Thank you. This is David on for Alexia. Chris, I was wondering if you could just elaborate on that last point. That was going to be my question on how this partnership now changes or accelerates plans to offer the RSN as a DTC offering. Something that I think you were sort of alluding to on your last earnings call.
Yeah. Well, we have a pretty aggressive plan to transform the RSNs through direct consumer, through gamification, and through fandom-based community. This is a very important step in that strategy, and we will be launching direct consumer next year, which I think not only fuels the transformation I just spoke about, but also fuels this partnership.
Okay. Then just maybe as a follow to that, outside of the actual game coverage, can you just speak to how the partnership changes how you plan to program the remaining hours of the day where the live sports aren't on?
Yeah. As I mentioned in the presentation, we have significant shelf space on many of our outlets, the most obvious of which is the RSNs who don't have premium programming outside of the pre, post, and the games. We're targeting that sort of shoulder programming, which isn't heavily viewed as being revamped for programs focused on sports betting, like a talk show getting you ready for the night ahead, and giving you the stats, information, and analytics that you need to get ready for the games that evening.
Okay. Thank you.
Operator?
Your next question is from the line of Michael Kupinski with Noble Capital Markets.
Thank you, and congratulations. My question is more from the standpoint of, does this follow just the traditional sports betting, or does this provide a platform for esports betting as well? Many of these traditional sports teams are kind of doing affiliation agreements with esports, and I was just wondering if this platform allows for growth into that area as well.
Well, I'll let George speak to whether esports is part of the sports betting paradigm. It's certainly a component of our strategy here on the media side. We just invested in a company called Playfly, which has the largest collegiate esports platform in the country. We're always looking for additional content in the esports side to add to our portfolio.
This is David. Let me jump in on this point. The Bet.Works platform currently today offers esports betting. Esports betting, as most know right now, is regulated state by state, so this will be dependent on how states perceive esports going forward in terms of how we roll it out. It is something that we're looking at and we're currently doing.
Great. Thank you.
We have time for one more question. Your final question is from the line of Lance Vitanza with Cowen.
Hi there. Thanks for doing this call this morning. This is Chris Sinnott on for Lance. Chris, if you could just circle back to the comments you made. I appreciate you confirming that the equity in Bally's is going to sit at Sinclair. In terms of the committed marketing spend, are there minimums? Is it a percentage of another number, and is it being directed specifically to Diamond? Will Diamond record those revenues coming through?
Yes, it's a percentage of the spend that Bally's Interactive makes, and it will be directed towards the RSNs and Diamond.
Okay, great. Just if I could get one more on the regulatory process. Do you guys foresee any issues, or can you just talk about what the gating items are, the hurdles in terms of making sure that Sinclair can get a sign-off on owning 5% or 10% or 20% of Bally's, so that all these gaming authorities can kind of tee this up?
George, do you want to speak to that?
Sure. From our gaming perspective, generally, we've received all the necessary regulatory approvals. We're ready to move forward.
Great.
If there's no further questions, I just want to thank everyone for joining us on today's call so that we could provide more detail on what we consider to be transformational announcements. Thank you again. Enjoy your day.
This concludes the Bally's Corporation investor call. Thank you for your participation. You may now disconnect.