Bally

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This article is about the Bally company, a manufacturer of slot machines and pinball machines. For other uses, see Bally (disambiguation).

Bally (with its distinctive Rolling Ball logo)

Bally Technologies, Inc. (originally the Bally Manufacturing Corporation) is an American corporation. The company has existed for more than 70 years with a complex history of re-organizations, mergers, and divestitures; it had roots as an early and successful maker of pinball games and slot machines, and was later associated with both the health club and gambling industries.

[edit] History

The Bally Manufacturing Corporation was founded by Raymond Moloney on January 10, 1932 when Bally's original parent company, Lion Manufacturing, established the company to make pinball games. The company took its name from its first, highly successful, game, dubbed Ballyhoo. The company, based in Chicago, quickly became a leading maker of the popular games.

In the late 1930s, Moloney decided to begin making gambling equipment, and had great success developing and improving the modern mechanical slot machines that formed the backbone of the nascent gaming industry.

After a wartime foray into manufacturing munitions and airplane parts, Bally Manufacturing continued to produce innovations in both pinball and slot machines through the late 1950s, and also designed and manufactured vending machines and established a coffee vending service. Ray Moloney died in 1958 and the company foundered briefly; amid the financial failure of parent company Lions Manufacturing, Bally was bought out by a group of investors in 1963. Through the 1960s Bally continued to dominate the slot machine industry, cornering over 90% of the worldwide market for the machines by the end of the decade.

In the late 1960s, Bally became a publicly-traded company and went on an acquisition spree, buying several companies including a German game company and Midway Manufacturing, an amusement game company from Illinois who made coin-operated electromechanical devices such as puck bowling games. In the 1970s and early 1980s Midway would become a primary source of income for Bally as it became an early arcade video game maker and obtained the licenses for two of the most popular videogames of all time, Space Invaders and Pac-Man.

In the late 1970s, Bally made an unsuccessful attempt at getting into the casino business as New Jersey legalized gambling in Atlantic City; this effort was thwarted when the company was unable to attain a permanent license for the completed casino. During this period, company head William O'Donnell was forced to resign due to alleged links to organized crime.[1]

Also in the late 1970s, Bally made an entry into the growing market for home computer games. The Bally Astrocade, as the machine was called, had some very advanced features for the time. These included a palette of 256 colors and the ability to play 4-voice music. The machine also shipped with a cartridge that allowed users to do a limited amount of programming on the machine themselves (using the BASIC language), and record their creations on cassette tape. Unfortunately, the machine's price point was higher than that of the Atari 2600 (its major competition), and it had a much more limited set of available games. Despite a loyal following, it failed to compete successfully.

By the mid-1980s, the company again was flush with cash and management envisioned re-defining the manufacturing business as a far-flung leisure industry giant. The company began buying other businesses including the Six Flags amusement park chain and the Health and Tennis Corporation of America.

The company also tried to enter the restaurant business with a hybrid restaurant/arcade called TomFoolery, a predecessor to places like Dave and Buster's. These acquisitions were actually an attempt to take on more debt to resist hostile takeover bids from the Goldberg Group, KKR, and other notable corporate raiders.

The company also was finally successful in purchasing several casinos, including the MGM Grand Hotel and Casino in Las Vegas (which was subsequently rebranded as Bally's Las Vegas) and the Golden Nugget Atlantic City. This buying spree quickly took its toll on the company finances, however, and Bally was soon forced to sell off several divisions, including Six Flags and Bally-Midway. The pinball division, along with Midway, was acquired by Williams Electronics in 1988. The Aladdin's Castle chain of game arcades was sold to Namco in 1993, and was renamed Namco Cybertainment, Inc.

Between 1990 and 1992 the profitable company was raided by financial group led by the late Arthur Goldberg (A former partner of George Bush Sr. when he was director of the CIA and partner of Bin Laden family of Kingdom of Saudi Arabia) for the purpose of a "slash and burn" sell off of the company assets that were obviously worth more than the price of the stock. Also note that Bally had been fighting off takeover bids from other corporate raiders for ten years prior, taking on debt to make the company less attractive to take-over pirates. Goldberg's group attempted to raid other US corporations that had more value in assets than their stock represented, sometimes successful for his group, but always leading to destruction of the former company. This is how the Enron scam began, following the Goldberg Blueprint. The company's position was finally weakend by the settlement from the fire at Bally's Casino in Las Vegas, the former MGM Grand, which allowed Goldberg's group to take full control of the company in 1992. The corporate raiders re-christened the company Bally Entertainment Corporation and focused on the health club business to milk the positive cash flow from this division, and spun off the manufacturing-related parts of the company as a separate division for resale. By 1993 the manufacturing division, the leader in fitness equipment including the Life Fitness Brand i.e. Life Cycle, Life Step, Life Rower machines. Bally Gaming International had merged with Alliance Gaming becoming a subsidiary of Alliance, had been completely divested from the parent company (licensing back the Bally name). Bally Gaming International had three divisions, Bally Gaming (slot manufacturing), Bally Systems (slot accounting and management) and Bally Wulff (wall machines).

The health-club divisions of the company would go by the name Bally Health and Tennis Corporation of America or formerly HTCA or Health and Tennis Corporation of America and later Bally Total Fitness. The President and CEO of HTCA, Donahue Wildman would stay on as president of the division.

HTCA, the largest health and fitness chain with more than 300 clubs in the US also acquired two health clubs in London to serve as a hub for future plans for expansion into Europe. Other notable clubs were the Vertical Club and New York Health Club located in New York City. HTCA has become the global giant in the health fitness club industry, an industry at the time reported to be worth 5 Billion dollars a year. When HTCA was acquired by Bally they already absorbed the largest health club chains in the US including, Chicago Health Clubs, Scandinavian Health Clubs, Holiday Health Spa, Jack Lalane Health and Fitness, Pacific West, and any other large chain they could add to their network. All memberships that had been sold in the previously mentioned centers could now use their membership cards to avail of services at any of Bally’s Health and Fitness Clubs, as they were eventually called. Some clubs still retained suffixes in their name where services were available such as Bally’s Health and Racquet Clubs. In some cases like the Scandinavian Health Clubs in South Florida retain their original name with only a small “Bally’s” affixed to their former logo.

The health club division became extremely successful with the fitness trend of the 1980’s and 1990’s. Memberships were generally set up with a large initiation fee to join followed by lower annual dues for the lifetime of the membership. Limited one year memberships were available on a limited basis.

Bally’s Fitness eventually ran into some trouble with many complaints of high pressure sales tactics in some of the clubs where financing of the initiation fee was common. In the 1980’s the initiation fee could be financed up to 24 months, but by 1990 36 month contracts were common. The average monthly payment was about $30.00 per month financed at an average APR of 18%. The health division actually owned all of their separately incorporated finance companies. Some of the collections methods used by these sub entity finance companies drew quick complaints in every state that the clubs operated in.

In order to correct this public relation nightmare a nationwide report was sent out to all the clubs under corporation to clean up their sales activities. By 1990 the clubs were operating again at 30% cash with the 70% percent in finance. This was a vast improvement from the year before at only 15% cash and 85% deferred to the finance entities. The public image immediately improves.

In the late 1980’s Bally also began their Corporate Program. This was a plan to sell fitness memberships directly to corporations to promote wellness among employees. Virtually every major corporation in the United States enrolled in this program, which offered discounts to employees of up to 30%. This was another cash windfall for the Health and Fitness divisions, which also attracted the eyes of corporate raiders like that of the Goldberg Group who eventually took control of the Bally parent in 1992, something his group began in 1990.

The result of the Goldberg takeover on the health and fitness division was catastrophic. Over half of the corporate partnerships were dissolved within 12 month of the takeover. With in 24 month 85% of the newly created corporate marker was lost to neglect, as the Goldberg group eliminated the corporate workers. The program officially still existed without anyone to maintain it. It was clear that Goldberg’s Raiders were only interested in taking as much cash out of the divisions as quickly as possible. By 1994 fitness memberships sales were down 60%. Due to a short term strategy of offering up 80% off the initiation fees if the client could pay $200.00 to $400.00. There was nothing left in a maintenance budget so many of the once pristine clubs were in disrepair. The famous Vertical Club and New York Health Clubs were sold in the 1992 gutting of the companies as were the expansion London clubs.

Today the Bally’s Total Fitness is trying to rebuild after the Goldberg Disaster. With still more than 200 corporately owned clubs this is the largest solely owned and operated chain. Memberships are currently selling at an average of $300.00 per year. The glory days of the fitness clubs have clearly passed though. Instead of large free standing building clubs are located in strip malls, are much smaller, and only offer a barebones selection of services. It still remains to be seen if Bally’s Total Fitness, formerly HTCA, will ever be able to regain their edge in the industry.

(edited 9/1/2006 for clarity concerning the HTCA division and other spelling errors.)

Many casinos worldwide would take on the Bally name in the maze of ownership and licensing agreements typical of that business. Midway would continue to use the Bally name for its pinball games, until WMS Industries (the parent company of Williams) ceased pinball production in 1999. By this time the corporate American Giant had been reduced to a former shell of itself as Goldberg's group slashed employee benefits, raided pensions funds, and ignored promises made to employees, resulting in a series of EEOC violations for refusing to honor benefits promised by the company prior to his corporate raid, in an attempt to avoid paying Unemployment Compensation by only eliminating positions, but never actually firing or laying off a single employee though and estimated 50,000 jobs were slashed. These jobs were simply erased, however most states prevented this plan by over-ruling Goldberg's tactics and UC benefits were eventually paid to most employees who were phased out during the takeover. Also note that by 1995 Goldberg's group had raped the Health and Fitness clubs of nearly half of their value by neglecting the maintenance of the health clubs simply by eliminating that part of the budget. The result in the health clubs was an average membership price of $1000.00 at the time of the takeover to less than $300.00 for the same imitation fee in less than 3 years. This was a short term plan to raise as much cash in a short period of time to be pocketed by Goldberg's Raiders. This was part of the corporate "slash and burn" tactic common in the 1980's and 1990's in Corporate America, commonly known as the "hostile takeover". Oliver Stone's award winning film "Wallstreet" was partially based on Arthur Goldberg's investment company, sometimes called "Goldberg's Raiders". Another Film called "Barbarians at the Gate" was based on the novel of the same name, featured the KKR Group who as part of the plot illustrated the process of a hostile takeover of the RJR Nabisco company. The most recent case of hostile takeovers using "fuzzy accounting" was the Enron Group of companies that folded leaving millions of stockholders with nothing for the investment while all pension accounts were converted into the worthless stock in the largest white collar Ponzi Scheme in US history.

In 1995 Bally Entertainment Corporation was purchased by Hilton Hotels Corporation, later the casino resorts division of Hilton Hotels became Park Place Entertainment.

On March 31, 2005, WMS Industries struck a deal with Australian company The Pinball Factory to give them a license for the intellectual properties and the rights to re-manufacture former Bally/Williams games in the field of mechanical pinball. In addition, The Pinball Factory also has bought the right to manufacture new games using his company's new hardware system under the Bally brand.

On March 6, 2006, the company announced that its shareholders approved a name change to Bally Technologies, Inc. Company shares will begin trading on the New York Stock Exchange under the ticker symbol BYI as early as March 13, 2006.

[edit] Notable pinballs using the Bally brand

[edit] Distributed by Bally

• Ballyhoo (flipperless) (1932)
• Ballyhoo (flippers) (1947)
• Boomerang (1974)
• Capersville (1967)
• Captain Fantastic and The Brown Dirt Cowboy (1976)
• Dogies (1968)
• Eight Ball (1977)
• Evel Knievel (1977)
• Fireball (1972)
• Fireball II (1977)
• Four Million B.C. (1971)
• KISS (1979)
• Mr. and Mrs. Pac-Man (1982)
• Playboy (1978)
• Sky Divers (1964)
• The Six Million Dollar Man (1978)
• Wizard! (1975)
• Xenon (1980; features music and voices by electronic music composer Suzanne Ciani)
• Nip-It (1972) features ball grabbing feature called balligtor. Used on TV show Happy Days

[edit] Distributed by Midway

• The Addams Family (1992; based on the 1992 movie, it would go on to become the best-selling pinball of all time)
• The Twilight Zone (1993)

[edit] Distributed by The Pinball Factory

• The Crocodile Hunter Outback Adventure (in development, for possible release in 2006)

[edit] Notable slot machines

• Money Honey (1964)
• Blazing 7s (1993)
• Playboy (2002)

[edit] External links

• Bally Technologies, Inc. Official website
• Bally Total Fitness Official website
• Caesars Entertainment Group Parent company of Bally's hotels
• The Pinball Factory Current licensors to the Williams/Bally pinball games
• Internet Pinball Database
• Bally slot machines