Big changes are ahead for International Game Technology (IGT) and Everi Holdings.
Late last week, IGT and Everi announced they entered into definitive agreements. Those dictated that IGT’s gaming and digital business, as well as Everi, will be simultaneously acquired by Apollo Global.
The all-cash transaction was $6.3 billion in value.
This move from IGT will allow it to focus purely on lottery. The company is a major worldwide player in the industry. It is looking to take advantage of the growing number of states with online lotteries within the US.
During IGT’s 2024 Q2 investor call, CEO Vincent Sadusky stressed the importance of IGT’s new outlook:
“Upon the successful completion of the transaction, IGT’s remaining operations will be comprised of its current global lottery business and corporate support functions. This establishes the company as the premier pure-play lottery business with a diversified contract mix, broad global reach, and strong positions in important markets.”
Apollo agreement will overtake original IGT-Everi plans
Back on Feb. 29, IGT and Everi announced that they had reached a deal. That agreement would see IGT Gaming combine with Everi.
Now, Apollo Funds will be acquiring the two. Each will be privately owned companies that are part of a combined enterprise.
Both IGT’s and Everi’s Board of Directors have unanimously approved the transaction.
The acquisitions are projected to be completed by the end of the third quarter of 2025.
Upon completion of the sale of IGT Gaming to Apollo Funds, IGT will change its name and stock ticker symbol on the New York Stock Exchange. This will represent IGT becoming a pure-play lottery business.
Sadusky noted that lottery is an industry that has survived a lot of challenges and is seeing an upswing due to the growth of the online platform:
“Lottery is a large, consistently growing and resilient industry with recession-proof characteristics. It also has significant tailwind from potential iLottery adoption, especially in the US.”
IGT eyeing iLottery expansion throughout US
This latest transaction allows IGT to put its energy and focus into strictly lottery.
For Q2 2024, IGT reported $613 million in revenue from its global lottery business.
Through the first half of the year, revenue is up 2% YoY.
Locally, IGT has recently secured new contracts with the Colorado Lottery, Ohio Lottery, and Mississippi Lottery.
From an iLottery aspect, IGT has been involved in the recent launch of the Connecticut online lottery.
Sadusky is hoping more states in the US will get on board with iLottery expansion:
“It’s unfortunate that states have been slower than we would have hoped to approve iLottery. Nonetheless, the ones who have, the numbers are significant and we’re a significant player…So there’s several opportunities for revenue growth in that, and we’ve seen no decline in play in retail as a result of digital, as well.”
Sadusky also noted that even though iLottery expansion may not be going at the rate he’d like, courier sales in states without an online lottery still provide additional business for IGT:
“It’s been slower than we expected in North America in terms of rollout of the approval, but we think that will pick up over time. Meanwhile, you’ve had the courier services continue to show that the digital activity for their businesses continues to grow. That benefits us when we are the provider of the system in these markets.”
What new possibilities could be available to IGT?
Though growth in the US may be slower than IGT would prefer, Massachusetts just recently approved iLottery for its FY25 budget.
A 16-month process to set up a launch should see the state have an online lottery by the end of 2025.
Sadusky pointed out that iLottery has been an option for states that need stronger budget funding:
“I think as we’ve seen, historically, when states are challenged with their budgets, they certainly look towards gaming and lotteries as a potential opportunity.”
Sadusky also mentioned that sports betting expansion in the US isn’t bringing in the funding some states had hoped, where lottery may be a more reliable option:
“A lot of the focus was on sports betting, right? Sports betting has done fine. In some places, it hasn’t done great in terms of meeting the revenue projections. States are certainly struggling now to fill budget gaps. So, we’re hopeful that that accelerates legislation being brought to the various legislators to be able to pass iLottery in those states.”
Photo by vectorfusionart via Shutterstock
Graphic from IGT
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