International Gaming Technology (IGT) announced it will become a pure-play lottery company while spinning off its PlayDigital and Global Gaming divisions. Those online and retail game development operations will merge with another giant of the B2B casino supplier space, Everi Holdings. Both companies are big names in the US. It’s hard to find an American casino—online or retail—that doesn’t feature at least a few slots from each.
The deal will see Everi take on IGT’s name while the latter’s lottery business will find a new moniker. Under the terms of the agreement, IGT shareholders will own 54% of the new gaming supply company, while Everi stockholders will own 46%. The implied valuation of the combined company is $6.2 billion.
Under the terms, Vince Sadusky, IGT CEO, will lead the entity, which will be headquartered in Las Vegas. Meanwhile, Everi’s executive chairman, Michael Rumbolz, will chair the Board of Directors.
The combined companies’ 2024 revenue is estimated at $2.7 billion, with earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) of $1 billion. The new structure will allow the company to save $85 million. Subject to regulatory approvals and shareholder consent, the transaction is expected to close in late 2024 or early 2025.
IGT’s lottery arm has yet to settle on its new name but will remain at the current London headquarters. The segment provides technology to over 50 lotteries worldwide and has partnered with 25 retail lotteries in the US, representing 75% of sales. The yet-unnamed lottery company and the newly merged company will trade publicly, with the latter taking the IGT symbol at the New York Stock Exchange.
Change Follows Period of Strategic Review
The announcement does not come as a surprise. Last summer, IGT revealed that it was conducting a strategic review of the two divisions. At the time, the company considered selling, spinning off, or investing in the PlayDigital and Global Gaming segments.
IGT’s Global Gaming supports land-based casinos worldwide, including sales, operation, technology, and product management.
Meanwhile, the PlayDigital segment offers products and services for retail and online sports betting operators and online casinos. These services include iGaming content, loyalty programs, sports betting solutions, and advanced technology solutions.
IGT’s segment split and merger with Everi resembles a similar move by competitor Scientific Games, which rebranded to Light & Wonder in 2022 and sold its lottery and sports betting divisions.
New Company Merges Leading Game Developers
According to Sadusky, the merger will make the two companies stronger:
The combination results in a comprehensive and diverse product offering, addressing more aspects of the gaming ecosystem across land-based gaming, iGaming, sports betting, and fintech. The creation of separate gaming and lottery companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders.
Many casino players are familiar with IGT slots. The company’s most popular games include Cleopatra, Siberian Storm, Wolf Run, and Lobster Larry Lobstermania. The company also develops the Wheel of Fortune slots, for which it has an exclusive deal for another ten years. Many of these slots are also part of the Mega Jackpots progressive jackpot network, which often awards top prizes of over half a million dollars.
Meanwhile, Everi develops old-school mechanical slots for retail casinos across the US. The company also makes digital adaptations like Cash Machine and Black Diamond. Last year, Everi also added historical horse racing to its product lineup.
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