Going Private
For much of the history of the modern gaming industry, ownership in the supply sector was relatively stable. Public companies including Bally, IGT, WMS Gaming, Aristocrat, Shuffle Master and others dominated the slot supply landscape at the turn of the 20th century.
That stability would be tested beginning in 2013, when Bally Technologies bought table game utility supplier Shuffle Master—a move that touched off a spate of mergers and acquisitions over the ensuing two years. That same year, lottery supplier Scientific Games acquired slot-maker WMS Gaming. The following year, Scientific Games bought Bally Technologies, forming the nucleus of today’s Light & Wonder.
Those transactions consolidated four public companies into a single entity, still one of the top suppliers in the sector. However, mergers and acquisitions in the sector were not limited to the top companies. That same year, 2014, fintech supplier Global Cash Access acquired slot supplier Multimedia Games, eventually going public as Everi Holdings, which soared toward the top of the slot sector over the remainder of the decade.
Meanwhile, slot supplier American Gaming Systems, majority-owned by private equity firm Apollo Global Management, welcomed new CEO David Lopez late in 2013. Lopez put AGS on a path to an initial public offering, resulting in its listing on the New York Stock Exchange in January 2018.
The whirlwind of M&A activity in the mid-2010s involved public or soon-to-be-public companies. This year, most of the companies involved in those deals have been involved in new blockbuster deals—only this time, resulting in private ownership.
The biggest news, of course, has involved Everi and IGT. The $6.3 billion deal combined the gaming and PlayDigital divisions of IGT with the complete business of Everi, creating a newly christened IGT owned by an affiliate of private equity group Apollo. The new company has already started to launch products combining the technology of the two legacy companies, and Everi’s fintech division has been absorbed by IGT.
Meanwhile, AGS completed its return to private ownership with its acquisition by private equity firm Brightstar Capital. At the same time, a significant private-on-private acquisition was completed when Merkur Group, the slot supplier owned by Germany’s Gauselmann family, bought Las Vegas-based Gaming Arts, LLC, a former bingo supplier that had been growing in the casino slot sector.
These moves were heralded by those involved as creating stronger, more well-funded entities capable of growing their business rapidly. But for the IGT/Everi combination, officials said the merging of powerful technologies was just as important.
“This isn’t a portfolio here and a portfolio there,” Domenico Pastia, IGT’s SVP of global product, told Global Gaming Business. “We’re going to have one approach with customers, and we’re excited where we are today and to see what the future holds.
“Like puzzle pieces, the two are merging really well, and clearly, we are only at the beginning of the journey.”
For AGS, ownership by a private equity firm opens new prospects for expansion. “We’re excited about the partnership with Brightstar,” said Mark DeDeaux, senior vice president and general manager, slots for AGS, in an interview with GGB. “The opportunity for us to continue to accelerate the expansion of our portfolio and the depth of our library of games under this new partnership is something that they recognize as a big opportunity. And we have a great plan in place to be able to execute on that.”
“Through our history of being private and being public, our greatest period of growth happened when we were private,” AGS chief Lopez told GGB.
For Gaming Arts, the resources of Merkur and the Gauselmann Group create growth possibilities the former bingo company could never approach. “I feel like we have some wind in our sails; we’re not fighting uphill anymore,” Gaming Arts Chief Product Officer Greg Colella told GGB. “We had been assessing how to move forward, and now a lot of those pieces are in place. We’re in the beginning phases of establishing a new studio, our performance is appearing on the Eilers reports, and we’re taking more substantial orders than we ever envisioned for Gaming Arts.”
The current M&A surge is not over. Aruze Gaming Global, the company formed when privately held Empire Technology Group bought the slot-related assets of the former Aruze Gaming America, is currently scrambling to complete its licensing, the latest jurisdiction being Nevada. And Novomatic AG, the privately held European gaming giant, is still in efforts to acquire all the remaining shares of publicly held Australian supplier Ainsworth Game Technology.
While companies like Aristocrat, Light & Wonder and Konami, though evolving, will remain public—L&W moving exclusively to the Australian Securities Exchange—private ownership of slot companies remains the trend of the day.
