Less than four years after acquiring European online gaming giant Gamesys in a $2.7 billion deal, Bally’s is selling its interactive divison to someone else.
Bally’s announced Tuesday that it has entered into an agreement with Intralot to sell off Bally’s International Interactive business.
Deal will make Bally’s major Intralot shareholder
The total value of the deal amounts to just shy of $3.2 billion comprised of a $1.77 billion cash payment and the issuance of $1.34 billion in Intralot stock shares to Bally’s. The roughly 870 million shares have an implied value of $1.53 a share. Jeffries International is working as Bally’s financial adviser for the transaction.
Those new shares, combined with Bally’s existing stake in Intralot will make it the primary shareholder in the Greek gaming company, so while it is no longer the owner of the company directly, it will still have major involvement in the future of the business.
“The transaction we announced today marks a doubly important day: On the one hand, for Intralot, which is growing with the acquisition of the online division of Bally’s International Interactive, creating a company with significant multiples in operating profits and unlimited space to expand into online gaming. On the other hand, for Greece and the Greek stock exchange, where a strong large-cap company is being created with the prospect of attracting significant foreign capital, helping to establish the country as a reliable investment destination,” said Intralot Founder and Chairperson Sokratis Kokkalis.
Bally’s sees this as big step for international gaming aspirations
Bally’s Chairman Soo Kim elaborated on the position that this only cements the company’s global online gambling aspirations.
“This is a tremendous statement of intent that signals Bally’s strong commitment to establishing a global lottery and online gaming champion. By joining with Intralot, the resulting company will be anchored in Europe, and will have significantly greater financial scale from which to drive growth and compete on a global basis.”
Bally’s CEO and Intralot board member Robeson Reeves is expected to take the helm as CEO of Intralot pending the completion of the deal in Q4 of this year. Intralot’s current CEO Nikolaos Nikolakopoulos is set to take on the role of president and oversee the company’s lottery division.
Per the release, the two groups believe the total addressable market for the new venture, taking into account both lottery and online will reach $187 billion by 2029.
Bally’s currently strapped for cash
The deal will provide Bally’s with some much-needed cash for its brick and mortar ventures. Its $1.7 billion casino project in Chicago is fresh off a halt in construction over concerns about a subcontractors ties to organized crime.
In February of this year, Fitch downgraded Bally’s credit rating from B to B-, citing concerns with the Chicago project and a high debt-to-income ratio.
Meanwhile, the company is also one of eight groups mounting an effort to obtain one of three downstate New York casino licenses. The bid Bally’s submitted to state officials includes a $4 billion Bronx casino project.
Bally’s paid $60 million to the Trump Organization for the right to develop a casino on what was Trump Golf Links and is now Bally’s Golf Links at Ferry Point. If the group is selected for a bid, the Trump Organization will receive a $115 million payment from the company instead.
Interactive more than just Bally Bet
The Bally’s International Interactive brand consists of a number of brands, including Jackpotjoy, Monopoly Casino and the international arm of Bally Bet, which is live in Ontario.
The North American Interactive division was not mentioned in the release about the deal. Bally Bet Sportsbook is live in 11 states and Bally Bet Casino is available in New Jersey, Pennsylvania and Rhode Island. Recent Bally’s earnings reports state that North American interactive revenue is on the rise, but the brand still has roughly 1% market share across the U.S.
