Bally’s Selling Gamesys for $3.17B, Notches Profit on Digital Unit

• Bally’s offloading interactive gaming unit about four years after acquiring it
• Greek lottery giant Intralot is the buyer and is paying for the deal in cash and equity

Greek gaming company Intralot announced a cash and stock acquisition of Bally’s international interactive unit, previously known as Gamesys, that tags the target with an enterprise value of $3.17 billion.

The buyer is paying Bally’s $1.79 billion with the remainder of the purchase price funded by Intralot shares, which trade in Athens. At $3.17 billion, the seller is turning a profit relative to the $2.7 billion it paid for Gamesys in March 2021 in what was one of Bally’s largest acquisitions to date. The deal for the interactive unit results in Bally’s becoming a large owner of Intralot stock.

Intralot has also today received notice that Bally’s and its affiliates’ ownership in Intralot has increased from 26.86% to 33.34%, following which a mandatory tender offer obligation for the remaining outstanding shares of Intralot has been triggered,” according to a statement.

The Greek company said it expects the transaction to close in the fourth quarter.

Gamesys Sale Could Be Smart Financing Move by Bally’s

Offloading its interactive arm could be an arguably necessary though smart move by Bally’s because the regional casino operator has a lot of irons in its respective fire – all of which require significant amounts of capital to advance.

“In connection with the Transaction, Bally’s has secured commitments for a $500mn secured debt facility which, together with the cash proceeds from the Transaction, will be used to repay secured debt,” according to the press release. “In addition, Bally’s has secured commitments for a $100mn delayed draw secured debt facility, which may be used following the consummation of the Transaction for general corporate purposes, including the development of Bally’s Chicago.”

For Bally’s, selling an existing business to raise cash was likely preferable to going to debt markets to generate capital because the operator’s credit ratings reside deep into junk territory, meaning it would have faced elevated financing costs. The seller is also ridding itself of a business that faced regulatory headwinds in some markets outside the US.

Other Details of Bally’s/Intralot Deal

Bally’s CEO Robeson Reeves will take that role at the new version of Intralot while joining that company’s board of directors. Nikolaos Nikolakopoulos, Intralot’s current chief executive officer, will take that title and the presidency of the operator’s lottery division. Soo Kim, chairman of Bally’s board and the founder of the hedge fund that owns the casino operator, is also expected to join the Intralot board.

The Greek company sees the deal enhancing its iGaming and lottery profiles, better positioning it in segments that have an estimated total addressable market (TAM) of $187 billion on a combined basis. Intralot forecast iGaming and lottery will sport compound annual growth rates of 14% and 5%, respectively, through 2029.

“Intralot’s historical resilient contracted B2B lottery revenue and renewal track record combined with the International Interactive Business’s strong B2C iGaming market position, as a leading online casino operator in the UK favorably position Intralot, following the Transaction, to benefit from this strong forecasted market growth,” concluded the company in the statement.