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

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

Bally's international interactive division, formerly known as Gamesys, will be acquired by Greek gaming business Intralot in cash and equity for an enterprise value of $3.17 billion.

Bally's $1.79 billion is being paid by the buyer, with Intralot shares, which are traded in Athens, covering the remaining purchase price.  In comparison to the $2.7 billion it paid for Gamesys in March 2021—one of Bally's biggest acquisitions to date—the seller is making money at $3.17 billion.  Bally's acquires a significant amount of Intralot stock as a result of the agreement for the interactive segment.

"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.

According to the Greek business, the deal should finalize in the fourth quarter.

Bally's Could Make a Wise Financial Decision by Selling Gamesys

Bally's may have to sell off its interactive division, but it was a wise decision given that the regional casino operator has several other projects in the works, all of which need substantial financial resources to develop.

These include its $1.7 billion casino project in Chicago, its $4 billion proposal to construct a casino hotel in the Bronx, New York, and its pending acquisition of Star Entertainment in Australia, as well as the as-yet-undetermined bids for the operating rights at the location of the Tropicana on the Las Vegas Strip.  To put it another way, Bally's requires access to funding, which the interactive sale offers.

“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.”

Because Bally's operator's credit ratings fall far into junk territory, which would have resulted in high financing costs, selling an existing firm to obtain money was probably a better option than turning to the debt markets to raise capital.  Additionally, the seller is getting rid of a company that encountered regulatory challenges in certain non-US markets. 

Additional Information Regarding Bally's/Intralot Deal

Robeson Reeves, the CEO of Bally, will join the board of directors of the new Intralot and assume that position.  The current CEO of Intralot, Nikolaos Nikolakopoulos, will assume that role and lead the operator's lottery section.  It is also anticipated that Soo Kim, the founder of the hedge firm that owns the casino operator and the chairman of Bally's board, will join the Intralot board.

According to the Greek company, the deal will improve its iGaming and lottery profiles, better placing it in markets with a combined projected total addressable market (TAM) of $187 billion.  According to Intralot, until 2029, iGaming and the lottery will increase at compound annual growth rates of 14% and 5%, respectively.

“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.