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Second big RI gambling shakeup: Part of IGT bought for $4B

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Second big RI gambling shakeup: Part of IGT bought for B

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PROVIDENCE – Apollo Global Management is buying the digital and gaming divisions of International Game Technology, or IGT, the company that effectively runs the Rhode Island Lottery – including its video game and sports betting operations from behind the scenes – in a $4-billion all cash deal announced Friday.

“The operations we have in Rhode Island will be largely undisturbed,” Robert Vincent, chairman of IGT Global Solutions, told The Journal on Friday. He also repeated what he said in February after the first piece in the merger-acquisition puzzle fell into place:

“Rhode Island will continue as the operational headquarters of the lottery business albeit under a new name that has yet to be determined.”

What to know: How long will the deal take and what’s happening

Vincent said the deal could take about 12 months to complete.

State Lottery spokesman Mark Furcolo said aspects of the new ownership arrangement will require local regulatory approval, but he too anticipated “no impact on operations [or] contractual commitments” made to the state in exchange for a new 20-year extension of IGT’s Lottery contract.

To help pave the way for that deal three years ago, IGT joined forces with former rival Bally’s in an arrangement that allows Bally’s to control 23% of the slot machines at its state-run casinos in Lincoln and Tiverton.

The acquisition by Apollo follows the February announcement that the United Kingdom-based IGT, which began life in Rhode Island as GTECH, would merge with the Las Vegas-based Everi, which leases and sells gaming equipment and gaming systems.

“What was announced today is an evolution of the deal that had been announced previously, which was a merger/ spinoff with Everi,” Vincent explained.

Essentially, Vincent said, IGT was spinning off its gaming and digital business, with IGT shareholders in line to get shares of the merged company with Everi. Now, he explained, Apollo has come in, agreed to acquire that company and take it private.

IGT’s publicly-traded, worldwide lottery business is what remains, Vincent said, and will stay headquartered in Rhode Island. IGT’s other contracts, like its sports-betting contract, will go to the new Las Vegas-based company. IGT currently has between 1,000 and 1,100 employees in Rhode Island.

As part of this deal, IGT will change its name and stock ticker symbol and become a “premier pure play lottery business,” the company said.

IGT Chief Executive Vince Sadusky will lead the combined company, according to the official announcement.

What does this mean for shareholders?

Under the terms of the $6.3 billion worth of new agreements, shareholders in Everi will receive $14.25 per share in cash, which is a “56% premium over Everi’s closing share price on July 25, 2024.”

IGT will receive $4.05 billion in gross cash for IGT Gaming, much of which will be used to repay debt and be returned to shareholders.

Apollo describes itself as “a high-growth, global alternative asset manager,” with an affiliated retirement services business.

Second big shakeup in Rhode Island’s gambling world

Friday’s announcement marked the second big shakeup in Rhode Island’s exclusive gambling empire in two days, following the announced sale a day earlier of the Bally’s Corporation to its majority stockholder, hedge fund Standard General.

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