Opinion: Gaming mergers long overdue
By Howard Stutz, Las Vegas Review-Journal
The combined $11.5 billion in lottery company-slot machine company mergers in the past few weeks has the investment community relieved.
The gaming equipment sector, in the eyes of some analysts, has been bloated.
A soft replacement market for new games left slot machine manufacturers with a backlog.
In the past few years, many new products never made it from the Global Gaming Expo trade show floor to a casino.
A shake-up was needed.
In July, Italian lottery company GTECH Holdings announced it would buy slot machine giant International Game Technology for $6.4 billion. Less than two weeks later, New York-based lottery provider Scientific Games Corp. said it was acquiring Bally Technologies for $5.1 billion.
The deals for the Nevada-based companies — the world’s No. 1 and No. 2 slot machine providers — involve cash and stock transactions, along with debt assumption.
Fitch Ratings Service gaming analyst Alex Bumazhny said the buyouts were overdue.