Paul’s Take2 Blog March 7, 2021

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Paul’s Take2

The U.S. regulatory scene continues its march towards regulation of the online gaming world.  Sports betting may be the big driver of this trend, but regulation of iLottery is moving forward as well.  Online gaming, gambling, and lottery has been regulated for many years in the vast majority of jurisdictions around the world.  It is time for the U.S. to catch up and hopefully 2021 is the year we do.  Proper regulation of the online gaming and lottery worlds is quite in keeping with the spirit of Responsible Gaming Month.  Now is a very good time to implement a system to protect consumers by providing a safe and secure destination for recreational online gaming, and channel economic benefit to society in the form of taxes and funding for good causes.   

Who is Apollo Global Management and why are they buying all these gaming properties?

Apollo is a leading global “alternative” investment manager with assets under management of approximately $433 billion.  Their mission as described on their website: “We embrace complexity and fuel innovation to find potential where others do not.”  On the face of things, Apollo Global is a huge fund, led by luminaries (albeit with lengthy and interesting back-stories) in the credit and private equity sectors who appear to be very optimistic about the future of gaming. 

September, 2020: Attempts to purchase William Hill Sportsbook but backed out of the bidding at the last minute.  William Hill was subsequently purchased by Caesars Entertainment in September, 2020.  (Side-note: Apollo owned Caesars for a few years prior to losing much of its equity in Caesar’s bankruptcy reorg of 2016 and divesting the rest of its holdings in 2019.)     https://www.reuters.com/article/us-william-hill-m-a-apollo/apollo-formally-ends-bidding-war-for-britains-william-hill-idUKKBN27S0UX

November, 2020:  Purchases 100% of Great Canadian Gaming Corporation which operates 25 gaming, entertainment and hospitality facilities in Ontario, British Columbia, New Brunswick, and Nova Scotia. https://www.reuters.com/article/us-great-canadian-gaming-m-a-apollo-glob/great-canadian-gaming-gets-shareholder-nod-for-1-96-billion-buyout-deal-idUSKBN28X2NG

November, 2020:  Invests €500 million in Sazka Group, subsidiary of holding company KKCG with lottery and gaming operations in the Czech Republic, Austria, Greece, Italy, and other markets.  Sazka said that “most of the new funds would go towards acquisition and growth opportunities in Europe and North America, with a particular focus on lotteries.”  The investment will be made into Sazka Entertainment, a new subsidiary of KKCG that will become the 100% owner of Sazka Group upon closing. Sazka is also competing for the license to operate the UK National Lottery which is awarded again in 2023.  https://www.reuters.com/article/sazka-apollo-global/apollo-funds-investing-into-czech-based-lottery-firm-sazka-group-idUSL8N2HW2BY

December, 2020:  Gamenet Group S.p.A., a subsidiary of funds managed by an affiliate of Apollo Global Management, Inc.  purchases 100% of Lottomatica Videolot Rete S.p.A. and Lottomatica Scommesse S.r.l., the members of the IGT group which conduct its Italian B2C gaming machine, sports betting, and digital gaming businesses.  https://www.igt.com/Explore%20IGT/News/News%20Room%20Details?Index=20201207089d

January, 2021: Purchases the Venetian Resort and Sands Expo and Convention Center Operating Company from Las Vegas Sands     https://www.globenewswire.com/news-release/2021/03/03/2186026/0/en/Apollo-Funds-to-Acquire-The-Venetian-Resort-and-Sands-Expo-and-Convention-Center-Operating-Company-from-Las-Vegas-Sands.html

Side-bar observation:  See article “Hungarian state lottery company Szerencsejáték aims to expand abroad”.  It seems like government lottery operators want to emulate Sazka and get into the technology business and otherwise sell their home-grown products and services to their colleagues around the world.  It remains to be seen how transferable the skill-sets and business competencies are between the two sectors of government operations and commercial technology partners.  In any event, hopefully all this optimism on the part of investors is an accurate reflection of the prospects for growth and prosperity in the games-of-chance industry.