Gaming America sits down with industry veteran Stephen Crystal to discuss a raft of recent gaming M&A.
Stephen Crystal, Founder and CEO of SCCG Management, joins Gaming America to discuss a number of recent agreements between companies within the gaming industry.
Last week saw a raft of gaming M&A, with IGT and Everi being acquired by Apollo Global Management, Bally’s finally being acquired by Standard General LP (but staying public for now) and Sega Sammy acquiring Stakelogic.
Can Gaming America get your thoughts on the recent merger announced between Bally’s and Standard General LP?
Look, Bally’s was in a situation where they acquired a lot of debt, expanded very quickly and made some missteps in the marketplace. They acquired assets at the height of the market and it became difficult to monetize those assets.
So this is really a move, in essence, to recapitalize and restructure the company. Given its base of assets across the US, this is what’s necessary for them to be a strong company going forward.
Absolutely. We’ve also seen a merger between IGT and Everi, with both companies to be acquired by Apollo Global Management. How do you view that deal and what is there to say about IGT seemingly following a similar path to Scientific Games, where it has split off its lottery division from the rest of the company?
What’s happened, and you’re seeing it in other transactions including AGS going private, there has been an ongoing consolidation in the gaming industry. Whether it is brick-and-mortar casinos, suppliers to those casinos, online gaming operators and suppliers, this is the reality of a very highly regulated market and all the costs associated with that.
To achieve the economies of scale and increase profitability, companies are having to come together. Apollo is among the richest financiers of assets in the world and it has been very successful in investing in gaming assets, going back to Caesars and other successful examples.
This is an opportunistic investment for them to take two companies that were already combining to create efficiencies, acquire them at the right value and add value to it while preparing for an exit in the future.
A sensible move for them. Do you see Sega Sammy possibly becoming a force as it grows its portfolio with the recent GAN merger and now its acquisition of Stakelogic?
They are acquiring all the pieces. In the US, live dealer represents 50% of the online gaming revenue pie and they now have a platform through GAN, both brick-and-mortar and online gaming.
Sega Sammy already had content and games but now they have a live casino offering, which is an important component, through its acquisition of Stakelogic. The combination makes sense for someone who truly wants to be a competitor in tier-one markets such as the US.
The recent moves are definitely a big step towards that. Finally, if you wouldn’t mind sharing your thoughts on Evolution acquiring Galaxy Gaming earlier this month?
Very simple, they already have a dominant position in the US like they do around the world. They found acquiring a brick-and-mortar supplier for table games to be a good way to provide localized content for this market as well as build distribution through relationships with operators across the US.
I think it was a very logical acquisition for a very affordable price.
