Former Aristocrat Gaming CEO Hector Fernandez, the future CEO of IGT, stands beside one of Aristocrat's NFL themed slots during G2E in Las Vegas on Oct. 11, 2023. Jeff Scheid/The Nevada Independent
The multibillion-dollar merger between gaming equipment giants International Game Technology and Everi Holdings won’t be finalized until late next year.
But the future owner, hedge fund giant Apollo Global Management, isn’t wasting time. Apollo has already made public plans to merge the operations into a single privately held business focusing on three divisions — casino floor equipment, digital gaming and financial services.
It’s part of Apollo’s plan to shake up the slot machine and gaming technology universe.
Apollo announced a management team last week — headed by former Aristocrat Gaming CEO Hector Fernandez — that will oversee the future $6.3 billion privately held enterprise. Fernandez resigned from the Australian-based company allowing a contractual non-compete clause to expire before he becomes CEO of the combined businesses.
The new privately held company is expected to take on the IGT name and be headquartered in Las Vegas.
In a statement, Apollo partner Daniel Cohen credited Fernandez with leading Aristocrat in developing new and popular slot machines, including an exclusive agreement with the National Football League.
IGT, which merged in 2015 with Italy-based lottery giant GTech Holdings in a $6.4 billion deal, has remained part of a troika — along with Aristocrat and Light & Wonder — that accounts for more than 65 percent of all slot machine sales to casinos in the U.S. and Canada, according to Eliers & Krejcik Gaming.
Splitting from the lottery company allows IGT’s management to focus on the casino and online businesses under Apollo, which has more than $548 billion of assets under its management purview and was added last week to the S&P 500 — the world’s most-watched equity gauge.
Todd Eilers, a principal in the Southern California-based research and advisory firm, said an example for IGT-Everi was set in 2022. Light & Wonder has flourished since it was separated from the lottery–centric Scientific Games to focus solely on providing gaming equipment.
“I just don't think the lottery-slot machines combination ever made a whole lot of sense,” Eilers said. “There were some synergies, but it was just not enough to justify the combination. I think being hyper-focused on gaming, whether it be land-based or interactive, is going to be a good move for IGT.”
Apollo has long wanted to make a splash in the gaming equipment sector separate from the hedge fund’s casino interests. The company sold a 22 percent stake in Las Vegas-based slot machine provider AGS for $41 million in 2023 to focus on potentially buying IGT.
In July, Apollo swooped into IGT’s previously announced merger agreement with Everi, which canceled that deal.
Apollo plans to organize the merged IGT-Everi into three divisions — gaming (slot machines and casino management systems), digital (online gaming and sports betting) and financial technology products for cashless gaming (often referred to as FinTech).
Current IGT President Nick Khin will serve as the merged company's interim CEO until Fernandez takes over. Khin will become CEO of the gaming business. Current IGT executive Gil Rotem will be CEO of digital and Everi executive Darren Simmons will be CEO of FinTech.
Eilers said Everi’s slot machine business is small — roughly 5 percent of the total market — but IGT’s gaming equipment market share could help expand the FinTech side as cashless gaming has gained acceptance throughout the industry.
Fernandez, who held several executive leadership roles with Aristocrat after joining the company in 2018, has overseen the global gaming business since 2022.
“I’m looking forward to seeing what Hector can accomplish,” Eilers said.
IGT was born and raised in Nevada and became a gaming industry household name with innovations and gambling products, such as computer-driven slot machine reels and the first wide-area progressive jackpots, commonly known as Megabucks, which were introduced in the 1990s.
The company unveiled the Wheel of Fortune slot machines in 1996, and the game remains a staple on casino floors worldwide almost three decades later. IGT has created more than 250 variations of the game, which have paid out more than $3.6 billion in jackpots.
At October’s Global Gaming Expo, IGT displayed 11 new concepts for Wheel of Fortune, including merging the theme with a video poker slot machine as a jackpot bonus mechanism that uses the word puzzle-solving feature.
Everi shareholders approved the deal in November while IGT’s shareholders aren’t required to sign off on the agreement. The Italian company is expected to have a new name and focus on its worldwide lottery operations.
Regulatory approval by the states where IGT and Everi operate will delay closing until at least the third quarter of 2025.
Apollo paid $2.25 billion in 2022 to acquire the operations of The Venetian, Palazzo and Venetian Expo through a $6.25 billion purchase from Las Vegas Sands Corp., in partnership with real estate investment trust VICI Properties. Apollo pays VICI $283.4 million in annual rent.
In some ways, Apollo hoped to wipe away memories of its previous venture into casino ownership when it spent $30 billion in a leveraged buyout of Caesars Entertainment in 2008 in partnership with fellow private equity firm TPG Capital.
That ownership ended in 2019, two years after the completion of a complicated two-year Chapter 11 bankruptcy restructuring that changed Caesars’ structure, wiped $18 billion of the company’s pre-bankruptcy $25.6 billion in debt off the books and created VICI.
This story was published Dec. 11 by The Nevada Independent and is republished with permission.
