Gaming enthusiasts should expect to see some new games on casino floors in the future.

The recent $6.3 billion merger of casino equipment suppliers International Game Technology (IGT) and Everi Holdings — two of the gaming equipment sector's largest providers — will benefit the consumer, according to gaming industry observers.

The consolidation allows the new company to step up its efforts to create new games while improving older products, said Barry Jonas, a gaming analyst with Truist Securities.

The result could lead to increased gameplay by customers on the casino floor, which translates into improved gaming revenue for casino operators.

Todd Eilers, a partner in advisory and research firm Eilers & Krejcik Gaming, expects that investment giant Apollo Global Management, which funded the merger, will make hefty investments toward improving the new IGT, including hiring talented game developers, creating new equipment and potentially acquiring smaller gaming manufacturers.

But that doesn’t mean the merger will stifle the competition.

“The larger vendors have greater distribution capabilities, service and support,” Eilers wrote in an email. “But despite those advantages, there are several mid-tier and emerging [gaming equipment] vendors that continue to perform very well.”

And don't expect every other slot machine to be Wheel of Fortune — one of IGT's most popular games since 2001.

“No single vendor provides all products to a casino, so the short answer is no,” Eilers wrote when asked if casino operators might prefer a one-stop shop for their gaming floors. 

The combined company, which took on the IGT name, can provide services for nearly every aspect of the casino floor — slot machines, electronic table games, casino management systems, financial transaction technology and platforms to manage and operate a sportsbook. 

Eilers said there are also “clear synergies” between the merged companies. For example, he suggested IGT’s casino management system could be integrated with Everi’s cash transaction technology, making for smoother and secure financial transactions on a slot machine.

The companies could also combine research and development resources to create gaming products for traditional casinos that could easily translate into the expanding online casino market. 

But Eilers doesn’t believe IGT will slash the cost to operators and offer better deals on gaming equipment. Through analytics on game play and wagering trends, casino players ultimately provide the final determination on which games are found on casino floors.

“Gaming suppliers don't compete on price,” Eilers said. “Game performance is the number one driver for game sales or lease placements. Price is not unimportant, it's just lower down the list in order of purchasing criteria.”

The merger between IGT and Everi is the latest shakeup in the gaming equipment manufacturing and development universe that has experienced multiple multibillion-dollar buyouts and mergers for more than a decade.

One change at IGT is already in the works. Last December, Apollo announced a management team headed by former Aristocrat Gaming CEO Hector Fernandez would oversee IGT. Fernandez resigned from the rival slot maker and has a contractual non-compete clause that is expected to expire later this year.

Hedge fund’s latest gaming deal 

Apollo, the New York City-based hedge fund, which oversees more than half a trillion dollars worth of assets on behalf of pension funds, endowments, sovereign wealth funds, insurance companies and other institutional clients, has taken a renewed interest in acquiring gaming to make them more profitable.

“We’ve dedicated a significant amount of time over the past 20 years to the gaming sector,” Apollo managing partner Daniel Cohen told the Nevada Gaming Control Board last month. “Gaming is the most prolific and successful investment area in private equity.”

The IGT-Everi deal is Apollo's second gaming venture in the last three years. The company paid $2.25 billion to acquire the operations of The Venetian, Palazzo and Venetian Expo in 2022 as part of a $6.25 billion purchase from Las Vegas Sands Corp. Real estate investment trust VICI Properties paid $4 billion for the land and buildings.

That same year, Apollo sold its 22 percent ownership in Las Vegas-based gaming equipment provider AGS, a stake the private equity firm has held for almost 10 years.

Before acquiring The Venetian’s operations, Apollo had an 11-year ownership in Caesars Entertainment, which began in 2008 as a $30 billion leveraged buyout of the casino operator in partnership with fellow private equity firm TPG Capital.

It ended in 2019, after the completion of a complicated, two-year Chapter 11 bankruptcy restructuring that changed Caesars’ ownership structure and wiped $16 billion of the company’s pre-bankruptcy $25.6 billion in debt off the books.

The Caesars ownership did not come up during Apollo’s two Nevada regulatory hearings, in which the company was unanimously approved.

“We’re combining two franchise assets and complementary product portfolios to build a leader,” Cohen said of IGT and Everi. “We will be one of the few companies that has every touchpoint in the casino.”

The combined business is expected to generate $2.6 billion in annual revenue, of which roughly two-thirds will come from the existing IGT gaming and digital business.

Cohen told Nevada gaming regulators the operations of The Venetian and IGT would be separate, given that each business is owned by different investment funds. The two entities employ a combined 11,000 workers in Nevada, making the Silver State “critically important to our business and go-forward plans,” Cohen added.

IGT, according to a quarterly earnings filing last summer, had nearly 54,000 slot machines worldwide. Following the completion of the Everi deal, IGT was expected to grow that total to 70,000 games.

Founded in Nevada in 1979 by the late Si Redd, IGT brought historic change to the slot machine industry. The company is credited with the expansion of video poker and introduced innovations, such as computer-driven slot machine reels and “Megabucks,” the first wide-area progressive jackpots. 

In the late 1980s, IGT secured the rights to the popular television game show Wheel of Fortune and created a slot machine based on the program in partnership with rival Anchor Gaming, which it purchased in 2001. The game has been a staple in casinos worldwide for three decades.

When the merger closed, Everi stockholders received $14.25 per share in cash. The former IGT, a Rome-based lottery company now known as Brightstar Lottery, received $4.05 billion for the gaming division and corporate name.

More companies going private

One likely consequence of the IGT-Everi consolidation — fewer public details about gaming manufacturers. The merger means the number of large-scale manufacturers listed on the public stock markets has shrunk, as IGT and others come under private ownership.

AGS announced last year it was being acquired by private equity firm Brightstar Capital Partners for $1.1 billion and would leave the New York Stock Exchange. That deal was approved by the Nevada Gaming Commission on June 26 and closed last Monday.

Jonas said the two deals leave Las Vegas-based Light & Wonder as the only U.S.-based gaming equipment provider publicly listed. Two other major slot machine providers are listed on foreign stock exchanges — Japan-based Konami on the Tokyo Exchange and Aristocrat on the Australian Exchange.

“Limited disclosures of financial information by private companies could make the overall slot machine market trends less transparent,” Jonas said.

The path to a merger

IGT and Everi took similar routes on the path to becoming one company.

A decade ago, IGT was the gaming industry’s largest equipment manufacturer with headquarters in Las Vegas. In 2015, the company was acquired for $6.4 billion by lottery giant GTECH, which had a 79 percent market share of the total U.S. lottery industry, including managing operations in the nation’s three largest states: New York, California and Texas. 

The company, which took on the IGT name and symbol on the New York Stock Exchange, was headquartered in Rome with its U.S lottery presence in Connecticut. After the deal closed, IGT’s Las Vegas headquarters in the southwest valley were sold, but the company maintained space in the building for sales, marketing and other services. Manufacturing was centered at IGT’s former corporate headquarters in Reno.

Everi was created from the 2014 sale of slot machine maker Multimedia Games to financial services provider Global Cash Access for $1.2 billion. At the time, Multimedia Games was considered one of the up-and-coming slot machine manufacturers with headquarters in Austin, Texas, and a sales and marketing office in Las Vegas. 

The name change away from Global Cash Access and new branding signified the company’s transition to providing the gaming industry with more than just payment processing equipment.

The newly merged IGT will take over Everi's corporate headquarters in Las Vegas, which includes a 182,500-square-foot manufacturing and distribution facility for its gaming equipment and financial technology products that opened in 2023.

IGT President of Global Gaming Nicholas Khin is now the interim CEO of the merged company until Fernandez arrives. Khin will then take over as CEO of IGT’s slot machine business.

Apollo officials told state gaming regulators that one-third of the new IGT management team will come from the former IGT, along with one-third from Everi. The remaining third will be individuals from gaming companies or other businesses.