Nevada regulators today approved the merger of Scientific Games and Bally Technologies, paving the way for two of the biggest gaming technology companies to become an even larger combined entity.
The state Gaming Commission unanimously green-lighted the $5.1 billion merger just after the Gaming Control Board gave its initial blessing at a special meeting in Las Vegas. The merger, which was announced less than four months ago, creates a company that offers a broad range of gaming products, including lotteries, table games, slot machines and interactive games.
Once merged, the new company expects to generate $3 billion in annual revenue and $235 million in cost savings. Scientific Games executives said some layoffs will result, but they would not yet say how many.
Under the new corporate structure, Bally will be a wholly owned subsidiary of Scientific Games along with WMS Industries, which Scientific Games acquired last year for $1.5 billion. From the consumer's standpoint, all three brands will remain intact.
Scientific Games is paying $83.30 per share and also assuming nearly $1.8 billion of Bally debt. The lottery company announced last week that it completed financing of the deal.
Gavin Isaacs, the CEO of Scientific Games, told the control board that the merged company will have the size and scale to invest in more advanced gaming technology. The merger puts Isaacs in a unique situation, as he once held positions at both Bally and SHFL entertainment, which was acquired by Bally last year.
Ronald Perelman, the billionaire chairman of Scientific Games, also attended the meetings. He told regulators that New York-based Scientific Games "love(s) doing business in Nevada."
"We're thrilled to be here, thrilled to participate in the building of this company and the future of this industry," Perelman said.
Regulators, for their part, seemed eager to approve the deal.
"Is this good for Nevada? I think it will be," said Gaming Commission Chairman Tony Alamo. He suggested that, despite layoffs as the companies combine operations, Scientific Games could expand its presence in Nevada.
Scientific Games and Bally are not the only major companies on the technology side of the casino industry that are merging.
Slot machine company International Game Technology and Italian lottery operator Gtech announced plans to merge in July.
Regulators have yet to approve that deal, but Gaming Control Board Chairman A.G. Burnett
said the process is moving forward.