Apollo has closed a $6.3 billion acquisition of IGT's gaming and digital business alongside Everi, creating a platform with $2.6 billion in annual revenue.
Apollo Funds closed the $6.3 billion acquisition of IGT’s gaming and digital business alongside Everi. This transaction separates the IGT lottery division into a new entity called Brightstar Lottery. The combined gaming and digital assets will operate under the IGT brand. The company moves its headquarters back to Las Vegas after 10 years in Italy. Daniel Cohen, an Apollo partner, says the merger creates a competitive platform built for long-term growth. The business includes three subdivisions: digital, gaming, and fintech. The product mix generates a recurring revenue profile of over 80%. Nick Khin, the interim CEO, leads the gaming division. Hector Fernandez will step into the CEO role in the fourth quarter of 2025 after his non-compete period ends. Everi stockholders receive $14.25 per share in cash, which is a 56% premium over the closing share price on July 25, 2024. IGT receives $4.05 billion in gross cash proceeds to repay debt and return capital to shareholders. De Agostini S.p.A., the majority shareholder of IGT, will make a minority equity investment in the combined enterprise. The acquisition uses $4.3 billion in debt and $2.4 billion in equity. The combined operations account for over 11,000 jobs and $2.5 billion in annual state revenue. The new business generates $2.6 billion in annual revenue and $1.1 billion in EBITDA. You should note that the IGT brand left Las Vegas in 2015.
State management contracts and legal disputes
New Jersey became the third state to privatize management of its state lottery, following Illinois and Indiana. The 15 year contract involves a $120 million upfront payment. Northstar New Jersey Lottery Group, a joint venture of GTECH Corporation, Scientific Games, and the Ontario Municipal Employees Retirement System, takes over marketing and sales in October. The state retains control over security, licensing, auditing, and prize payments. The agreement between New Jersey and the Northstar New Jersey Lottery Group allows a private manager to handle marketing and sales while the state keeps control over security, licensing, auditing, and all prize payments. This contract aims to generate $1.42 billion in additional net income for the state. The Communication Workers of America opposed the deal, claiming it violates federal law because the Department of Justice found that states must maintain control over significant business decisions. The deal includes a provision that places a cap on potential profits for the contractor at 5 percent of total net income. This cap aims for compliance with a 2008 Department of Justice advisory opinion regarding private management of lottery enterprises. The Illinois agreement arrived in 2011 and the Indiana agreement arrived in 2012. Both states retain full control over business decisions and cap private manager revenues.
The lottery software market and vendor dominance
The lottery software market expects to grow from $6.047 billion in 2024 to $11.59 billion by 2035. This represents a compound annual growth rate of 6.09%. Major vendors include IGT, Scientific Games, NeoPollard Interactive, and Pollard Banknote. Scientific Games won the "Lottery Supplier of the Year" award three times at the 2017 ICE Totally Gaming conference. IGT and Scientific Games formed a consortium to operate the Minas Gerais State Lottery in Brazil. This 20 year agreement includes an option for renewal. The consortium includes local partner SAGA Consultoria e Representacoes Comerciais e Empresariais S/A. The agreement provides an exclusive license for instant and passive games in the state of Minas Gerais, which has 21 million people.
| Market Metric | Value |
|---|---|
| 2024 Market Size | $6.047 Billion |
| 2035 Market Forecast | $11.59 Billion |
| Projected CAGR | 6.09% |
| Apollo Acquisition Value | $6.3 Billion |
The market for online lottery sales involves a distinction between state-run platforms and courier services. Courier services like Jackpocket buy official lottery tickets on a customer’s behalf. In 2024, DraftKings acquired Jackpocket.
Regulatory friction and state bans
Texas banned lottery couriers in 2025 through Senate Bill 3070. This law moved the lottery to the Texas Department of Licensing and Regulation. The law also capped purchases at 100 tickets per transaction and ordered an annual state audit of the lottery. The Texas Lottery Commission announced the courier ban on February 24, 2025, after jackpot controversies involving an $83.5 million ticket and a $95 million win. The Texas Rangers investigated these jackpot wins and courier operations. California remains a vocal opponent of courier services. The California Lottery declared in 2021 that courier services violate state laws. In Brazil, the LOTEX privatization failed due to corruption and political greed. The Brazilian government misjudged the lottery industry. The sale of LOTEX faced scrutiny because of the high cost of roadshow presentations. In Pennsylvania, the attorney general rejected a lottery management contract with Camelot in February. Why do states continue to fight these different business models?