Nevada Gaming Commission approves Aristocrat acquisition of NeoGames

April 18, 2024 8:31 PM
Photo: CDC Gaming Reports
  • Buck Wargo, CDC Gaming Reports
April 18, 2024 8:31 PM

The Nevada Gaming Commission Thursday signed off on Aristocrat acquiring NeoGames for AUS$1.5 billion (US$962 million).

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The soon-to-be-completed acquisition of the online gaming operator will give Aristocrat an entry into the ilottery market and pave the way for further penetration in online-gaming verticals.

NeoGames was founded in 2014 as a spinoff from Aspire Global, a business-to-business gaming company operating in Europe. The acquisition of NeoGames is expected to quickly position Aristocrat as a leader in online gaming.

As part of the approval, the Commission licensed Tracey Elkerton, Aristocrat’s chief compliance officer and director of many of the group’s subsidiaries, including Aristocrat Technology Gaming Systems, the entity acquiring NeoGames.

“We believe this transaction will be transformational to our business and lay the foundation to fulfill our ambitions to be a leader in the online gaming,” Elkerton told the Commission.

Elkerton said the company conducted extensive background checks on NeoGames’s executives. Finding nothing unsuitable, Aristocrat approved NeoGames in May 2023, which led to the deal to acquire it, including its four complementary business segments. Besides NeoGames and its ilottery platform, the others include Aspire Core, which provides a full-service technology platform and managed services to igaming and online sportsbook operators globally. Pariplay is an aggregation platform. BtoBet is a sportsbook that operates in Africa, Europe, and Latin America.

The deal will be funded with existing cash and the plan calls for using internal dividends, giving the company loans and issuing shares to make the final payments at close, Elkerton said.

The acquisition positions Aristocrat with “global scale and capability” in the online-gaming industry, Elkerton told the Commission. It creates “significant revenue opportunity” by linking Aristocrat’s content and relationships, particularly regulatory ones, with NeoGames’ platform and technology. In addition, Aristocrat will acquire a proven and experienced management team that will help it scale the business.

“A lot has to happen between now and close,” Elkerton said. “The first step is that NeoGames will redomicile to the Cayman Islands and we’re targeting April 24th for that to occur. NeoGames, currently traded on NASDAQ will cease trading and finally NeoGames will hold a shareholder meeting as a Cayman company and shareholders will be asked to vote again to approve the merger of the two entities.”

That’s a formality; an overwhelming majority of shareholders have already approved the merger previously, Elkerton said.

“We do not anticipate any obstacles to completing these steps,” Elkerton said. “We anticipate closing will occur immediately after the shareholders vote on the 25th.”

Aristocrat has secured relevant antitrust, foreign investment, and remaining regulatory approvals to proceed to close. It received approval on Wednesday from Louisiana, Elkerton said.

“We were in an executive leadership meeting when that came through and there were a few tears,” Elkerton said. “We were desperately waiting.”

Commissioner Brian Krolicki called Aristocrat a “fine” company with “scope and breadth.” He said the acquisition is a “compelling strategic story” for the company. “It’s exciting not only for your company, but for the gaming industry and Nevada. With the explosion of online gaming, I can see why it’s such a compelling business proposition for Aristocrat.”

Elkerton, an Australian native, has been with Aristocrat for nearly 26 years.

She said that in her expanded role, there’s a lot to learn and her team is energized by the transaction and learning about new products.

“I realized how much I didn’t know about online gaming until we started to look at this acquisition,” Elkerton said. “We did anticipate that these would be new businesses and new products in verticals we don’t operate in today. As a result, 15 months ago, we hired a compliance manager to lead our efforts for our online wagering business.”