Why IGT Plans To Spin Out Its Sports Betting Business – Legal Sports Report

IGT is spinning out its online gambling business and could list part of it next year.

The technology provider revealed the plan at an investor day Tuesday in a bid to maximize value from its Digital & Betting business unit.

IGT will establish that division as a separate legal and operating entity over the next 12 months. From there, it will decide whether to list it.

IGT said the new structure would help it attack the high growth online gambling industry.

That structure includes:

The IGT brand might not be well-known by bettors and casino-goers, but its products are.

Its PlaySports technology is behind about 50 US sports betting operations, both retail and online. Current customers include US market leader FanDuel Sportsbook. IGT also provides online casino content.

In Q3 2021, the Digital & Betting business grew 37% year-on-year to $43 million. Adjusted EBITDA was up 66% to $15 million.

The unit is on track for $160 million in revenue this year.

Of course, there is no guarantee the listing will go ahead.

IGT said it would evaluate that decision next year. It will also retain a majority stake in the business regardless.

A lot could depend on the wider market and its appetite for US sports betting companies.

US sports betting stocks are struggling with DraftKings and Penn down more than 40% from their highs.

Similarly, Wynn just cancelled its plans to list part of Wynn Interactive. Wynn Interactive is of course a B2C asset, but the US industry has not been kind to B2B companies either.

Operators are keen to control their own technology and even market leaders like Scientific Games have chosen to focus elsewhere.

That said, IGT was quick to point out it had opportunities in retail sports betting and online casino content, not just online sports betting.

The companys share price was last up around 1% on the New York Stock Exchange following the investor event.

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Why IGT Plans To Spin Out Its Sports Betting Business - Legal Sports Report