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Executives from IGT and Everi have moved to reassure investors over regulatory uncertainty surrounding the proposed merger of the two companies.

Last week, IGT announced it would spin off its land-based and digital businesses, which would then immediately merge with Everi Holdings in a $6.2bn deal.

The new entity would retain the IGT brand, while the company’s lottery division would continue as a standalone, pure-play business.

In an investor call following the announcement, both IGT and Everi execs outlined the regulatory hurdles that need to be overcome to execute the merger by its proposed deadline, between late 2024 and early 2025.

According to reports, the suggested timeline and potential uncertainties around gaining the necessary regulatory approvals have been something of a sticking point for investors.

While IGT CEO Vince Sadusky (pictured) noted antitrust could be a factor, he argued that “even with this combination there’s competitors who are larger out there.”

In terms of gambling regulators, Sadusky said both firms’ statuses as “long-standing, very highly compliant, reputable” public companies would ease the regulatory transition.

“This is not combining with, let’s say, a large digital entity based outside of the US that’s involved in grey markets, black markets, where there’s a lot of promises of divestitures in order to get regulators, especially in North America, to get comfortable with the deal,” he added.

Merger origins

During the conference call, Sadusky also provided investors with some additional background on how the deal first came together.

He highlighted that IGT has reported two consecutive years of record results, but that this had not been reflected in the company’s share price performance.

This, he suggested, demonstrated that the business “really needed to do something strategically.”

He also explained that IGT’s analysis showed splitting off the gaming and lottery businesses was the key to unlocking value.

The merger would facilitate this by allowing for an increased focus on each business, he suggested, while each would maintain its own individual capital policy.

After considering a number of scenarios, Sadusky said the Everi deal made the most sense of any other options they looked at.

“We don’t feel like there’s any leakage in terms of negative synergies or divestitures that are necessary,” he said of the deal.

“We are in amazingly complementary product lines, given their strength in FinTech. We’re not in FinTech. We’re in systems. We’re both pursuing cashless but with different industry-leading competencies.

“Separation made a lot of sense and separating with a great partner like Everi, with these complementary strengths, really was the best alternative and not even close to anything else that we had pursued or worked on,” he concluded.

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