Registration

Apollo Lack of Sportsbook Experience Could Be Hurdle in Tabcorp Bid, Say Analysts

apollo-lack-of-sportsbook-experience-could-be-hurdle-in-tabcorp-bid,-say-analysts

Last week, Apollo Global Management (NYSE:APO) upped its bid for Tabcorp’s betting and media businesses to $3.1 billion. But some analysts believe the private equity firm’s dearth of direct sportsbook operational experience could hinder its dealings with the Australian gaming company.

Apollo TabcorpApollo Tabcorp
Scenes from the 2015 Melbourne Cup. Lack of Australia exposure could hinder Apollo’s run at Tabcorp assets, say analysts. (Image: New York Times)

While Apollo has been actively involved in sportsbook management, it’s no stranger to the gaming business. It recently acquired Great Canadian Gaming Corp. (GCGC) and is working with VICI Properties (NYSE:VICI) to purchase the Venetian and Sands Expo and Convention Center in Las Vegas for $6.25 billion. Last December, Apollo paid $1.15 billion to International Game Technology (NYSE:IGT) for Gamenet Group S.p.A — an Italian digital gaming, gaming machine, and sports wagering operator.

As part of its effort to get the Tabcorp deal done, Apollo offered $500 million for the Australian company’s gaming services unit. It’s a business that wasn’t initially part of a strategic review launched by the operator. MST Maquee gaming analyst Rohan Sundram called that move an “added sweetener” on the suitor’s part.

Without that component, Apollo’s offer merely matches a revised bid of $2.7 billion from Entain Plc (OTC:GMVHY) for Tabcorp’s media and sportsbook arms.

For Apollo’s Tabcorp Ambitions, Complications Abound

An array of regulatory issues in Australia could weigh on Apollo’s efforts to win what are viewed as plum assets from Tabcorp.

The likely existence of change of control provisions amongst [Tabcorp’s] multiple agreements with various racing bodies… further complicate an already complicated matter and would take some time to negotiate through,” said MST’s Sundram in an interview with the Sydney Morning Herald.

It’s not immediately clear if Australian regulators have a preference for a company with a local footprint to buy businesses from Tabcorp. But if that’s the case, Apolllo could be hamstrung. Entain, which already operates in the country, publicly made a bid, while Rupert Murdoch’s Fox Corp. (NASDAQ:FOXA) is considering an offer, too.

Various state racing bodies throughout the country will need to approve any divestment by Tabcorp. With Entain already licensed in the country and Fox having deep ties there, either could be seen as a preferred buyer over Apollo in the eyes of regulators.

Evans and Partners analyst James Fuller told the Herald that Apollo lacks global and local sports wagering operations, and that could hinder its run at Tabcorp. Conversely, Entain is a global sportsbook operator. In addition to its Australian footprint, it’s one of Europe’s largest sports betting companies, and it’s a growing force in the US by way of its 50 percent stake in BetMGM.

Apollo Wants Sports Betting Exposure

What comes of its run at Tabcorp’s media and sports betting businesses remains to be seen. But it’s clear Apollo has some desire to up its sports wagering profile on a global scale.

In addition to the Gamenet Group acquisition, the private equity giant is seen as one of the leading contenders in a coming auction for William Hill’s European operations.

The Great Canadian buy positions Apollo to capitalize on single-game wagering there, and the recent acquisition of Yahoo! from Verizon gives it command of Yahoo! Sports, which is a media partner of BetMGM.

The post Apollo Lack of Sportsbook Experience Could Be Hurdle in Tabcorp Bid, Say Analysts appeared first on Casino.org.

en_GBEnglish