International Game Technology (IGT) is undergoing a significant transformation as Apollo Global Management proceeds with its $6.3 billion acquisition of the company’s gaming and digital business. The transaction, which also includes Everi Holdings, is expected to close by the third quarter of 2025, pending regulatory approvals. Once finalized, Apollo will establish a new Las Vegas-based gaming entity under the IGT name, while the existing company will rebrand and focus entirely on its global lottery operations.

During a recent investor call, IGT CEO Vince Sadusky confirmed that the deal will generate over $4 billion in gross cash proceeds. A significant portion—$2 billion—will be allocated to debt reduction, bringing the company’s net debt leverage down to 2.4x, the lowest in its history. Despite ongoing market speculation, Apollo has yet to provide specifics on its plans for the new IGT gaming division, including workforce adjustments or future strategy.

The Nevada Gaming Control Board has not issued a timeline for reviewing or approving the transaction, and Apollo did not mention the IGT deal during its recent earnings call. Analysts are closely watching how the company will navigate this transition, as IGT’s slot machine manufacturing and lottery divisions have played a major role in the gaming industry for decades.

Strong Financial Performance and Italian Lottery Bid

IGT reported solid financial results (pdf) for the fourth quarter and full year of 2024. The company generated $651 million in Q4 revenue, with adjusted EBITDA of $290 million at a 44.5% margin. For the year, revenue reached $2.5 billion, largely fueled by instant ticket and draw game sales in key markets such as the U.S., Canada, and Italy. Consolidated cash from operations totaled $1.03 billion, with $659 million in free cash flow—more than 80% of which was driven by continuing operations.

As IGT moves toward becoming a lottery-focused company, its bid to renew the Italian Lotto contract remains a top priority. The company has spent the past year refining its technology and product offerings to strengthen its proposal ahead of the March 17 submission deadline. Sadusky expressed confidence in IGT’s ability to maintain its position, emphasizing the company’s three-decade history of innovation and growth in Italy.

According to IGT CFO Max Chiara, the company has accounted for the financial requirements of this bid, with the first installment of the €800 million license fee expected in Q2 2025, followed by a second payment in Q4. The transition to a new contract, should IGT win, would require significant infrastructure updates, which the company has already factored into its capital expenditure planning.

Mega Millions Price Increase and Industry Implications

In addition to corporate restructuring, IGT is anticipating revenue changes due to the upcoming Mega Millions ticket price increase. The cost per ticket will rise from $2 to $5 starting in April 2025, marking a major shift for the multi-state lottery game. Sadusky stated that while ticket sales may initially decline, the overall financial impact is expected to be positive due to higher jackpots and increased consumer engagement.

“Historically, when Powerball or Mega Millions increased their prices, it had a significant impact on net sales,” he explained according to CDC Gaming. He added that while fewer tickets may be sold at first, the higher price point should lead to a faster accumulation of jackpots, which tends to drive more ticket purchases.

Powerball has not announced any plans to adjust its pricing, but industry analysts suggest that if Mega Millions benefits from the price hike, Powerball could follow suit.

Operational Adjustments and Future Outlook

As part of its transition to a standalone lottery company, IGT is focusing on cost efficiency and operational improvements. The company’s OPtiMa 3.0 initiative aims to reduce structural expenses while investing in cloud-based lottery technology. Chiara stated that approximately $40 million in savings is expected by the end of 2026, with the majority of cost reductions occurring in the second half of 2025.

Additionally, IGT’s investment in a new printing press for instant lottery tickets is expected to enhance production efficiency and support new contract bids. The press will allow for higher volume, improved cost management, and better quality control—factors that could give IGT a competitive edge in securing new deals.

The Texas lottery contract renewal is another focus area for 2025. IGT has already submitted its bid, and the state is expected to announce its decision in the first half of the year. Meanwhile, the company recently managed to renew its partnership with LOTTO Thüringen in Germany by signing a new seven-year contract.