Why Caesars is Unlikely to Seek the Acquisition of NeoGames


Caesars Entertainment (NASDAQ: CZR) recently completed the acquisition of William Hill. Now, Caesars has a taste for an iLottery provider, NeoGames (NASDAQ: NGMS).

According to Securities and Exchange Commission (SEC) filings released last Friday, Caesars owns 6.12 million shares of NeoGames, equivalent to 24.5 percent of the company’s outstanding shares.

Basing on NEOGame’s Saturday closing of $42.18, Caesar’s stake in NeoGames is worth $258.44 million. NeoGames went public last November, and shares are up by 11 percent year to date but off the record set in early June.

The SEC document did not indicate that Caesar wanted to be an activist investor in NeoGames. Caesars is in business running integrated resorts, online casinos, sportsbooks and may be compelled by NeoGames’s business model.

Neogames provides online lottery services and solutions based on a variety of states in the US. It is pure play equity that is increasingly being adopted by states.

NeoGames is operational in North Carolina, Virginia, and New Hampshire and is being pursued in Alaska, Maryland, Connecticut, Missouri, Ohio, Oregon, and Massachusetts.

Bottom line, Caesars owns a significant stake in NeoGames. However, that does not imply that a takeover will come to pass. Furthermore, Caesar just completed the $3.69 billion acquisition of William Hill and is in the process of auctioning the international entity to create cost efficiencies.


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