Bally Technologies Inc. (BYI) Has Eyes on Online Gaming With SHFL entertainment Inc (SHFL) Purchase

Bally logoConsolidation among gaming suppliers is continuing, and now it’s with an eye on the future of online gaming. Earlier this year, Scientific Games Corp (NASDAQ:SGMS) said it would buy WMS Industries Inc. (NYSE:WMS) for $1.5 billion, creating a company with lottery equipment and slot machines. Today, Bally Technologies Inc. (NYSE:BYI) agreed  to buy SHFL entertainment Inc (NASDAQ:SHFL) for $1.3 billion, or $23.25 per share, creating a casino supplier that can offer nearly all products or services needed to run a casino.

They pointed to the typical synergies and complimentary products in the announcement, but when you think about the future of gaming, this is about online gaming. Both companies are approved to build online games in Nevada and, as online gaming spreads state by state around the country, they will be able to leverage their capabilities to expand that business.

As it stands now, the gaming supplier market for online gaming is going to play a key role. Companies like Bally Technologies Inc. (NYSE:BYI), SHFL entertainment Inc (NASDAQ:SHFL), or International Game Technology (NYSE:IGT) won’t offer betting directly to customers, they’ll supply technology to casinos, who will own licenses. This is similar to a casino but, since the game itself is the draw, the game itself is key.

In that respect, scale and a wide range of offerings will be important to suppliers. Bally Technologies Inc. (NYSE:BYI)’s iGaming Platform is already offering online slot games in the U.K., and online poker will likely be key domestically. After SHFL entertainment Inc (NASDAQ:SHFL) entertainment dropped its Ongame purchase last year, it appeared that the company would have to develop its own technology, making scale important. This acquisition allows Bally Technologies Inc. (NYSE:BYI) and SHFL entertainment Inc (NASDAQ:SHFL) to build a complete platform of games at a cost that will be shared among a larger organization.

There’s no doubt that Bally Technologies Inc. (NYSE:BYI)’s paid a heavy price for SHFL entertainment Inc (NASDAQ:SHFL) at 16 time EBITDA, but it sees an opportunity to be a go-to supplier for both land-based casinos and online gaming. Now the company is set up to win no matter where the industry is headed.

The article Bally Technologies Has Eyes on Online Gaming With SHFL Purchase originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!