Looking to goose its stock price, International Game Technology has put itself up for sale, according to Reuters. IGT has evidently been able to keep the process top-hush for two months, as it works with Morgan Stanley on constructing a deal. Predictably, IGT stock leapt 15% at the news. However, an emaciated IGT market capitalization (down 31%) could keep prospective buyers away, as might a protracted regulatory-approval process. Still, coming off a 2Q14 drop in profit of 66%, CEO Patti Hart could use some good news.
“Private equity firms, meanwhile, could face a financing challenge stemming from a likely lengthy regulatory review, as banks funding a leveraged buyout would not be able to indefinitely hold funds aside for a deal,” quoth Reuters.
Another way for IGT to increase shareholders returns would be to spin off is lucrative social-gaming division, though that would seem to defeat the purpose of some pretty expensive acquisitions. Gtech and Konami have been tipped as potential buyers. Incidentally, one of the other prospective suitors is Apollo Global Management, the same brain trust that is responsible for the ongoing fiasco that is Caesars Entertainment. Oh dear.
More than ever, Americans accept casino gambling as an entertainment option like any other. Those are the findings of an American Gaming Association consumer report. Its poll found 57% of Americans in favor of gambling, 70% believing them to be engines of economic development, and 87% deeming it acceptable. A thousand U.S. citizens were surveyed by the bipartisan team of Mark Mellman and Glen Bolger.
The poll results bolster two key talking points frequently made by Caesars CEO Gary Loveman: that gambling should be treated like any other business (fast food is his preferred analogy) and that tax rates on it are punitively high. (Only 51% agreed with that, so there’s work to be done.) Also learned in the study: two-thirds of us have incomes between $60,000 and $99,000 and go to church. Three quarters of us set a gambling budget (mostly below $200) and patronize neighboring business. And support for gambling cuts across party lines.
“There has never been a better time to go on the offensive,” stated AGA President Geoff Freeman, “we need to promote the hell out of the 
industry.” Release of the Mellman/Bolger survey could be regarded as the opening salvo of that offensive. “A big part of the attraction is that casinos are used for other entertainment means, such as dining or going to the movies,” added Mellman.
The early consensus is that Freeman will use these poll numbers to push for lower tax rates (and possible regulatory changes) in states that use what he calls the unsustainable “tax and torture” method: “Every state saw gaming as the Golden Goose. But geese can’t keep on giving.” (Delaware‘s having that very debate as we speak.) Interestingly, the AGA-sponsored study went nowhere near the issue of Internet gambling. Freeman’s gotten burned on that and is clearly in no hurry to pick that hot potato up again.
