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Could A Prominent Hedge Fund Be Ready To Invest In US Online Casinos?

Written By Derek Helling | Updated:
Takeover Bid

Running an entertainment media business profitably is more challenging than ever, and consolidation is one strategy that players in the space seem to be attempting to increase profits. Toward that end, a potential takeover of Paramount Global by Sony Pictures and Apollo Global Management is on the table.

While the situation could get complicated, Apollo’s involvement in the transaction has interesting implications for the US gambling industry. The myriad possibilities may never come to pass, but there is one big question that even the possibility of this takeover poses.

Apollo, Sony extend offer to Paramount

In February, the rumors about Paramount’s status passed into the realm of official news1. Several other entertainment production companies, like Skydance Media and Warner Bros., had already made private overtures to acquire or merge with Paramount.

Besides the storied movie studio, Paramount is also the parent company of CBS and Viacom. The company operates a video streaming service aptly named Paramount+. Viacom runs other entertainment properties like Comedy Central, Nickelodeon, and MTV.

Paramount’s stock price has been gradually losing steam due to factors like poor box office returns for films2 and Paramount+ running in the red3. Thus, the company is available for the right price to the right buyer.

Enter the duo of Apollo and Sony. In late April, they submitted a non-binding offer to Paramount for the entirety of the company of $26 billion4. As of yet, there are no indications of how Paramount’s board of directors feels about that deal.

Regardless, it creates a cornucopia of speculation about what an Apollo/Sony takeover of Paramount could mean. That prognostication includes the gambling industry in the US.

So many possibilities in a Paramount takeover

Many unknowns exist about the Apollo/Sony bid, including what it would mean for Paramount’s various components. For example, the New York Times reported that Apollo/Sony might break up the company upon acquisition.

Doing so might help Apollo and Sony to avoid any antitrust concerns in the move. What seems certain, however, is that Sony would handle the operations of whatever pieces of Paramount it keeps and Apollo would essentially be a minority, silent partner.

Apollo, an investment fund, is no stranger to that setup or the entertainment industry. That includes gambling. Apollo owns several brick-and-mortar gambling establishments across the United States, highlighted by The Venetian in Las Vegas. Other holdings include Delaware Park “racino” in Delaware, plus smaller facilities in Kentucky and New Hampshire.

Apollo has also dipped its toes into online gaming by taking a stake in Italy’s Gamenet5. Gamenet operates the Lottomatica brand in that country.

That investment on Apollo’s part, the bid for Paramount, and the current status of the online gaming industry in the US spur speculation that Apollo could be eyeing wading deeper.

Could Apollo be ready to get in the game?

Since Apollo’s buy-in of Gamenet, Lottomatica has more than tripled its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). That might have given Apollo a taste for more.

In June 2023, Obey Martin Manayiti reported for PE Hub6 that “Apollo said it’s not yet active on that front (online gambling in the US) because the sector hasn’t been profitable.” That narrative is starting to change, though.

For example, DraftKings raised its forecast for EBITDA for 2024 to between $460 million and $540 million after sharing its Q1 2024 earnings. At the same time, Rush Street Interactive also increased its guidance for 2024 EBITDA to between $50 and $60 million.

Moreover, joining a bid for Paramount suggests that Apollo may not be as married to a company showing a gleaming balance sheet in order to invest in the entertainment sector. Philip Alberstat, managing director at Embarc Advisors, thinks it’s probably more of an exception to that rule, however. “Apollo’s venture into acquiring Paramount, despite previously shunning investments in unprofitable sectors such as online gambling, might signal a tactical or opportunistic pivot in the entertainment sphere,” Alberstat explained. “This interest doesn’t necessarily reflect a broad shift in Apollo’s investment approach but highlights the perceived intrinsic value within Paramount Global’s assets, like its streaming service and content libraries, despite their current financial woes. This move suggests Apollo sees a significant potential for turnaround, synergistic benefits with existing holdings, or future profitability in these entertainment assets, rather than a wholesale change in their investment criteria.”

At the same time, also pointing toward Apollo being interested in expanding its online gambling portfolio is that it was rumored to be among potential buyers7 for International Game Technology’s (IGT) global gaming division in September 2023. IGT provides online slots and other games for most US online casino operators.

Moreover, Apollo was a partner in PlayAGS going public8 in 2022. PlayAGS also provides games and other services to US online casino operators.

One facet of the potential Paramount takeover could make Apollo more attractive for an online gambling company in the US.

IP access might make Apollo an attractive partner

Partnering with Sony to buy Paramount would make Apollo a key partner to a company with tremendous intellectual property (IP) assets. Some of those properties, like Spider-Man and Spongebob Squarepants, would be off-limits for gambling integrations because of restrictions on gaming content using IP aimed at children.

Other IP, however, like James Bond and Mission: Impossible could be fair game. To be clear, Apollo’s partnership with Sony would not immediately, inherently give an online gambling firm access to Paramount and Sony IP. That would still go through Sony.

However, Apollo would have the connections necessary to facilitate such contracts more easily. A gambling company that Apollo buys into could even become the exclusive home of online casino content featuring such IP.

Naturally, for Apollo to buy into an online gambling company that operates in the US, every part of the transaction would have to benefit both parties. The appropriate circumstances, like the reels of a slot machine, could be lining up right now.


  1. Paramount Global is for sale. Who’s buying and how did we get here? ↩︎
  2. Global Film and TV production down 7% this year following Hollywood strikes, report says ↩︎
  3. Paramount+ Hits 67.5M Subscribers As Streaming Loss Shrinks to $490M ↩︎
  4. Sony and Apollo’s Plan for Paramount: Break It Up ↩︎
  5. Apollo Global Management buys 48.67% stake in Italy’s Gamenet ↩︎
  6. A roll of the dice: PE goes to the casino ↩︎
  7. Apollo Is Among Suitors for IGT’s Global Slot-Machine Unit ↩︎
  8. Exclusive: Inspired Entertainment in bid to buy slot machine maker PlayAGS ↩︎
Photo by Shutterstock/Vintage Tone
Derek Helling Avatar
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Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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