Apollo Global Management Increase Bid for Tabcorp

Earlier this month, Apollo Global Management increased its bid to $3,1 billion for the Australian-based media and sports betting businesses, TabCorp. Despite the increase of the bid, industry analysts believe that the private equity firm’s gestures of good faith will have no effect on it’s lack of direct experience with operating a sportsbook. It is possible that this lack of experience could put a spanner in the works for Apollo.

Apollo’s Ambitions

While Apollo Global Management has not had any experience in directly managing a sportsbook before, the firm is no stranger to the ins and outs of the gambling industry. Recently, Apollo acquired the Great Canadian Gaming Corporation and is working closely with VICI properties to ensure it’s purchase of the Venetian and Sands Expo and Convention Center in Nevada, Las Vegas for a whopping $6,25 billion. At the end of last year, Apollo forked out 1,15 billion to IGT for its Gamenet Group. The Gamenet group is an Italian gaming, digital gaming and sports betting operator.

As part of it’s existing bid for TabCorp, Apollo has offered the sportsbook brand a further $500 million to be used on the company’s gaming and services unit. This is a business that was not formally included in the strategic review that the operator launched. A gaming analyst has referred to the undertaking as an added sweetener to ensure that the deal gets done. Without the addition of the $500 million, Apollo’s bid matched a revised bid from Entain Plc for Tabcorp’s group of subsidiaries at $2,7 billion.

Complications Expected

Should Tabcorp agree to selling Apollo the media and sportsbook arms of its company, several regulatory issues in Australia could still weigh heavily on the success of the purchase. Industry analysts have shared more detail regarding the complications. According to an interview, the change of control provisions for TabCorp’s agreements with several racing bodies is likely to complicate the matter, which is already complex, and will take some time to negotiate through.

Australian regulators have not made it immediately clear whether they have a preference for companies that have already established themselves locally. If this is the case, Entain has a greater chance since it is already licensed in Australia while Fox has deep ties to many Australian companies. Either one of these companies could be more preferred than Apollo for regulators.

In addition to this, Entain operates sportsbooks all over the world and is expanding in the US with its 50% share in BetMGM.

Apollo Requires Sports Wagering Exposure

Whether Apollo will emerge successful and be the new owner of TabCcorp’s sportsbook has yet to be decided. However, it is clear that Apollo is looking to earn sports betting experience and improve it’s profile on a more global scale.

The private equity firm does not just own the Gamenet Group but is also vying to acquire William Hill’s operations that are set to be auctioned off soon. The acquisition of the Great Canadian Corporation will allow Apollo to benefit from single-event wagering while the recent purchase of Yahoo! gives the company control over one of BetMGM’s media partners, Yahoo! Sports.