The U.S. Land-Based Gaming Payments Opportunity

Land-based Gaming is a Unique Fintech Vertical, Now With IGT + Everi at its Core

• Land-based gaming is a unique payments opportunity with specific product requirements, an attractive revenue profile, and specialized set of providers.
• The proposed merger combines Everi’s market-leading set of verticalized payments products with a leading CMS and games proposition (IGT).
• The combined entity strengthens Everi’s competitive moat in payments and fintech and introduces compelling expansion opportunities.
• The combined company expects to deliver sustained mid-single-digit growth and improve operating leverage over time.

Land-based Gaming Has Huge Scale, Solid Growth

• Gaming operators make more than $100B of gross gaming revenue from land—based environments (excluding online) in the U.S. alone.
• The US land-based gaming (LBG) market is significantly larger than US online gambling, but this is not consistent in Europe.
• 95%+ of LBG spend in the U.S. (excluding markers) remains cash-based. The opportunity for fintechs to drive displacement of this cash is massive.

Land-Based Gaming Payment Methods and Utility

• Casinos remain cash-based today, given its ubiquity, anonymity, and profitability for casinos (who earn most of the cash access fees).
• TITO tickets are a good cashless substitute vs. coins but have the limitations of paper.
• Cards increase velocity of funds, including the cash advance option, but come with regulatory restrictions in gaming, issuer dependencies, and high cost.
• Wallets reduce friction and cover all use cases including integrations with loyalty, KYC, and gaming systems.  Wallets are not yet reaching their potential in LBG, however, given more challenging sign-up and integration requirements, and patrons being used to cash.

Wallets Hold Massive Potential to Drive a Cashless Casino Future

• Wallets hold a massive opportunity to displace cash in LBG.  Wallets introduce powerful feature advantages for gamers (e.g. integrated loyalty), reduce friction and increase velocity for operators, and the often-native KYC helps to promote responsible gaming standards.
• However, the cash-to-wallet transition has been slow to date due to:
• Mixed operator incentives: Casinos today earn a great deal from cash access and advance fees; the shift to cashless will reduce this revenue stream. On the other hand, operators recognize the future is cashless and see the velocity benefits of a purely digital UX.
• Ingrained consumer behaviors take time to change: Casino patrons are ingrained in their behaviors for cash and tickets. Such ingrained behaviors can take many years to change. We see the operators as the key force for change with more active wallet promotions and value as the catalyst for the inevitable move to cashless.
• Various fintechs and casino platforms are competing to win the battle to own the wallet. Below we illustrate the different forms of wallets and key actors in this landscape.