Everi Holdings hasn’t always been the easiest company for the investment community to understand.
Born out of the 2014 buyout of slot machine maker Multimedia Games by payment processing business Global Cash Access for $1.2 billion, Las Vegas-based Everi was at a crossroads when it plucked Mike Rumbolz from the boardroom and sat him in the CEO’s chair nearly three years ago.
Times have changed somewhat since then.
Everi CEO Mike Rumbolz, right, discusses the state of the industry with former AGA CEO Geoff Freeman at the 2017 G2E. (Photo via Las Vegas Review-Journal)
This week’s Global Gaming Expo is not so much a coming out party for Everi but a statement to the industry about the company’s prospects once the tradeshow and conference concludes.
Last month, Everi held an investors presentation in Chicago, which seemed to satisfy analysts in attendance that the gaming equipment supplier is heading in the right direction.
“All told, the day met our expectations,” Stifel analyst Brad Boyer wrote in a research note. “It further distanced Everi from its uneven past and effectively conveyed to investors the breadth and depth of product and services offerings in the (financial services) and games segments.”
Jefferies analyst David Katz also came away with the view that Everi is on an upward path. He said the company “provided a long-term growth trajectory that confirms our positive view and warrants a peer-level valuation. Given the strength indicated in the company’s gaming business, we consider the reasonable prospects for further upside.”
Much of the credit goes to Rumbolz, one of the most respected gaming executives in the industry.
Rumbolz, 64, has helmed both manufacturers and casino operators. He was also a top-shelf Nevada gaming regulator in the 1980s – the youngest-ever chairman of the Gaming Control Board. He seemed destined for a career in politics, possibly Nevada attorney general or even governor.
Instead, he took an offer from Donald Trump to help oversee the future president’s casinos in Atlantic City, including directing the launch of the Trump Taj Mahal.
With Everi, Rumbolz and his team are navigating much different waters, explaining and helping to define the convergence between gaming machines and the financial transaction business. In the lead-up to G2E, Rumbolz and the company did a solid job addressing both areas.
Multimedia Games was a slot machine provider that had rebounded from a near-death experience when it was acquired by Global Cash Access. But the CEO preceding Rumbolz had trouble merging the businesses together, and the board wanted a change.
Everi added Dean Ehrlich – a former Anchor Gaming and WMS executive – to oversee the games division in January 2017. At G2E, Everi is rolling out a new platform and cabinets for 2019 as well as introducing new themed games based on the films The Mask and The Karate Kid.
“Our investments over the last several years in developing new gaming entertainment solutions and experiences for players have significantly expanded the areas of the slot floor we address,” Rumbolz said in a statement.
Katz told investors that Everi’s games segment is “the key value driver” for the company, given that Multimedia Games was acquired at an “ambitious valuation.” He said the company expects to grow its share of slot machine sales by 5 percent to 10 percent both in 2019 and 2020.
“This growth is intended to be driven by investments in new content, including third-party licenses and cabinets,” Katz said.
In the financial transaction division, Rumbolz said Everi continues “to help casino operators maximize funds delivered to their casino floors while providing their guests with a seamless experience.”
He added that Everi’s equipment processes more than 100 million transactions annually across a secure network that drives roughly $27 billion to casino floors.
“Our customers know that our commitment to innovation results in products that improve the efficiency of their cash access operations,” Rumbolz said. “(We) provide them with the ability to make proactive and informed decisions around player behavior, such as through our Anti-Money Laundering (AML) compliance solutions.”
Katz called the financial transaction side “the most misunderstood aspect” of Everi.
Boyer said the company continues to seek out opportunities “to accelerate the growth within and widen the moat” around its core cash access offerings.
“At the same time, (Everi is) pursuing initiatives to ensure the business endures if and when cashless gaming comes more prominently into play,” Boyer said. “Drilling down further, we believe that the investor day (presentation) conveyed to investors that Everi is not a company resting on its laurels.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
