5 QUESTIONS
Matt Sodl
Founding Partner , President and Managing Director , Innovation Capital
When Matt Sodl formed Innovation Capital , LLC with principals of
The Innovation Group , a boutique investment bank focused on gaming was something new . Now , nearly 20 years later , Innovation Capital has advised on over $ 11 billion in transaction volume within the gaming , leisure , restaurant and retail industries . Most recently , the company acted as financial advisor to Bally ’ s in its successful bid for the Chicago casino project . Sodl talks about the current economic climate and why it continues to foster opportunities for tribes and corporations alike . He spoke with GGB Publisher Roger Gros from his offices in Boca Raton in February .
1
GGB : You ’ ve got a couple of earth-shaking deals right now , especially with the Bally ’ s
Chicago deal . How did you accomplish that ? Matt Sodl : We had good fortune to be in some interesting situations over the last couple years in the post- Covid era . The Bally ’ s Chicago project was one where we and Bally ’ s assembled a great team that put together a very good project , and we were very competitive . Going into it , everyone was telling us there ’ s an incumbent in that market that is a shoo-in to get the license . But we took a good project together with good people and aligned ourselves with the right constituents and the right piece of real estate . We put a $ 1.7 billion project together , and kudos to the Bally ’ s team and Soo Kim for the leadership and creating what is it going be a flagship property for them .
2
You had another impressive announcement last month as well in Miami .
My partner Kevin Scheible was the lead on that project . He was advising the Poarch Band of Creek Indians from Alabama on their acquisition of a Magic City casino in Miami . We just opened an office in Florida a couple of years ago , and it ’ s nice to get a very large transaction done in the South Florida market . A lot of eyeballs were on that transaction because of because of the Seminoles having a monopoly on the state . But Poarch Creek saw what the opportunity is in the Miami market , and I think what they plan to do with that development opportunity is going to be pretty interesting .
3
In this current financial environment with a looming recession and high inflation , I would think that would mean making deals would be put on the back burner . But that doesn ’ t seem to be true . What are you seeing ? It ’ s a difficult environment to get to get deals done . The financing markets come in and out of favor . It ’ s a very choppy financial market . So , just when you put a deal like this together — whether it be Bally ’ s or Magic City — we have to navigate the financial markets . It means that the good transactions , the better projects are going to get done .
4
M & A activity always seems to happen whether it ’ s a good times or bad , and especially now in the sports betting field . Is that true ? When you look at the state reports of who the sports betting market share leaders are in the regional markets , it comes down to a handful of companies . There are dozens of new entrants that are trying to get a piece of what is a very small pie because the market share leaders aren ’ t going anywhere . They ’ ve built good products , they have cash resources , and they can be very aggressive from a marketing perspective . That means that these new entrants better have a unique twist on a product , or deep pockets behind them .
5
In the mainstream casino business , we ’ ve seen most of the big companies swallow each other up . Is there anything left to consolidate ? That ’ s a good question . Most of the big deals have gotten done . Caesars has pruned most of their non-core assets off and sold them . I would see perhaps some activity in the lower to mid-cap market . There are a handful of companies out there that have either , whether it be new projects that will put them on the map for some of the larger companies or some of these smaller companies who ’ ve tried to undertake some pretty large projects and haven ’ t had the most success . So you could bet that they ’ re on the radar of some distress companies looking to take advantage of an opportunity there .
“ They Said It ”
“ We continue to believe that we ’ ve got the project that will open the quickest . We ’ ll start paying New York the taxes the quickest . It ’ s in an area that doesn ’ t need zoning approval .”
— Caesars Entertainment CEO Tom Reeg , on an earnings call , predicting that the operator ’ s Caesars Palace Times Square project will be the most beneficial to New York City
CALENDAR
April 19-20 : East Coast Gaming Congress , Hard Rock Hotel & Casino , Atlantic City , New Jersey . Produced by Spectrum Gaming and Cooper Levenson . For more information , visit eastcoastgamingcongress . com .
April 19-20 : SAGSE LATAM 2023 , Buenos Aires Hilton , Buenos Aires , Argentina . Produced by Mongraphie . For more information , visit SAGSELATAM . com .
May 9-11 : SBC Summit North America , Meadowlands Exposition Center , East Rutherford , New Jersey . Produced by SBC . For more information , visit SBCEvents . com .
May 15-17 : Casino Marketing Boot Camp , General Managers Edition , Rolling Hills Casino Resort , Corning , California . Produced by J Carcamo & Associates . For more information , visit CasinoMarketingBootCamp . com .
May 23-25 : CasinoBeats Summit ( CBS ), InterContinental in St . Julian ’ s , Malta . Produced by SBC . For more information , visit SBCEvents . com .
May 23-25 : Gambling & Risk Taking Conference , Park MGM , Las Vegas . Produced by UNLV ’ s International Gaming Institute . For more information , visit unlv . edu / igi / conference .
May 25-27 : Gambling Brasil , Frei Caneca Convention Center , Sao Paulo , Brazil . Produced by Afiliados Brasil . For more information , visit GamblingBrasil . com .
June 13-15 : Canadian Gaming Summit , Metro Toronto Convention Centre , Toronto , Ontario , Canada . Produced by the Canadian Gaming Association and SBC . For more information , visit canadiangamingsummit . com .
June 20-23 : International Gaming Summit , Culloden Estate and Spa , Belfast , Northern Ireland . Produced by the International Association of Gaming Advisors . For more information , visit TheIAGA . org .
August 8-10 : OIGA Conference & Tradeshow , Cox Business Convention Center , Tulsa , Oklahoma . Produced by the Oklahoma Indian Gaming Association . For more information , visit oiga . org / tradeshow .
8 Global Gaming Business APRIL 2023