Supplier News
US – Gaming product sales help drive IGT’s growth in Q3
By Phil - 15 November 2019
A ‘sharp growth in global gaming product sales’ helped drive IGT’s revenues to $1.15bn, up three per cent, in the third quarter.
Product sales revenue of $107m, up 36 per cent ‘overcame significant Finland multi-year software sale in prior-year quarter and impact of higher machine gaming taxes in Italy.’
This was driven with gaming product sales which with revenues of $91m were up 46 per cent with 1,547 Sweden VLTs proving significant internationally. There was also a significant increase in replacement units driven by strength of product offering with a higher average selling price.
Marco Sala, CEO of IGT, said: “Our core businesses achieved significant momentum in the third quarter and year-to-date periods. Key performance indicators were solid in the quarter – gaming machine unit shipments increased 44 per cent, while same-store revenue for draw games and instants rose four per cent. Our leading positions are rooted in our focus on player-driven performance, which was on display at recent lottery and gaming trade shows and should sustain our momentum going forward.”
Global gaming machine unit sales were especially strong in the period. Free cash flow was robust, reaching a record of $456m for the first nine months.
Mr. Sala highlighted the strength of IGT’s North American lottery product sales in the last two quarters. “Our expanding suite of self-service machines drive great interest from our customer at recent trade shows,” he said. “Our GameTouch 20 self-service sells a mix of broad-based games, instant tickets and multi-state jackpot games and is meant to serve the big box national retailers. So far, about 1,200 units have been deployed across 10 states, with additional states expected to roll it out next year. Our GameTouch draw cabinet, inspired by a device we use for sports betting in Italy and Rhode Island provides us a service for broad-based games with a focus on Keno. It was developed to facilitate retailer adoption in restaurants, bars and other social spaces. Channel expansion is key to driving future lottery revenue growth, and that is what these products are all about.”
The company has had some significant lottery contract wins and extensions over the last several months. IGT was selected to provide both lottery technology and instant ticket printing for the new Mississippi lottery. It has signed multi-year extensions in Colorado, Minnesota and Kentucky, and recently agreed a five-year management and product contract with the Oregon lottery. Its 50-50 joint venture was recently awarded the 15-year Brazilian Lotex license.
“This is a major step towards the privatisation of lottery instant games in Brazil, the world’s eighth largest economy. It’s also an important window into other opportunities as Brazil further opens regulated games,” Mr. Sala added.
Alongside lottery growth, commercial gaming replacements increased in the double digits, with demand high for IGT’s CrystalCurve and Crystal 27 cabinets.
Mr. Sala added: “We have begun rolling out our new Cobalt cabinet developed to raise our profile in Eastern Europe, and we are seeing interest for other regions as well. The North American installed base remains stable and is generating higher yields. The Wheel of Fortune Cash Link and 4 B titles continue to command incremental placements. The early indications for our recently launched The Price is Right games are good.”
He highlighted the company’s core video offer as being an important driver of the 38 per cent increase in year-to-date global unit shipments, highlighting Wolf Run and Hexbreaker as being particularly strong and singling out Hexbreakers 3 as being ‘one of the most anticipated titles coming out from the [G2E] show.
He also highlighting launches such as Lucky Buddha and Magic of the Nile alongside nine Multi Level Progressives launched at G2E along with a new family of Peak Cabinets.
“We are launching the PeakSlant with extensions of 2 proven brands, Scarab Link and the Wheel of Fortune Mystery Link. G2E was also a big show for video poker where we featured a total of 4 different form factors, including the new PeakBarTop and Cobalt cabinets, providing world-class solutions to all types of venues around the world. The response is very good, especially for the PeakBarTop. And we are well positioned to maintain our leadership in this area,” Mr. Sala added.
In terms of sports betting Mr. Sala highlighted that in just one-and-a-half-years, IGT is now powering 35 casino-based sportsbooks in 11 states. Its mobile offer is active in seven states.
“IGT PlaySports technology accounts for nearly half of New Jersey and Pennsylvania’s total sports betting angle, which is a testament of — to the stability and scalability of our technology,” he said.
He also highlighted IGT’s recently launched PlaySports Bank and PlaySports Pod, the first-ever completely self-standing ‘sportsbooks in a box.’ There are currently over 200 self-service IGT’s PlaySports machines installed in sportbooks around the United States with Pearl River Resort in Mississippi becoming the first to install IGT’s CrystalBetting Terminal on field trial there.
Alberto Fornaro, CFO of IGT, added: “IGT has generated free cash flow in excess of $450m in the first nine months. This confirms the inflection we expected to achieve this year. We are well positioned to achieve our 2019 strategic and financial goals.”
Caption: Marco Sala
