Supplier News

US – IGT already in shape for North America’s sports betting revolution

By Phil - 23 May 2018

With revenue up across all its business divisions, International Game Technology looks in good shape as it positions itself for a new era in sports betting following the US Supreme Court’s decision to allow betting beyond Nevada.

IGT CEO Marco Sala highlighted that the company was already offering ‘a regulator-certified sports betting solution that is up and running at MGM’s casinos in Nevada.’

It is also the sole bidder to run Rhode Island’s potential sports betting operation and has a sports betting system in Italy that can support a “full-scale operation” or a kiosk-type retail format through its Lottomatica divisions.

Mr. Sala said: “In the US, we already provide a regulator-certified sports betting solution that is up and running at MGM’s casinos in Nevada. This solution is comprised of both land-based retail sports betting platform and the PlaySpot, our mobile solution. Ultimately, the opportunity will depend on how many states choose to allow sports betting, how quickly they do so, and how the regulations will shape the offer. Having said that, we have a longstanding deep relationship with the US casino operators and state lotteries, and have been actively engaged with them and government authorities to support shaping a safe and sustainable offer. We feel that we have the know-how to provide a turnkey solution.”

Deutsche Bank Analyst Carlo Santarelli believe the company is in a good position.

“While IGT has been less vocal, relative to peers, as it pertains to the sports betting opportunity, we believe the customer relationships and broad offering suite position IGT well for incremental gains from the evolving sports betting environment,” Mr. Santarelli said.

Whilst IGT’s first quarter ended disappointingly with a net loss of $103m, compared to a net loss of $54.8m the year previous, its revenues did increase by 5.2 per cent to $1.21bn from $1.15bn.

Global lottery growth was an important driver in the quarter with sales increasing 24 per cent in North America whilst jackpot games increased over 50 per cent, helped by both Powerball and Mega Million.

“Compelling content and technology solutions are driving our results,” Mr. Sala explained. “Lottery same-store revenue growth was among the highest levels in the last several quarters, even in our largest markets. A sharp increase in systems sales, double-digit growth in global gaming machine replacement unit shipments, and sequential improvement in the North America installed base confirm the good momentum of our global Gaming business. The positive underlying contribution from each of our operating segments provides a strong start to the year. Jackpots were an important element of the performance in North America and International segments, but the underlying contribution of instants and draw-based games was also very good around the world.”

Gaming product sales increased 29 per cent in the quarter driven by strong systems sales, higher gaming machine unit shipments, including double-digit growth in replacement units. IGT installed its Advantage casino management system with Resorts World Catskills in Monticello, New York, and at MGM Cotai in Asia.

IGT installed 2,112 gaming terminals, an increase of five per cent from a year earlier despite significantly less new casinos. It enjoyed 40 per cent growth in replacement units due to greater sales to Latin America, Australia, and New Zealand. The company expects profits will be more weighted to the second-half of the year based on the timing of Sweden and Canada VLT sales in the fourth quarter.

IGT CFO Alberto Fornaro said: “We continue to expect profits will be more weighted to the second-half of the year based on timing of Sweden and Canada VLT sales in the four quarter. We are solidly positioned to achieve our 2018 strategic and financial goals. With revenue growing five per cent and Adjusted EBITDA up 18 per cent, our first quarter results are some of the best we’ve reported.”

Mr. Sala highlighted the rollout of new games such as Harley Davidson, Fort Knox, The Voice, The GOONIES, SPHINX 4D, in the CrystalCurve and the CrystalCurve ULTRA cabinet, and Wheel of Fortune MEGATOWER as being a good contributor to the results.
“We feel that these titles continue to expand, and we have a full lineup of new games coming to market throughout ’18, that includes new titles such as Fortune Gong, Money Storm, Wheel of Fortune 4D,” he said.

Caption: The sportsbook in the MGM Grand