Supplier News

US – Strong lotteries in the USA and Italy boost IGT’s quarter

By Phil - 1 August 2018

Despite missing some estimates, International Game Technology pointed to ‘another strong quarter’ with revenue down one per cent from last year to $1,202m, negatively impacted by $33m due to ASC 606 but reflecting strong lottery performance in North America and Italy.

In terms of gaming, the company shipped 1,803, up from 1,408 primarily due to Ocean Resort and Hard Rock Atlantic City openings, and MGM Springfield’s anticipated opening although this was impacted by a decline in the replacement unit decline impacted by large unit sales in Oregon and Washington in the prior year

“The strong second quarter results reflect continued global Lottery expansion that is accentuated by disciplined expense management,” said Marco Sala, CEO of IGT. “The North America Lottery and Italy segments each exceeded our expectations in the period. The North America Gaming installed base grew sequentially, and we have a compelling roster of new, for-sale video reel games coming to market in the second half. The strong start to the year gives us confidence we can achieve our 2018 strategic and financial goals.”

“With better-than-expected Adjusted EBITDA growth of 10 per cent in the first half, we are raising our full-year outlook for the underlying business,” said Alberto Fornaro, CFO of IGT. “As a result, we are able to absorb the negative impact of foreign currency translation and maintain the Adjusted EBITDA range of $1,700 to $1,780m for 2018.”

Once again Lottery results were good around the world. Outside of Italy Lottery same-store revenues were up 3.5 per cent. North America was particularly stronger rising 4.2 per cent on continued momentum in instant ticket sales.

Mr. Sala added: “We’re encouraged by the fact that much of that growth is coming from the largest Lottery, such as California, Texas and Michigan. This is the fifth consecutive quarter of at least the mid-single-digit same-store revenue expansion for instants and draw games in North America, confirming the vitality of the business. We’ve earned incentives for the Lottery management agreements we have in New Jersey and Indiana. In Italy, lotteries also performed extremely well. 10eLotto achieved another quarter of double-digit wager growth as Numero ORO and Doppio Numero ORO expand the franchise to new levels of success.

In the gaming industry, IGT’s global installed base grew five per cent from the prior year to over 63,000 machines. IGT shipped just under 7,700 gaming machines units worldwide during the second quarter and achieved notable success with titles such as Harley Davidson and the Fort Knox on the CrystalCurve cabinet. The Voice, The Goonies on the CrystalCurve Ultra, the Sphinx 4D, the Wheel of Fortune and MegaTower.

“In the second half we have a roster of games coming to market that are like Fortune Gong and for me the most important of being the Wheel of Fortune 4D,” Mr Sala said. “So the feedback we’re getting from our customers on both the new line of cabinets and the new game is positive and is also evidenced by an improved yield.

“International expansion remains the most important driver of our higher installed base,” Mr Sala explained. “We grew the North America Casino installed base by nearly 170 units compared to the first quarter. It is up two per cent in the year-to-date period both due to the new casino openings and improved demand from existing customers. We’re encouraged by this trend, and we aspect the North American installed base to be higher at year-end. New games and cabinets are driving improvement.”

In terms of sports betting, IGT’s sports betting solutions have been up and running in Nevada for 18 months and are now operational in New Jersey and Mississippi as well.

“We were also the only bidder for the state of Rhode Island’s sports betting platform,” Mr. sala explained. “The rapid deployment of IGT’s sports betting solution demonstrates that we can deliver the product, technology, support and service to make retail and mobile sports betting a reality as soon as any state legalizes this activity. We have established some important strategic partnership too. In New Jersey, Paddy Power, BetFIRST and Dual has selected IGT’s platform to power their sports betting business.”