US Market Favors IGT

At this stage no knows exactly when internet gambling will be legalized in the United States of America. The question that has been asked many times in forums which company will supply land-based casinos with slot content and will they also provide internet casinos with the same content? Alternatively will these organizations also start their own internet gambling portals in order to gain a larger share of the pie from their present clients?

One of the main suppliers of slot machines to land-based casinos is International Game Technology (IGT). It provides content to internet casinos via its internet casino software division WagerWorks. IGT indicated its intentions earlier this year when it purchased Double Down Interactive a social gaming provider.

Double Down Casino is active on Facebook. However, IGT stated that it has no intentions whatsoever of starting an internet casino, it said it would rather use Double Down as a vehicle to market its gaming software to potential clients. At times we think IGT might contradict itself since it just launched a free-play version of its slots game based on the well-liked television series American Idol on Facebook. It aims to induce players to wager with real cash the moment this slot game goes live at internet casinos.

Janney Montgomery Scott gaming analyst Brian McGill said that the manner in which IGT currently operates might compromise its relationship with clients from land-based casinos. Last month Joel Simkins gaming analyst from Credit Suisse notified IGT’s management that some of the company’s major casino customers are not too happy with the idea of IGT becoming a potential major player. Patti Hart IGT Chief Executive Officer responded to this allegation and said that IGT had a close-knit relationship with the majority of her casino operator clients. Even if some of our clients decided to stop buying our software it won’t “break the balance sheet”.

Simkins gave his view as to how he sees it. He says IGT’s client base is diversified and quite strong especially in the regional and Native American gaming markets and there’s no reason to be concerned at this stage. IGT has a huge competitive advantage since it uses Double Down as a display platform. He also believe that in the near future IGT will have the competitive edge since it will be able to provide content for new internet slot machines at a fraction of the cost its competitors currently provide. It goes without saying that should the US decide to regulate internet gambling again IGT will be in a very strong position indeed.



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