Global gaming and lottery supplier International Game Technology Plc (IGT) is already making use of patents and distribution rights acquired earlier this year from Macau-based casino supplier LT Game Ltd, says a Tuesday note from Union Gaming Securities LLC.
“IGT has been successful thus far in rolling out electronic table games [ETGs] following its purchase of the LT Game patents and distribution rights,” analyst John DeCree wrote.
He added: “While ETGs may be a relatively small contributor to IGT’s bottom line today, they do fill a long-standing void in IGT’s product catalogue that we believe now positions the company to better compete in the gaming segment with a full complement of products.”
IGT’s chief executive of international, Walter Bugno, said in May that the group would be investing more resources to tap into the ETG segment.
IGT is the result of a US$6.4-billion debt-funded merger – completed in April 2015 – between International Game Technology, a Nevada-based supplier of slot machines, and Italy-based lottery equipment specialist GTech SpA. The newly-created firm reported consolidated revenue in the second quarter of 2016 grew by 1 percent year-on-year to US$1.29 billion.
In April it was announced that Hong Kong-listed gaming equipment supplier Paradise Entertainment Ltd – which produces, via the LT Game brand, electronic table games popular in the Macau market – had agreed to transfer to IGT all of its electronic table game technology, patents and other intellectual property. The exception was LT Game table game intellectual property used in Macau.
IGT announced earlier this month it had reached two independent cross-licensing agreements covering game features and system patents, namely with Australia-based slot machine maker Aristocrat Leisure Ltd and with Everi Holdings Inc, the latter a specialist in cash handling technology and electronic game content for the casino industry.
In its Tuesday note, Union Gaming stated the brokerage had an “incrementally more optimistic outlook” on IGT.
“Overall, we believe IGT is steering the course with the continued stabilisation and recovery of the domestic gaming business, coupled with tailwinds in the lottery segments. IGT management has worked hard to successfully restore both customer and investor confidence in the business, which is beginning to bear fruit both in valuation and operations,” Mr DeCree wrote.
In a release published earlier this month, Fitch Ratings Inc said several U.S.-based gaming suppliers – including IGT – were “still nursing [a] merger and acquisition hangover”. The credit ratings agency added at the time: “The historically low leveraged U.S. gaming supplier sector will need more time to recover following the debt-funded consolidation spree over the past two to three years.”
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