International Game Technology (IGT - Snapshot Report) recently entered into an agreement with Uruguay-based Rivera Casino Group to install IGT cloud at two casino sites. The partnership will allow Rivera to offer IGT’s cloud-based gaming solutions to its Manteo S.A. Rivera Casino & Resort as well as Sarandi Slots customers.
Deploying IGT Cloud in casino properties will not only give Rivera access to IGT’s vast gaming library but also help to optimize its casino operations by using IGT’s different casino management solutions and sbX analytics. The Rivera contract is IGT’s second win in Uruguay in consecutive months. Earlier in January, IGT agreed to install sbX casino management system at SALTO Hotel and Casino.
IGT Cloud has been selected by a number of International casino providers such as the Rank Group and Olympic Entertainment over the last 12 months. The popularity of the Cloud in the casino gaming industry is encouraging as it is expected to improve IGT’s top line going forward.
IGT’s gaming operations continue to suffer from sluggish macro-economic conditions in the domestic market. IGT is therefore looking for expansion opportunities in the International market. We believe that these customer wins will expand IGT’s international penetration over the long term.
The company is also gaining traction through its DoubleDown Casino, which has garnered significant attention from different land-based casino operators in the recent times. In January this year, IGT agreed to provide its entire online gaming portfolio to Belgian land-based casino operator Groupe Circus.
IGT already has relationships with operators in the United Kingdom, Italy and Denmark and this partnership further extends IGT’s presence in the European regulated online casino market. Moreover, in the domestic market, DoubleDown has secured deals from Bonanza Casino, Hard Rock Hotel and Casino and Jacobs Entertainment.
These partnerships have helped DoubleDown to achieve significant customer base in the recent past. As per IGT, DoubleDown Casino continues to remain the #3 top-grossing app on Facebook (FB - Analyst Report) , and also became the #6 top-grossing app on Apple’s (AAPL - Analyst Report) iPad in the first quarter of 2013. Moreover, average revenue per daily active user also improved from 28 cents to 30 cents in the last quarter.
We believe that increasing international expansion opportunities, an impressive product portfolio, cost-cutting initiatives, lesser dependence on the domestic machine replacement cycle, new contract wins, and a strong performance from the interactive business will drive growth in the near term. Moreover, the legal settlement with Bally Technologies is a major positive in our view.
Currently, IGT has a Zacks Rank #2 (Buy).