Will IGT Join the Online Gaming Industry?
International Game Technology (IGT) premiered the popular talent contest American Idol on Facebook and had announced that one day they wish to be able to put an interactive version of their slot machine on the Internet.
There are tons of online gambling companies offering services to players in the UK mostly and they have even conquered the world of mobile casino. The current technology allowed them to create state of the art casino games for the computer and mobile phones. This had been a big hit backed by the number of players online.
In the US, state and federal makers are considering the above due to the legalization of online gaming. IGT, large slot machine makers and many casino companies in the US are already lining up for the potential action in store for them just in case permits in the US are granted.
The issue however isn’t about the legalization but what’s in store for those who provide the technological bones of the gaming industry. Surely it will be a massive hit when it’s finalized but people wonder how much they will keep for themselves.
Analysts and investors have speculated openly whether slot machine companies and other gaming product vendors will be satisfied just to provide content for casino operators to use on their Internet gaming websites. They wonder whether equipment makers are prepared to manage their own Internet gaming portals and potentially compete online with the same casino companies that buy their slot machines.
WMS Industries officials said the company is following a business-to-business model to provide online casinos with slot machine themes and titles.
“We have made significant progress in our development of a technology and entertainment content base that will help our customers unlock the emerging opportunities provided through online capabilities,” WMS President Orrin Edidin said when the Waukegan, Ill.-based slot machine maker applied for a Nevada Interactive gaming license last month.
IGT said that the company had no plans to operate an online casino but their move to acquire social gaming provider Double Down Interactive for $500 million says otherwise. Double Down was the one responsible for creating Facebook’s Double Down Casino.
Regarding this issue, IGT said that they would only use Double Down for introducing its content to a new audience.
“The Double Down purchase is still being digested by investors who have questions about the benefits of the purchase and IGT’s relationship with its brick-and-mortar customers,” Janney Montgomery Scott gaming analyst Brian McGill wrote in a research report. “We do expect the interactive business to become more transparent over time as the results begin to be broken out separately.”
Credit Suisse gaming analyst Joel Simkins, following a series of investor meetings with IGT management last month, said some of the company’s major casino customers had complained about the slot maker as a potential competitor.
IGT already has a presence in Europe. Last year it paid $115 million for Entraction Holdings, a Swedish online poker network operator.
IGT Chief Executive Officer Patti Hart told Credit Suisse investors that most of the company’s casino operator relationships remain strong, and that any loss in games purchased by IGT’s unhappy customers won’t break the balance sheet.
“(IGT) has a diversified customer base, with strong relationships in the regional markets and in Native American gaming,” Simkins wrote in the report. “We tend to agree with this view and believe hemming and hawing by certain customers is more smoke then fire.”
Up until now, the motives of IGT are still unclear on whether they only want to provide games toward online casinos or be included in the online casino industry.
Source: Casino City Times