Las Vegas-based Global Cash Access Holdings received some good news Thursday, a day after the company announced it was losing its biggest customer.
Global Cash won approval from the state Gaming Commission to upgrade the company's casino-based ATMs so customers can get cash or ticket in-ticket out vouchers that can be used in slot machines.
Global Cash Chief Executive Officer Scott Betts said the technology does not change how customers spend their money at casinos.
"We're simply trying to provide what we believe is a very sound business opportunity," Betts told regulators. "Its a natural progression for technology that's already out there."
The technology, called Quikticket, is expected to increase casino safety and security by reducing the amount of cash handling on casino floors, Betts said.
Global Cash plans to begin limited live testing of Quikticket later this year, Betts said after the hearing, and the company is seeking approval for Quikticket in other jurisdictions.
The approval comes a day after it was announced that Harrah's Entertainment was not renewing its contract with Global Cash for ATM and other cash-access services.
Harrah's is Global Cash's largest customer, accounting for 14.1 percent of the company's $667.7 million in revenue last year.
The gaming giant did not tell Global Cash why the contract, which expires Nov. 30, was not renewed or who will be replacing the company's services, Betts said during an investors' call Wednesday.
"I do not know what the specifics of Harrah's decision were," Betts said. "I do know the pressures on companies in the gaming sector today are enormous."
Harrah's spokeswoman Jacqueline Peterson said the gaming giant put out a request for proposals and decided to go with a different provider. She declined to discuss who is replacing Global Cash.
Global Cash held the investors' call while the company's stock price was in the midst of a 44.5 percent decline following the news.
Company stock dropped to a 15-month low of $3.46 per share before closing at $3.68 on the New York Stock Exchange on Wednesday, down 20 cents, or 5.15 percent. Volume surged 14.2 percent. The stock had closed at $6.99 on Tuesday.
In after-hours trading, Global Cash shares fell 1 cent, or 0.27 percent, to reach $3.68.
In a note to investors, Roth Capital Partners senior research analyst Todd Eilers wrote that the loss of the Harrah's contract was due to quality, development and service as much as lower pricing.
"We believe the Harrah's contract loss will likely serve as a wake-up call for (Global Cash), and we suspect the company will refocus its efforts on improving its core product functionality," Roth said. "However, it might be too late for any potential near term deals on the horizon like MGM."
Contact reporter Arnold M. Knightly at email@example.com or 702-477-3893.