IGT name among valued assets being acquired by GTECH

GTECH Holdings is paying $6.4 billion to acquire International Game Technology, but the Italy-based lottery giant is taking on more than just “Wheel of Fortune” and the company’s other slot machine titles and products.

GTECH wants the name IGT.

At last week’s Nevada gaming regulatory hearing, GTECH Chairman Lorenzo Pellicioli revealed the merged company will be known as IGT when the buyout closes in April. The holding company that combines GTECH and IGT will operate under the name International Game Technology PLC.

The name GTECH will slowly disappear. Analysts believe it’s a smart move.

“Within the equipment world, outside of Italy, IGT has a well-known reputation that overshadows GTECH’s and, more importantly, can help grow market share going forward,” Macquarie Securities gaming analyst Chad Beynon said.

Union Gaming Group analyst Chris Jones said GTECH has limited recognition globally.

“It makes a lot of sense,” Jones said. “The most important gaming markets, such as North America, Australia and even Asia, are more aware of the IGT name than the GTECH brand.”

Within the casino operating community, however, IGT will mean nothing unless the products change.

During Caesars Entertainment Corp.’s quarterly conference call Monday, Chairman Gary Loveman summed up the feelings of casino operators: Current slot machine offerings are out of date with today’s consumer.

“I remain very concerned that the product is antiquated as a category,” Loveman said.

Caesars Interactive Entertainment, the company’s online gaming division, does a better job than traditional slot machine manufacturers, Loveman said.

“They innovate remarkably fast and improve their product and how it is enjoyed by their customers constantly,” Loveman said. “I think there is tremendous opportunity there.”

Gaming Control Board Chairman A.G. Burnett agrees. Nevada lawmakers are considering Senate Bill 9, which allows manufacturers to incorporate video game technology into slot machines. The idea is to create more games of skill, rather than just games of chance.

Burnett told KNPR’s “State of Nevada” that casinos need to find ways to get new customers in front of slot machines.

“Hopefully they’ll be attractive to the younger demographic, which is now visiting in record numbers,” Burnett said. “To do that, old-style gaming is going to have to make way for some new ideas.”

So the gauntlet has been thrown down to the new IGT.

GTECH — and soon to be IGT CEO — Marco Sala told regulators last week the company understands that task.

The GTECH-IGT merger allows game titles to be used across multiple platforms — traditional slot machines, social gaming, Internet gaming and lotteries. Similar products on different platforms reduces research and development costs. The merger is expected to save $280 million in corporate costs.

IGT has been responsible for many of the products and concepts now considered common on slot machine floors such as video poker, ticket in-ticket out technology, progressive jackpots, and Megabucks.

IGT introduced the “Wheel of Fortune” slot machine in 1996. The game is still one of the industry’s best games.

In 2012, IGT CEO Patti Hart was criticized by the investment community after she engineered the $500 million buyout of DoubleDown Casino, a social gaming giant considered the leading free-to-play site on Facebook and other platforms.

Most of those critics soon ate their words. DoubleDown and IGT’s social gaming business is profitable and a meaningful contributor to earnings. DoubleDown includes many popular IGT game titles, including “Wheel of Fortune.”

Combined, GTECH and IGT would have produced more than $6.1 billion in revenue and almost $2.1 billion in cash flow over a 12-month period that ended last September. GTECH, however, dominates the combined companies’ financial pages, primarily through the Italian lottery business. Postmerger, 39 percent of the overall revenue will come from Italy.

“The remaining pie, we believe can grow though IGT’s relationships and reputation, which in many ways is important enough to maintain the legacy IGT brand name,” Beynon said.

IGT was founded in 1975 by slot machine pioneer Si Redd. By 1989, the company estimated it produced one-half of the world’s 300,000 slot machines. In the late 1990s and early 2000s, IGT bought several rival slot machine and gaming technology companies, helping to strengthen its position as the global slot machine leader.

Then the recession hit.

IGT’s stock price is more than 60 percent below its 2005 average closing figure. The company’s revenue declined 27 percent in just two years while it over-spent on technology and innovations at time when casino operators were holding back on spending for new games and products.

Competition caught up. Last year, analysts declared Bally Technologies the leading gaming equipment provider.

Those rough periods seem to be forgotten.

“Despite what one’s view is of IGT products today, the legacy of IGT is undisputed,” Jones said.

Howard Stutz’s Inside Gaming column appears Wednesdays and Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. Find him on Twitter: @howardstutz.

ad-high_impact_4
Business
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like