September 25, 2012 - 2:48 pm
Bally Technologies secured contracts to place 4,000 slot machinelike video lottery terminal in Illinois, gaining more than 50 percent of the emerging gambling market.
The company announced the deal Tuesday shortly after the stock markets closed. The Las Vegas-based slot machine manufacturer did not disclose any financial terms of the transaction.
Illinois, earlier this year, approved gaming expansion that allows bars, taverns, restaurants and convenience stores to offer VLT wagering. Bally is providing the machines to two Illinois-based distributors who will place the games in more than 1,500 locations throughout the state.
“Bally continues to make calculated investments within the video lottery terminal industry and we are confident this will result in continued incremental growth in the future,” Bally Vice President of Business Development John Connelly said in a statement.
Additionally, Bally is providing Illinois slot machine distributors with a server-based gaming system that will connect an additional 3,000 VLTs throughout the state.
The company said the games will be installed over the next 24 months.
Deutsche Bank gaming analyst Carlo Santarelli told investors the VLT sales could be worth as much as 19 cents per share to Bally’s earnings over the next two years.
“We note that our model currently contemplates a tangible, though less meaningful, contribution to earning per share versus our below calculations for Illinois,” Santarelli told investors. “Additionally, Bally noted that it obtained over 50 percent ship share at two of the largest terminal operators in the state, encouraging, in our view.”
Shares of Bally closed Tuesday at $46.79 on the New York Stock Exchange, down 7 cents or 0.15 percent.
Contact reporter Howard Stutz at hstutz@reviewjournal .com or 702-477-3871. Follow @howardstutz on Twitter.