Executives for one of the key players in sports-betting technology say it’s going to take time before the company establishes consistent cash flow from the fledgling industry.
Marco Sala, CEO of IGT, which dominates slot-machine manufacturing and international lottery sales and now looks to make its mark in sports betting, said there’s no timetable yet for consistent sports betting revenue streams.
“I think it takes time,” Sala said in response to an inquiry in Wednesday morning’s company conference call on third-quarter earnings. “We need to see how the regulation will evolve. But we are positive because of the progress we’ve made with 20 properties in Nevada, New Jersey, Mississippi and West Virginia.”
IGT provides the sports-wagering technology and mobile applications for MGM Resorts International, recently installing a system at Borgata in New Jersey. On Tuesday, MGM CEO Jim Murren said in that company’s earnings call that Borgata’s sports wagering is doing as much business as its Nevada counterparts.
IGT Chief Financial Officer Alberto Fornaro said every sports wagering contract it has is different, with IGT receiving fees for every bet taken in some of its deals.
Sports betting was legalized in May following a U.S. Supreme Court ruling and has since been rolled out in five other states besides Nevada in the summer and early fall. Because it is relatively new and contract terms differ by company, it’s unclear how much revenue IGT eventually could generate.
IGT also announced a partnership with British gaming giant William Hill in September and the two companies are expected to be the sports-wagering contractor for Rhode Island when that state rolls out sports betting through its lottery business.
IGT surpassed Wall Street analysts’ expectations on earnings by 1 cent, but fell short of revenue projections.
For the quarter that ended Sept. 30, IGT reported net income of $22.3 million, 11 cents a share, on revenue of $1.156 billion. That compared with a loss of $803.6 million, $3.95 a share, on revenue of $1.221 billion for the same quarter in 2017, a time when IGT was restructuring the company.
“Global Lottery same-store revenues for instants and draw games rose mid-single (percentage) digits,” Sala said during the conference call. “The installed base of gaming machines was up, and unit shipments of gaming machines increased 10 percent. And, we enjoyed particularly strong sales and profit growth in Italy, confirming the vitality of that important market. We are firmly on track to achieve our 2018 financial and operational goals.”
Investors responded positively on Wall Street Wednesday. IGT shares closed up more than 15 percent to $18.55.
Third-quarter revenue and earnings for London-based IGT, which has a major presence in Las Vegas and Reno. (NYSE: IGT).
3Q 2018: $1.156 billion
3Q 2017: $1.221 billion
3Q 2018: $22.3 million
3Q 2017: ($803.6 million)
Earnings/(loss) per share
3Q 2018: 11 cents
3Q 2017: ($3.95)