International Game Technology (IGT) will provide its online and mobile games to Betsson, a Maltese sports betting and gaming company. Betsson will have access to IGT’s wide array of free-to-play and casino style games through IGT’s remote gaming server (IGT rgs).
IGT will offer popular game titles like Cleopatra, Da Vinci Diamonds, MONOPOLY plus and 100 Pandas to Betsson. These mobile-based games are compatible with Apple’s (AAPL) iOS devices as well as with Google’s (GOOG) Android-based devices, enabling the game to reach out to a large number of gamers.
Recently, IGT entered into a similar partnership to provide online games with Mr. Green, a Swedish online casino operator. We believe that IGT’s diversification in the mobile segment is a long-term positive strategy.
According to the market research firm, BI Intelligence, the U.S. social gaming market (including mobile games) is expected to increase more than two-folds from approximately $2.0 billion in 2011 to approximately $5.5 billion by 2015.
Though IGT is a comparatively new entrant in the online social and mobile gaming market, we believe that the company’s strong product portfolio and its customer base will provide it a competitive edge over other established players.
We believe that IGT will benefit from new contract wins along with an improving domestic gaming environment, international expansion opportunities, an impressive product portfolio, reduced dependence on the domestic machine replacement cycle and strong growth from the interactive business, going forward.
Additionally, the company is keeping pace with technology demands and has made a headway with its IGT Cloud offering. We expect the IGT Cloud services to gain traction in the casino gaming industry, as it is expected to be well received by new casino properties, thereby improving the company’s top line.
However, increasing competition from Bally Technologies Inc. (BYI) and higher operating costs due to investment in product development are headwinds, going forward.
Currently, IGT has a Zacks Rank #2 (Buy).
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