IGT Wins New Deal in Las Vegas - Analyst Blog

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International Game Technology 's ( IGT ) DoubleDown Casino secured its first land-based deal in Las Vegas as it entered into a partnership with Hard Rock Hotel and Casino. IGT would provide DoubleDown's portfolio of online casino-style games that can be played on the hotel's website.

The partnership with IGT is expected to enhance Hard Rock Hotel's entertainment value, since players can stay attached to the casino virtually. DoubleDown would be providing online games such as Da Vinci Diamonds, Cleopatra slots and multi-player poker. More exciting games will be added to its offerings over the next few months.

This deal is similar to the one with Jacobs Entertainment that was signed last month. The popularity of the DoubleDown platform is encouraging, enabling IGT to generate incremental revenue in the long run.

IGT is a comparatively new entrant in the online social gaming market. We believe that DoubleDown's strong product portfolio and customer base will help it to garner new partnerships that would provide a competitive edge over other established players.

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 will drive growth going forward.

Moreover, the company is keeping pace with the technology demands of the day and has made headway with its IGT Cloud. 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, we believe that the increasing investment in product development will drive operating costs, which will remain an overhang on the stock in the near term. Moreover, fewer new openings and increased competition from Bally Technologies Inc. ( BYI ) and WMS Industries Inc. ( WMS ) will keep the stock range bound in the near term.

We have a Neutral recommendation on the stock over the long term (6-12 months). Currently, IGT carries a Zacks #3 Rank, which implies a Hold rating in the short term.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BYI , IGT , WMS

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