International Game Technology
) 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
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
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.
WMS Industries Inc.
) 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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