Lottomatica sports-betting up but IGT hit by social decline

IGTsala
Marco Sala – IGT Plc

Lottomatica’s sports-betting operation in Italy enjoyed 7% growth in wagers in the third quarter benefitting from the second-half of the European Championships falling in the period, however parent company IGT’s results were marred by a significant fall in social casino revenues.

The company gave very little further detail other than suggesting the sports-betting business helped contribute, alongside the company’s lottery business, to a 12% rise in third-quarter operating income.

More attention was paid in the conference call to the regulatory situation in Italy with regard to gaming machines. Chief Executive Marco Sala suggested the company was talking to the authorities in Italy about the potential for a reduction in the amount of AWPs in the country.

Sala told analysts on the call: “It’s an ongoing discussion between the government and the regional administrations that is lasting nearly for one year and and there are still a lot of unknowns.”

The CEO further added: “It is difficult at this point in time to predict the outcome, but we do not expect anything to dramatically impact our business. In other words, if the 33 percent reduction of the total number of AWPs is to happen by the end of 2017, we do not expect any major impact on wage earnings. We believe that the total number of outstanding machine is still sizable and able to capture the overall demand.”

On the social casino front, IGT’s DoubleDown operation hit trouble in the third quarter, helping to push operating income for the North American and interactive segment down to $66 million from $85 million.

The company said the prospects for the social casino business remained challenging and that competition in the space had intensified. The company will be attempting to refocus and regain leadership in what remains an attractive market, however, it said the turnaround would not be immediate.

The company said the prospects for the social casino business remained challenging and that competition in the space had intensified. The company will be attempting to refocus and regain leadership in what remains an attractive market, however, it said the turnaround would not be immediate.

Overall, IGT’s revenues rose 5% in the three months to $1.27 billion while companywide operating income rose 26 percent to $164 million.

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