Italian lottery and gaming technology supplier GTECH enjoyed a “robust” Q4 thanks to strong product sales in its Americas and International markets.
Revenue in the three months ending Dec. 31 hit €809.5m, up 4.7% year-on-year. Earnings were up 6.7% to €281m but the company reported a net loss of €92.8m due to one-off costs, including those associated with GTECH’s $6.4b acquisition of US gaming device maker and social gaming operator International Game Technology (IGT). Excluding those one-offs, net income rose 83% to €53m.
The Americas segment reported revenue up 10% to €252m largely on strong VLT sales in Oregon. Healthy instant ticket sales also helped to offset a decline in multistate jackpot lottery sales. Since the quarter ended, GTECH expanded the Georgia Lottery’s online options and inked a deal with casino operator MGM Resorts to build GTECH’s first Nevada sportsbook and on-premise mobile gaming deployment.
The International division saw revenue rise 34% to €113m, thanks to product sales in Belgium, higher machine sales to casino customers in EMEA (Europe, Middle East and Africa) and higher systems sales in Europe. The quarter saw GTECH awarded up to 5,550 of Greek betting operator OPAP’s initial 16,500 new video lottery terminals.
In GTECH’s home market of Italy, revenue dipped 3.5% to €434m due to a higher sports betting payout. Sports betting revenue fell 18% to €36m although betting handle rose 7% thanks to increased virtual betting. Lotto wagers rose 4% while machine gaming revenue fell by €3m to €148m.
Total interactive gaming services revenue rose 7% to €28m, driven by gains in the Americas (€2.6m) and International (€6.9m) segments, while Italian interactive gaming revenue dipped 7% to €18.5m. Interactive product sales in the International segment nearly tripled to €1.7m.
HIGH 5 GAMES SUES IGT
GTECH said it expects to finalize the IGT acquisition next month, after which GTECH will rebrand as IGT. In less positive news, developer High 5 Games is suing IGT for allegedly violating their licensing agreement and failing to pay adequate royalties. The lawsuit was filed on Tuesday in US District Court in Chicago.
High 5 Games and IGT inked their first deal in 2003 and things went well enough that the parties re-upped in 2008. But as that deal was expiring in 2011, High 5 says the companies had a falling out over improper game distribution. The lawsuit says that after “nearly a year of settlement discussions, IGT offered to enter into a new agreement, which came to fruition in 2012.”
But things quickly went south. The lawsuit claims IGT “failed to make certain payments owed under the now-terminated agreement, has failed to cease distribution of certain unauthorized, modified games, and has failed to abandon, cancel, or assign to [High 5] certain trademark filings.” High 5 is seeking unspecified damages and for IGT to stop using its games on land-based slots and the DoubleDown Casino social gaming operations.
