It does not sound like IGT has any intention of exiting the US sports betting business anytime soon.
That is according to comments from CEO Marco Sala on the company’s second quarter earnings call last week.
IGT, a global gaming conglomerate that designs casino games and casino technology, provides sports betting tech and supplies lotteries with systems and products. The company reported a strong second quarter. That included adjusted EBITDA of $442 million, up 170% from Q2 last year.
IGT likes ‘consistency of our portfolio’
Analyst Barry Jonas of Truist Securities asked the question about IGT selling its sports betting business. It was a fair question considering one of IGT’s biggest US competitors, Scientific Games, announced it would sell both its lottery and sports businesses to focus on its core gaming business.
For now, it sounds like a full offering is important to IGT’s plans for the future, according to Sala:
“Overall, I think we have a consistent portfolio to start with. Our businesses are focused on delivering content and solutions to the world regulated real gaming market and this is, in my opinion, what binds them together.
“We are focused on serving governments and licensed private operators as a B2B provider and this role can expand that to comprise a full-house lottery operation where appropriate. This is just to say that we see a consistency of our portfolio and by the way, each business in our portfolio is profitable, and there’s a good growth perspective. It will generate strong cash flow, enabling a significant de-leverage in the next years.”
The digital and betting segment, which includes sports betting revenue, grew 41% over last year to $61 million in Q2. That segment also includes iLottery operations.
Speaking of Scientific Games …
Scientific Games has had good discussions and seen “strong interest” for both its lottery and sports betting businesses, according to the company’s most recent earnings call.
There are “multiple viable options” to turn both segments into shareholder value, CFO Mike Eklund added:
“We’re very fortunate in our mind to have multiple viable options to monetize both of these assets. And based on what we’re seeing, we believe we’re going to be able to unlock some real value for our shareholders in doing so.
“As we’ve talked about over the course of the quarter, we’re well along in the process and they’re all moving at a very rapid pace as you might imagine. Given the market position of these leading businesses, we’re seeing a lot of interest from the outside-in at those businesses.”
Sala not discounting value though
Sala noted having more flexibility to evaluate value-creating initiatives if something “compelling” arises.
That includes potentially breaking out IGT’s digital business as its own business segment. That is as long as “performance will be maintained at this level,” Sala said.
“So I think, I tried to provide you where we feel we are and but also providing the sense of our flexibility going forward,” he added.
IGT has pipeline of sports betting customers
The IGT brand might not be well-known by bettors and casinogoers, but its products are.
Its PlaySports technology is behind about 50 US sports betting operations, both retail and online. The most recent launch includes powering the retail and mobile sportsbook for Resorts World Las Vegas.
That footprint continues to grow throughout the country as well. IGT announced three deals to provide its tech to casinos in Colorado, Louisiana and Washington just last month.