International Gaming Technology (IGT) recently made a big move to allow it to focus further on its lottery business.
IGT will merge its PlayDigital (digital gaming) and Global Gaming (slot machine) businesses with Everi Holdings in a $6.2 billion deal that was announced late in February.
The lottery business for IGT, however, will continue in-house under a new name, which will trade publicly while maintaining its home in London. In other words, IGT will become a “pure play global lottery business” under whichever name it adopts, as Marco Sala, IGT Executive Chair of the Board, said in a statement, while a blend of companies will oversee the other arms of the business.
The transaction is expected to be completed in late 2024 or early 2025.
IGT feels the decision to shift the businesses allows each to pursue enhanced organic and inorganic growth strategies.
One thing is clear: IGT feels very good about its lottery businesses, especially with what it did in Q4 of 2023.
IGT lottery revenue increases 7% in Q4
In Q4 of FY 2023, IGT saw a 7% jump in revenue in its lottery division. For the full year, IGT had 6% growth from lottery.
That growth equated to $681 million, up from the $639 million IGT did in Q4 of FY 2022.
While total revenue was down 2% for the year from lottery, IGT still has its sights set on more development in the upcoming year.
“Lottery is a large, steady-growing, and resilient industry with recession-proof characteristics,” IGT CEO Vince Sandusky said during the Q4 call. “Growth accelerated during the pandemic, and our 2023 results confirm that we are successfully maintaining these higher play levels with significantly improved margins.”
Globally, same-store sales (SSS) for lottery were up 2.3% in 2023 with growth across draw games, instant win games, and jackpot games.
With robust jackpots occurring throughout the US and globally last year, IGT is anticipating a leveling off next year. It projects flat to slightly lower SSS in 2024.
iLottery business grew over 40% for IGT last year
Even if SSS has a slight decline in 2024, IGT has a promising outlook on its lottery business. That’s due in part to its rapid growth in iLottery over 2023.
Its online lottery business was up over 40% over the last year, with IGT crediting that to organic growth in existing markets.
For the year, IGT accounted for 22% of iLottery sales in the United States.
The success of IGT’s lottery in 2023 propelled it to records in key business demographics.
“Needless to say, we’re very excited about the opportunity for long-term value creation for the stand-alone lottery,” Sandusky said. “In fact, the growth across our global lottery, global gaming, and PlayDigital segments contributed to record-breaking achievements of $1 billion in operating income, $1.8 billion of EBITDA (earnings before interest, taxes, depreciation, and amortization), and a 41.3% EBITDA margin.”
On top of the growing online lottery business, IGT provides its technology to more than 50 lotteries across the world, including 25 retail lotteries in the United States.
Recently, the company has scored multiyear facilities management contract extensions with some of its biggest US jurisdictions. That includes California, Kentucky, South Dakota, and Virginia. On top of that, it went live with a new facilities management contract in Connecticut in the last year.
Further adding to the business, IGT also had 28 large Game Touch self-service terminals installed in Michigan and Ontario in 2023.
With all of these developments, lottery accounted for 59% of IGT’s revenue in FY 2023. The company projects it could see an additional $75 million coming from lottery in 2024. That would push it over $750 million in revenue for the year.
IGT one of the world’s top lottery operators
IGT was founded in 1990. While headquartered in London, it has offices around the country. That includes Providence and Las Vegas.
In 2014, the Gtech Corporation agreed to acquire IGT, combining together under a new holding company. That merger was completed in 2015.
As part of their operations, IGT boasts to be the world’s largest lottery operator based on total combined wagers.
IGT has developed footprints in the US for both retail and iLottery, including new contracts in the last year with multiple states.
With a growing US market, combined with a large international impact in countries like Italy, IGT certainly has established itself as one of the primary companies in the lottery industry.
Photo by PlayiLottery
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