IGT deal may open Asian market to company slots

A deal between IGT - International Game Technology and a Macau-based game distributor could further open the Asian market to the company’s slot machines.

Financial terms were not disclosed for the three-year distribution agreement between IGT and LT Game Ltd., a subsidiary of Paradise Entertainment Ltd.

Under the arrangement, LT Game will distribute IGT slot machines and game content to casinos in Macau.

IGT will serve as a U.S. and Canadian distributor of LT Games live and electronic table game systems. IGT is also granted right of first refusal for distribution of LT Game to Europe, the Caribbean, Mexico, South America and Central America.

Deutsche Bank gaming analyst Carlo Santarelli said U.S.-based slot machine makers have made little inroads into the Macau market. They current share roughly 12,900 games, which equates to 55 percent of the installed base in Atlantic City.

Santarelli said Macau is expected to add roughly 9,000 new slot machines over the next three years.

“This partnership better positions IGT to capitalize on this opportunity,” Santarelli said. “We believe the complementary product offerings and the ability to garner incremental local expertise and rely on local relationships for distribution will be a distinct positive for both parties.”

He said neither LT Game nor IGT “have exhibited their full potential in the respective international markets to date.”

Between 2009 and 2012, IGT’s slot machine sales into Asia totaled just 3,900 games, many of which were replacements of older games.

IGT Executive Vice President of the Global Sales Eric Tom called the agreement “unique to the gaming industry.”

LT Game’s parent, Paradise Entertainment, is traded on the Hong Kong Stock Exchange and is considered one of the leading gaming equipment providers to casinos in Macau and the Asia Pacific Region.

“The agreement unlocks enormous potential for LT Game in the international market and marks a significant milestone in our history,” Paradise Entertainment Chairman Jay Chun said in a statement.

Santarelli said LT Game will benefit from IGT domestic scope in the U.S. and Canada, saying the deal creates more competition in the electronic table game market.

“We see a more significant opportunity for LT Game in this partnership,” he said.

IGT is in the process of being acquired by Italian lottery giant GTECH Holdings for $6.4 billion.