Quebec could be next emerging slot market

LAS VEGAS, Nevada -- A single province in Canada may provide a more lucrative slot machine replacement market this year than any American jurisdiction.

Quebec will begin replacing its 12,000 video lottery terminals in an effort that could span two years.

Janney Montgomery Scott gaming analyst Brian McGill thought the market could be a windfall for International Game Technology, which has a flourishing video lottery business. IGT could secure 40 percent of Quebec's market, McGill estimated.

With 36,000 VLTs in provinces that replace games regularly, Canada could substitute for what has turned out to be a softer-than-expected slot machine replacement cycle in the United States.

"The Canadian VLT market offers the equipment manufacturers an opportunity to see additional sales," McGill said.

Wall Street has been revising earnings projections for the slot machine sector since analysts said the replacement market predicted last fall at the Global Gaming Expo has not materialized.

U.S. casino operators, said Roth Capital Partners gaming analyst Todd Eilers, are not willing to spend money on new games.

That leaves Canada as a new revenue source.

Video Lottery Terminals resemble and play like slot machines, but a central server determines payouts.