IGT Stock Soars on Expanded Deal with FanDuel
Posted on: August 3, 2020, 09:32h.
Last updated on: August 3, 2020, 02:44h.
Shares of International Game Technology Plc (NYSE:IGT) are higher by more than eight percent, putting the stock on pace for its best intraday performance in over a month after the company announced an extensive deal with FanDuel.
Under the terms of the deal, IGT’s PlaySports platform will serve as the technology backbone for FanDuel’s established and new US sportsbooks through September 2024. FanDuel will also offer IGT’s PlayCasino games in states where internet casinos are permitted. Financial terms of the agreement weren’t disclosed.
“The multi-year agreement builds on IGT and FanDuel Group’s successful technology partnership that currently extends across nine US states and includes the FanDuel Sportsbook at Meadowlands Racing and Entertainment in East Rutherford, N.J. — the country’s highest-volume sportsbook,” according to the companies.
FanDuel is a unit of UK-based Paddy Power Betfair (OTC:PDYPY).
IGT and FanDuel have a long working relationship that dates back to 2018, which was established soon after the Supreme Court ruling on the Professional and Amateur Sports Protection Act (PAPSA).
Since then, IGT assisted FanDuel in debuting retail sportsbooks in New Jersey, New York, Pennsylvania, West Virginia, Iowa, Indiana, Michigan, and Mississippi. IGT is also the technology provider for FanDuel online and mobile sportsbooks in New Jersey, Pennsylvania, West Virginia, Indiana, and Colorado.
FanDuel also has more than 200 self-serve kiosks at its retail books across the country, and IGT is the technology provider for those machines as well.
Currently, 18 states and Washington, DC are “live and legal” sports betting areas and IGT has partnerships in at least a dozen of those areas.
IGT and FanDuel are extending their arrangement at a time of soaring growth expectations for both internet casinos and sports wagering in the US.
Data confirms that in the wake of the coronavirus pandemic, iGaming revenue surged in the marquee markets of New Jersey and Pennsylvania. Economists and industry observers believe that with states scrambling for revenue due to the COVID-19 crisis, more will examine legalizing iGaming and/or sports betting to replenish coffers.
That would be a potential boon for gaming companies such as FanDuel and infrastructure providers like IGT. Officials in some states, including somewhere IGT has lottery contracts, acknowledge COVID-19 is hampering retail sales, and that the future of lottery is online.
Some analysts estimate that internet casinos and sports betting could each be $20 billion industries in the US over the next several years.
That type of growth could renew investors’ interest in shares of IGT. Although the stock nearly tripled off its March lows, it’s struggled for some time, entering Monday lower by 34.13 percent year-to-date and 30.13 percent over the past 12 months. It would need to rally almost 53 percent to reclaim its 52-week high set last November.
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