Interview: GTECH’s plans for gaming industry giant

Interview: GTECH’s plans for gaming industry giant

Friday, December 12, 2014 Totally Gaming

GTECH is on the brink of sealing one of the biggest deals in the history of the regulated gaming industry through the $6.4bn (€5.17bn) acquisition of IGT. In the first part of an exclusive two-part interview, GTECH Americas president and chief executive officer Jaymin Patel told about the impending transaction, the wider implications for the company and industry, and its hopes in North America. How important is the IGT deal for GTECH's future?

Jaymin Patel: “This is an historic deal for GTECH, and we’re very excited about finalising the transaction. Because of IGT’s and GTECH’s respective positions in our existing markets, whether it’s in the lottery solutions sector, in the interactive gaming sector, in the supply of video lottery systems and VLTs, or in content or commercial gaming, the kind of scale that we have can make a real difference in delivering innovative gaming products that will help drive revenue for all of our customers.

“Once this transaction is concluded in the first or second quarter of 2015, we’ll have created the world’s leading end-to-end gaming company, with the most diversified product portfolio and an unmatched global footprint. Whether our customers are in the government-sponsored sector or in a commercial operations or gaming sector, and no matter where they are in the world, it means we will be able to provide best-in-class products and services for any channel or any market.” Tell us about GTECH’s current position in the North American market.

JP: “GTECH is privileged to serve a large number of US customers through our leading market position. In the US lottery segment, GTECH has a leading presence in lottery transactions, and same store growth rates continued to be tracked at three to four per cent per year. Most recently, we were awarded new lottery contracts in Colorado, Tennessee, and Missouri.

“In the interactive and mobile space, we are a leading iLottery provider in the US, having introduced draw-based games, iKeno, electronic instants, and mobile apps in the US. In addition, we’re the preferred iGaming provider for Canadian lottery clients, having launched North America’s first-ever Bingo and Poker networks in Canada.

“We are also a leader in North American VLT distributed markets (including the Canadian provinces, Oregon and others), and achieved a 100 per cent success rate in the Canadian VLT and Systems replacement cycle, winning in every province where we bid.

“In addition, we are growing our presence in North American casinos through our innovative content and technology. Our SPHINX 3D game has won three casino industry awards since its launch, and is performing three to four times the house average in many properties where it’s installed.” You have a massive presence in North America, but recently recorded reduced revenues there. What are the current challenges for you in this market?

JP: “Our business can be affected by year-over-year changes in procurements. For example, in 2013, we recorded substantial VLT sales to customers in Canada and Oregon, as compared to 2014. However, if you look at the business over time, we have demonstrated consistent growth rates. 

“The challenges are all about growth. We must consistently and accurately identify opportunities for the company to invest its capital and its people. For instance, we have to help our existing lottery customers grow same-store sales. This is very important to GTECH because our compensation structure is a percentage of ticket sales.

“As volumes grow in the market, we do better. We have a lot of people and expertise focused on helping our customers launch new games, making their existing operations more efficient.”

Check out on Monday for the second part of the exclusive interview with Jaymin Patel to find out more about the challenges and opportunities in North America for GTECH and the industry as a whole.

Jaymin Patel, GTECH Americas' president and CEO

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